In 2013, Russ Hearl was trying to expand his company, San Francisco-based Double Dutch, and build a market for...
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
social networking software for events. With a bare-bones team of just three salespeople, cracking into the market required a grueling schedule of cold calls all day and every day without enough insight into who was being targeted.
"Our sales team was basically lone wolves taking down deals," Hearl, vice president of global sales development at Double Dutch, said. "There was no systematic engine of growth."
Because this kind of social conference software is still a young market without a lot of Web presence, building the business through strategies such as search engine optimization -- which researches the keywords people use to increase traffic to a company website -- was premature. So his wolves needed to build business the old-fashioned way: by getting on the phone and selling the business case for virtual conference software.
But outbound sales is a tough business. Making cold calls without knowing more about who is on the other end of the line is inefficient. Double Dutch needed better information to sift through the mountain of prospects, some of whom would never buy anything, and find the conference technology decision makers. A month or so after implementing Salesforce.com, Hearl brought in Inside Sales lead generation software, which allows his team to identify companies with true interest in his software as well as decision makers with the purse strings that are ready to buy.
Russ Hearlvice president of global sales, Double Dutch
"I want to minimize wasted effort [in] calling people who have nothing to do with the success of an event," Hearl said. Inside Sales allows Double Dutch to identify the number of event planners within those companies and zero in on those prospects. Year to date, Hearl said, with the same budget, marketing has generated 350 real opportunities compared with the 3,000, the sales team has generated.
There is clearly a need to hone the data companies have about customer prospects. According to a 2013 study by Decision Tree Labs, 59% of business-to-business marketers lack confidence in their lead scoring models because of incomplete information, and 44% said they didn't have enough insight into which attributes indicate buying behavior.
"The basic challenge is the curse of abundance," said Brian Kardon, chief marketing officer at Lattice Engines, another lead generation software company. "Sales can call any number of thousands of prospects. The question is, ''Who to call first and who is most likely to buy?'"
An emerging market
Inside Sales is one of several technologies in a new breed of software designed to aggregate company data -- internal and external -- and provide better insight into prospects and existing customers. Some call it marketing automation, others refer to it as multidimensional lead generation, and still, others call it sales acceleration software.
Whatever you call it, the technology uses data to help companies identify better sales prospects based on complex criteria, deepens relationships with existing customers, and identifies problems before they result in customer defections. These technologies combine data from external databases, such as Experian, Dun & Bradstreet, public records and so forth, with a company's internal CRM, marketing and other customer data.
"When Marketo and Eloqua [marketing software services] came on the scene, you would only pass leads over to sales that demonstrated who they were and what they were doing on a company website," said Todd Berkowitz, research director at Gartner Inc. "That worked for a while. Then we saw a shift in the buying cycle, where the vendor had less power and buyers had more. And the traditional lead scoring model was called into question."
A handful of startup companies now lay claim to this burgeoning market, including Inside Sales, Lattice Engines and Salesfusion. These vendors say they can help companies qualify real leads based on predictive criteria that identify which customers are ready to buy or to target existing customers that can be sold additional products and services. Juniper Networks, a customer of Lattice Engines, found that new customers ready to buy switches and routers had recently purchased new office space, for example. Other predictors might be filing new patents or receiving government grants. "You're looking for an uptick in activity that indicates a buying cycle," said Lattice Engines' Kardon.
Building better customer relationships
SunTrust Bank in Atlanta is a regional bank that relies on deepening customer relationships to generate business. Andrew Yearwood, vice president and business consultant at the bank, said that until the bank started using Lattice Engines it was relying on various internal systems to aggregate customer information to prepare for a sales call. The process was time-consuming, inefficient and could evoke enough frustration to stand in the way of getting the right customer information in time.
"You've got multiple systems that you had to log into, all with separate logins," Yearwood described. "Some were mainframe and some were Web-based and [had] lots of folder hierarchies -- not intuitive to click into the report you wanted." As a result, "most sales people would admit they weren't doing a great job at it, but the "mind-set was, 'The company owes me something to do a better job.'"
Brian KardonCMO, Lattice Engines
Enter Lattice Engines.
Yearwood said with Lattice Engines, salespeople can now use just one system to access information about existing customers and identify which additional products and services they might need.
"If you're a business and you have a checking account, we have a lot of other products that manage your cash flow," he said. "We have reporting to help you run your business, security controls for payments and disbursements, and other services. We can use the data to understand how clients use those tools to run their business or that there is a solution they haven't purchased yet."
"Customer lifecycle management presents a big opportunity for cross-selling and upselling," Gartner's Berkowitz said. "Not only do you have external data, but richer data within your own database. That can be a powerful predictor."
Yearwood said that over the course of the next year, the company plans to use the software for additional uses, such as lead generation, but that is still a work in progress.
Weigh the pros, beware the cons
Even though these tools have plenty of pluses for those trying to get better productivity and results out of sales teams, the software is still emerging, and it has limitations. At Sun Trust, for example, Yearwood said he wants more flexible data views.
While Lattice Engines does "a really good job of showing snapshots," he said, "we'd like to be able to show trends and time-series data. That's not quite there." The ability to see data over time and compare data year over year could lead to a "really rich conversation between a banker and a client when talking about trends in their cash flow or trends in their credit utilization. When you get into those conversations, you get into that adviser, that strategic-type role. "
Gartner's Berkowitz also cautioned companies to consider the inherent assumptions that these technology models take in determining criteria.
"The biggest issue is that the software is a black box," he said. "Some companies are hesitant to trust someone else's black box model, because these algorithms are the secret sauce." Berkowitz said he's also trying to parse the differences between the vendors in the space.
"At this point, they all sound the same," Berkowitz said. "But some vendor may come along and say, 'We'll make the algorithms open source and build consulting around it.' That will be a differentiator."
For more on the use of gamification and data in these new lead generation tools, see part two.