Mr. McAvoy

Sales & Marketing

Lead Generation: Turning a Cold Call into a Warm Call

By Jim McAvoy, Founder & President, JWMcAvoy & Company Ltd.

Question: What do “gargling bleach,” “crawling over broken glass,” and “having a root canal done without Novocain” all have in common? Answer: These are all activities that high-performing sales professionals have claimed they would do rather than spend time “cold calling” and focusing on lead generation–related activities.

While lead generation has always been an important topic, it is an issue that has really jumped onto center stage over the last couple of years. Although the growth of technology has helped in the gathering of leads, the conversion factor has not increased. So the critical question we need to explore is: how do sales professionals reliably increase their reservoir of qualified leads, and ultimately convert them to revenue?

Sales professionals consistently acknowledge that the initial step in most sales processes is prospecting—an activity they typically don’t enjoy as they don’t have the time or the interest to efficiently and effectively execute the tasks associated with successful prospecting. It is no wonder that 60% of sales leaders say their sales departments are not qualifying leads as well as they should.

Recent research shows us just how important effective lead generation is to sales force effectiveness and productivity. In fact, the 2009 B2B Lead Generation Benchmark Study found the following:

• The overwhelming majority (94%) of survey participants use more than four different lead generation tactics to get the job done, which is a major drain on time and staff resources.
• Companies that invest a larger percentage of their marketing budget in lead generation generally have better sales results than those who invest a smaller percentage.
• A majority (60%) of the companies reported that their outside sales teams find less than half of their opportunities in the sales pipeline on their own, and 40% reported that their outside sales teams find less than 30% of the pipeline opportunities needed.

A proven approach is the five-stage process known as L.E.A.D.S.TM that aims at improving the efficiency and effectiveness of the front-end portion of the sales function within an organization. Said another way, no matter what industry you are in, L.E.A.D.S. will provide you with strategies to convert a “cold call” into a “warm call” and in turn drive organic revenue.

The five components of L.E.A.D.S. are:

• Lay Out the Plan
• Evaluate and Research
• Approach the Prospects
• Dialogue with the Prospect
• Seamlessly Hand Off

Each step of the system is outlined below, pointing out the major and minor steps involved in maximizing lead generation. Consequently, the “funnel” metaphor will be better understood.

L - Lay Out the Plan

The contracting phase introduces tools that help provide clarity and focus to your universe of available prospects. Laying out the plan helps you advance your strategy and understand the associated tradeoffs involved when selecting specific prospects you choose to pursue. A critical component of this step is the “funnel of probability” that shapes the volume of prospects needed to arrive at desired revenue targets. The main components of this phase follow:

• Identify 400 qualified names—contacts that are potential buyers.
  
• Each prospect on this list has one potential need for your service per year, and you are on the short list for 10% of them.
  
• This yields 40 qualified opportunities and you can assume the probability of closing on 10% of these.
  
• This equation results in 4 wins, roughly 1 contract per quarter.
  
• The average contract yields $50,000 incremental revenue per quarter.
  
• This income results in the potential of $200,000 of annualized organic revenue.

To best introduce the L.E.A.D.S. process and illustrate its effectiveness in turning a cold call into a warm call, here’s an example how it can be applied as you approach your sales initiatives.

Let’s assume your mission is to increase the number of Fortune 500 corporate meetings and conferences booked in your hotel properties over the next year to meet your revenue goal.

The first step is to establish milestones both in terms of activity and productivity to not only streamline the work but also ensure that you are progressing in the right direction and with enough velocity. One effective tool is the creation of a “pipeline” report that tracks the number of attributed situations and associated revenue forecasts

To fully comprehend the effectiveness of this strategy and to maximize results, keep track of a number of key statistics such as the percentage of firms that agree to establish a dialogue who redirected you to other decision-makers within their firms, along with those that decline or did not reply.

E - Evaluate and Research

Incorporating both decision-making criteria and pinpointing the location of relevant data, this step shares two levels of preliminary evaluation and research that form the fundamental basis of knowledge of the prospect. Level 1 includes baseline data that includes the company’s contact information and website links; Level 2 includes specific contact data of individual prospects, relevant business executives and their titles, as well as information necessary for understanding the prospect’s leading business issues.

Now it is important to conduct a careful analysis of prospective corporate meeting/conference clients and identify a targeted list of approximately fifty candidates that meet your chosen criteria. Some examples include annual revenue levels, number of employees, geographic location, and any existing connections to your targets. This information is captured in the “Tiered Account Listing Tool” that helps focus on batches of ten firms at a time.

From here, the Master Database is created and you can begin populating the data fields with fundamental information including key decision-makers’ names, titles, addresses and contact information.*

A - Approach the Prospect

This is the moment of truth. Here is where you lay out a strategy that includes multiple types of deliberate and intentional approaches in various combinations. The importance of documentation continues as the Master Database is used as a central depository to keep track of progress made with scores of prospects.

With the preliminary research completed and a succinct script in hand, you are now prepared to make a “warm call” versus a “cold call” and begin building your hospitality-related sales pipeline.

D - Dialogue with the Prospect

This step emphasizes counter-intuitive concepts, necessitates asking a few high-impact questions, and utilizes a 4-step model focusing on professional courtesy and connecting with the prospect in a value-added and respectful manner:

Contact is recommended to be made between 7:30 and 8:00 a.m.—one of the best times to contact a prospect (along with the period between 5:00 and 5:30 p.m.) since the executive assistant typically is not in the office then.

In the beginning of the conversation, you should ask if the executive is in the midst of an early morning deadline, which is a counter-intuitive approach that is used to give them the opportunity to get off the phone. This gives the prospect respect and ensures that they are “present” if they choose to engage with you.

Next, lead your contact through a dialogue and attempt to explore a number of issues such as their specific priorities, concerns, and expectations for their corporate meeting or conference. Before concluding the call, ask what prompted them to continue sharing information so that you can determine the crux of their needs.

After your conversation, send a concise e-mail reaffirming your capabilities and how your expertise could greatly help achieve their goals.

S - Seamlessly Hand Off

Like a successful baton handoff in a relay race, this phase focuses on how best to efficiently and effectively hand off a qualified lead to the assigned sales professional.

At this point, you need to prepare for the call and it is recommended to involve a colleague to join in your initial conference call or meeting. The probability of a creating a qualified lead is well correlated with the level of in-depth preparatory research. With a sufficient level of qualified leads in the funnel, you will dramatically increase the likelihood of booking enough corporate meetings and conferences to meet or exceed your revenue goal.

With a well-executed lead-generation strategy in place, the painful days of cold calling can be greatly reduced, if not eliminated completely. The old approach is being superseded by a more productive, upfront plan of action—resulting in warmer calls that are reliably contributing incremental revenue to the top and bottom lines of countless industries.

Jim McAvoy (Founder and President of JWMcAvoy & Company Ltd., a lead generation firm based in Wyomissing, PA) has almost twenty-five years of experience maximizing sales results for clients in a wide range of industries, from boutique firms to Fortune 500 companies. Mr. McAvoy researches, creates, and delivers qualified leads as a consultant to his company clients, in addition to teaching his highly interactive five-stage learning process (L.E.A.D.S.) to sales teams, providing the necessary knowledge and skills that lead to top-level prospecting results. Mr. McAvoy can be contacted at 610-374-2443 or jim@mcavoyleads.com Extended Bio...

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