November 1

B2B Telemarketing – Dialing for Tech Dollars & complex sales

Inside Sales

9  comments

Today’s Forbes article, “Dialing for Tech Dollars,” caught my attention. The article reports that B2B brands like Microsoft, BEA and PeopleSoft are outsourcing lead generation (via telemarketing) for $1million+ software solutions.

Can the “T-word” help sales people sell complex solutions?
B2B marketers voted B2B telemarketing as the #1 safest tactic they would be most likely to invest in if their CEO gave them an extra $50,000 for lead generation. (MarketingSherpa survey of 729 marketers)

Hunting down executive level decision makers is a time consuming task most sales people hate doing. One sales manager told me at a conference with a chuckle, “90% of sales people hate to cold call and the other 10% are lying.”

Bottom line: If you have a sales person selling $2million annually, their time is worth roughly $1,000 per hour in revenue to your company ($2,000,000 / 2000 working hours per year roughly = $1000 per hour)

Can outsiders generate ROI for the complex sale?
If you have a complex sale, you can’t risk hiring a B2B “telemarketing” firm that handles transactional sales or low-cost, in-demand widgets. You need to hire savvy professionals who understand the needs and issues of each company they contact. Unlike B2C telemarketers – where it’s a numbers game – B2B is about quality not quantity.

The Forbes article points out that telemarketing can be effective assuming you find the right partner. Outsourcing costs from $40 to $100 per hour depending on the company. From $7K to $16K per month per rep.

When it is done well, I’ve seen B2B telemarketing firms help sales people sell by almost doubling their selling time. At my company, InTouch, we’ve documented revenues from leads at 2000% to 6300% ROI using B2B Teleprospecting for clients in 9 to 18 months.

A 1998 report by Gartner entitled, “Inside Selling: Selling More at Lower Cost”, that showed that adding inside sales person (a.k.a. telemarketer) to support an direct/field sales rep can increase revenue per rep by 150%. Assuming all things remain equal, that means 10 field sales people would now perform like an equivalent team of 25.

The report estimates the fully loaded costs for 1 inside sales person is 35% of the cost for 1 field sales person.  Using my above example, the increased cost to get the performance 15 more field sales people would be adding 3.5 field sales people in additional budget i.e. you’re paying 13.5 field sales people (10 + 3.5 in additional budget) to get the productivity of 25 direct sales people.

I’ve searched but haven’t been able to locate anything to update my above example with more recent data.  Overall, every sales person I speak to says they are working harder today than they did 5 to 10 years ago and getting the same or less return.

If you decide to outsource, the key is to find a partner that aligns with your culture and understands your company, your value proposition, your target market and the key issues of people your trying to reach.

If you’re looking for more tips and ideas on cold calling or B2B telemarketing check out my categories on the left.

About the author 

Brian Carroll

Brian Carroll is the CEO and founder of markempa, helping companies to convert more customers with empathy-based marketing. He is the author of the bestseller, Lead Generation for the Complex Sale and founded B2B Lead Roundtable LinkedIn Group with 20,301+ members.

  1. I will have to be honest with you and tell you up front that telemarketers are hated pretty much on the same level as child molesters. I would buy nothing from anyone who called me, unsolicited. I don’t even buy anything from marketers who put those little postcards in my magazines. Sorry. Tell the business world that the vast majority of potential customers despise telemarketers. Even those who break down and buy. I am never rude to a telemarketer, but I have never bought and never will, from anyone who intrudes into my home uninvited. Sorry to burst your bubble of enthusiasm, but ask people, not stats, about telephone sales. We hate them.

  2. Mamacita,

    I appreciate your opinion but it seems you didn’t read beyond the first paragraph of my post.

    Your opinion seems to be based on Business-to-Consumer telemarketing (people who call you at home) and my focus was on Business-to-Business Telemarketing for million dollar solutions.

    The B2B telemarketers I wrote about are generating leads (not sales) for $1 Million+ business solutions and reaching top executives in large companies.

    I’m sure they don’t read scripts and they probably don’t refer to themselves as telemarketers. At my company our people are known as Lead Generation Specialists.

    They are savvy professionals who understand the needs and issues of each company they contact. Unlike B2C telemarketers – where it’s a numbers game – B2B is about quality not quantity. So I’m sure the people getting the calls don’t feel that “telemarketers” are calling them.

    What made this article interesting to me is that other well known B2B brands are employing these companies and it is helping their sales people sell complex solutions.

    Thanks,
    Brian

  3. Brian,

    I agree with the concept of telemarketing in the B2B world. Whatever the sale price range may be, I do believe that telemarketing is a numbers game. For every 20-30 people who find that call annoying, there is one that has an immediate need for your product. I’m a business coach, & one of the most effective lead gen methods has been telemarketing for initial consultations. People have been contemplating alternatives to improve their situations, know they need assistance, the phone call pushes them over the edge.

    Jeff

  4. In “B2B Telemarketing – Dialing for Tech Dollars & complex sales”, you mentioned a Gartner study. Could you give me the title or id # for that study?

    Thanks,

    Ken

  5. Cary,

    Thank you for your post. I’ve spent 11-years of experience in establishing and developing what is recognized as one of the country’s preeminent lead generation firms.

    Lead generation via phone (a.k.a cold calling) makes up a significant part of our revenue. We have 40 full-time lead generation specialists which provide outsourced cold calling expertise as a seamless extension of our clients. All of our clients have a complex sales and primarily focus on reaching senior level executives in midsize to Fortune 500 companies.

    You might find value in checking out my corporate website. https://www.markempa.com/

    I absolutely agree with you that cold calling is just a part of the overall direct marketing mix. There is any number of ways to generate leads. The catch, though, is some produce high-quality, high-value opportunities and others just dead-ends. The complex sale (which is all we do) requires a different and holistic and mult-modal approach to lead generation.

    When I say multi-modal I mean an approach that integrates various tactics and vehicles you mention and more.

    I’m planning to share more detail after my forthcoming book is published by McGraw-Hill, Fall 2005.

    Cheers,
    Brian

  6. Interesting comments regarding b2b telemarketing. What about the perception that you do not have enough time doing what it is you purport to be an expert in that you have time to cold call?

    Can cold calling be an important part of an overall direct marketing message combined with direct mail post cards, sales letters, email and fax campaigns?

    Thanks,

    BTW you are now blogrolled at my blog http://www.thecompexpert.blogspot.com. Please visit, and if appropriate, link back. Thanks

  7. I am a Lead Generation Specialist at Brian’s company Intouch. In regards to the previous comments regarding the few companies with immediate needs called, I thought I would share this example.

    For a client I am working on currently, there was a call placed a couple weeks ago to a senior person in marketing. That executive had no background knowledge regarding the solution I was calling about. More than that, he did not think he had a need for it.

    He agreed to an educational demo however in case future needs became apparent.

    The demo took place a couple days ago. It ended with a proposal request. The proposal was submitted, and a decision will be reached next week. This is potentially a very lucrative deal.

    My point is that calling is never “cold”. Even when someone has no background knowlege on what you are talking about, there is always an opportunity to turn the conversation into something that benefits both parties.

  8. I have been looking for this kind of article where I can get a lot of information about telemarketing. I want to thank you for sharing this post.

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