A case study of Validar eating its own dog food at Dreamforce 09.

Validar just returned from exhibiting at Dreamforce, Salesforce.com’s annual Users Conference in which we generated 148 leads in three days.  This event is the biggest gathering in the world of Salesforce.com users which is a target market for us.  Salesforce.com users can leverage Validar Lead Import with our Lead Capture product suite to get the complete marketing picture which includes the elusive ROI calculation.   Overall it was an absolutely great show with excellent content and smart people attending.  The downside for us, it was very expensive to be there!  We need to close some business to justify the expense which means we need to be smart with regards to how we manage our leads.

As expected, we qualified leads at capture, which was essentially asking some questions and associating the responses to those leads.    Depending on how the questions were answered, we associated respondents in to three simple categories:

1)      “Sales Ready” – I have a need and request sales follow-up post event.

2)      “Incubation” – Our Company can benefit but it’s not the right time to talk OR  I am not the right person.  Put me on your mailing list or send me an email and I will refer to the correct person.

3)      “Trinket Seeker” – We were giving away a Kindle.  These folks wanted to win the Kindle and desired no follow-up.  This is a great way for attendees to control how they will be treated post event.

1)       Here is a graphical view of our data:

Dreamforce chart

Validar has a direct sales model, made up of both inside and outside sales teams.   Inside sales is responsible for incubation and nurturing of existing leads that are not quite ready to purchase.   Outside sales is responsible for following up on “Sales Ready’ leads.  The day after Dreamforce all Sales Ready leads were in outside sales hands, the Incubation leads were handed over to Inside Sales and the Trinket seekers will be treated as requested, no follow up.

Validar’s focus will be on the 45 “Sales Ready” leads.  We need to convert 15% of these in order to meet our revenue goals.  All indicators are positive with the campaign already showing a pipeline that exceeds our revenue goal.

Now, compare this to the large percentage of exhibitors at Dreamforce who were simply scanning as many leads as they could.  An exhibitor we spoke to had a lead scan quota (roughly 24X larger than our actual scanned leads) that they were trying to meet.  In these cases, every lead they captured is uncategorized and will need to be treated as “Sales Ready”.  This creates a tremendous waste of valuable time and money chasing bad data.  Also, most of the folks that were scanned will unwillingly be receiving calls and emails inquiring about products and services that they are not interested in.  Sales typically will try 6 to 8 times to determine a leads validity. That is a lot of effort chasing bad data even if you use a valuable incubation engine.   I have been in this scenario and hate it!  Sales, Attendees, and Marketing all get frustrated.   One last thing–it will take conservatively a month for these companies to identify the true Sales Ready Leads even with an incubation engine, which by this time have already reduced in number by simple lead decay.  How many of your Sales Ready leads are still Sales Ready four weeks after the event?   With a conservative 10% lead decay rate  reduction I would find 40 opportunities versus the 45 we had immediately after the event.

Assuming Validar would have captured leads in this manner at Dreamforce, (Forcing Sales to treat all 148 leads as if they were Sales Ready) how much money would have we wasted chasing bad data and lost through standard lead decay?  Validar has built a model that identifies this figure.

This model takes into account the following metrics in its calculations:

  • Fully Burdened wages of our inside and direct sales reps.
  • Step by step process and time associated with manually processing and distributing all leads to sales versus Validar’s automation.
  • Step by step process of nurturing all 148 leads.
  • Average sales price.
  • Average close rates for “Sales Ready” and “Incubation” leads.

With these metrics in mind, Validar saved $4,710 by identifying “Sales Ready” at capture and automating the process of posting this activity to Sales and the associating Campaign within Salesforce.com.  We are also conservatively projecting an increase in expected units sold for this show from 6.5 to 8.17 based upon reduced lead decay in lead follow up.  This represents $67,000 in increased opportunity and sales provided we can close.  All indicators are in alignment already with regards to our ability to meet these projections.  Woo Hoo!

Dreamforce GAP

We’re a small company that exhibits at very few shows.  Imagine the impact qualifying leads at capture can have for a large program.  Call us if you want to model out one of your shows.  You’ll be amazed at the opportunity to reduce cost and increase revenue.

10 Comments

Vish Agashe
December 1, 2009

Excellent blog post. I agree with your commentary around

1. Time is of essence to avoid decay when collecting leads and managing those leads subsequently…..

2. Upfront qualification/categorization of leads will help you get Maximum Efficiency out of the time/$ invested in collecting leads.

Great Post.

Vish Agashe

Victor
December 1, 2009

Thanks for your comment Vish. I always find it amazing to see the value of qualifying at capture.

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December 1, 2009

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Ian Michiels
December 2, 2009

Great post. I also think there’s an opportunity to shorten the sales cycle and bring in revenue faster when leads are qualified on the spot. Early qualification helps marketers immediately deliver the most appropriate nurturing campaigns. Many organizations are forced to treat all tradeshow leads the same, which means mass-email follow-up. But if you can qualify the opportunity early, you can deliver targeted follow-up campaigns or promotional offers.

Even sales-ready opportunities will need some marketing love (collateral, educational material, etc.) There’s an opportunity cost for failing to deliver segmented marketing follow-up. Conversion is much higher when marketing material is relevant and timely. It makes sales more effective and efficient. It’s difficult to monetize this, but it’s another cost to consider.

    Victor
    December 2, 2009

    Completely agree. What I find interesting is most of the relevant incubation companies were exhibiting at Dreamforce and none of them qualified on the spot. I believe this is a missed opportunity on their behalf in that it may take another month to get their attention again and by that time the opportunity may have changed. Thanks for the comment Ian. Means a lot coming from you.

David Morgan
December 2, 2009

Completely agree with Ian’s post. Why waste money, time, and energy following up on 60% of unqualified leads? A targeted follow up campaign with focused resources allows for an opportunity to engage your prospect with promotional offers that are relevant to them and their needs. Why follow up by giving unqualified prospects something cheap when you can follow up to qualified leads with something valuable at the same net cost?

    Victor
    December 2, 2009

    Thanks for the comment David.

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December 9, 2009

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Becky
March 2, 2010

Explain to me the qualification of your Inside sales folks compared to telemarketers? What would be the differences between the two job descriptions?

    Victor
    March 2, 2010

    My inside sales team was solely responsible for turning over leads. They were required to fill our what we called a turnover form that my Sales Directors had to sign prior to handing over to their Direct sales reps. This turn over form was worth $200 to each inside sales rep. Telemarketers I believe can be deployed in a similar fashion depending upon your product. I was selling a large enterprise application that had a sales cycle of 8 to 12 months. If you have a product with a shorter sales cycle you can possibly train a telemarketing team to close.

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