The Sales Quarterback

Aberdeen’s most recent B2B teleservices benchmark states that 33% of all lead generation dollars in corporate budgets go to outsourced telemarketing services. The Best-in-Class spend, on average, 44% of their lead generation budgets on outsourced telemarketing. While this demonstrates a trend that heaps value on greater use of outsourced telemarketing, that by itself is, unfortunately, a lemming’s argument. So how can Marketing get the big bucks into teleservices without just pointing at this handy trend?

In the end, it all comes back to money. The magic word seems to be showing that x amount of dollars equals y amount of leads, sales, or actual income. And yet, ROI is, and will be, a difficult thing to calculate for any large company, or any company with a long sales cycle. Unfortunately, this defines a huge number of organizations. This has led to a strange struggle between marketing bloggers who either attempt to provide valuable and unique insights into successfully calculating ROI, and bloggers who feel that the emphasis on ROI is unjust and that the calculations are implausible. I tend to take the middle ground on the argument.

Firstly, I doubt that anyone in the world would leap readily from a stable position into one where the outcome was unsound, and on such a ground I agree with those who rely fully with the requirements of a calculable ROI. On the other hand, taking chances and leaps of faith allows growth and is often the only way to achieve. Business women and men are gamblers, but we have a keen eye for the odds—ROI is simply an odds-calculator for business strategies.

What I find to be the only ambiguous aspect of ROI is that a “Return” can hold many definitions. For instance, what the check-writer wants to see is how much money will come back, and when. Going on our gambling metaphor, the odds have to play a part in this as well. If I put up this banner, or sponsor this event, what percentage of people will see the banner or be aware of the sponsorship? What are the odds that it will affect their decisions in the future? How long will it take for those decisions to grow and flourish into a lead? What other types of investment will speed this process up, or increase the odds of it flourishing? These are all the questions that help delimit the odds. I discussed these issues as they apply to teleservices in Why, When, and How to Outsource Teleservices, but how do they apply to ROI?

In the business world, imaginary numbers don’t fly, but imagine this for a second. If I spend $20,000 on a lead generation campaign, that guarantees 20 well-qualified leads for my expenditure, and each lead can potentially create $10,000 each in revenue, then the potential return, after subtracting the original expenditure, is $180,000. This is an imaginary number (figuratively speaking), and is a best-case scenario, but a instead of wondering how well your lead generation campaign is going to go, you ask yourself how well your sales team can do with the outcome.

In Aberdeen’s B2B Teleservices Compensation: Defining a Path to Success, Peter Ostrow notes that the Best-in-Class tend to use retainer-compensation for their outsourced telemarketing providers–an often variable-enhanced monthly or quarterly fixed-dollar payment. In the 2008 B2B teleservices benchmark, Aberdeen collected various information which Ostrow analyzes in this graph:

(Click to enlarge)

“Of interest in Figure 3 is the relatively low-maintenance ranking of retainer-compensation teleservices customers. These strong-performing organizations focus on a collaborative, quality-centric relationship with their teleservices provider and are less reliant on their external partner, in comparison to companies in slow-growth mode that may consider the cost-per-lead and lead-quantity approaches in an unrealistic, panacea mind set” (Aberdeen Group, 4).

What Ostrow is pointing out is that the odds-bypassing formula of outsourced teleservices ends at the hand-off of a well-defined lead; something that the Best-in-Class realize before the Laggards. Keeping in mind the quality of the lead, what becomes of the imaginary 180,000$ is up to me and my sales team, but the value is certainly there for the picking and the variables are much reduced.

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