"Over the past five years, I've asked hundreds of marketing people why they don't track their leads. The most common answer is, 'Our salespeople throw them away.'

Allow me to introduce an expert who specializes in solving this very problem, Debbie Depp.

During the past several months, I've spent many hours brainstorming with Debbie, and I've developed a deep respect for her penetrating insights and practical advice.

I especially like her Business Development Center (BDC) approach, which is a systematic process for turning inquiries (cold leads) into hot leads that salespeople are eager to call."
-- Joe Roy

RM: Debbie, let's start with a brief definition. What is a Business Development Center?

DD: A Business Development Center is an automated process that enables you to "touch" your prospects and customers until they buy or die, so that you get consistent, predictable results that go straight to your bottom line.

RM: Years ago, when you began recommending Business Development Centers to sales forces, what was the basic problem that you were trying to solve for the sales forces?

DD: Low productivity. Sales productivity is a numbers game, and most sales forces need to improve their numbers.

RM: And how does a BDC help increase sales productivity?

DD: It gives you a way to systematically turn inquiries into hot leads. Years ago I learned that salespeople often do not persist long enough to close a sale. Research shows that 48 percent of salespeople give up after the first contact, and 90 percent give up after the fourth contact. But 80 percent of customers buy after the fourth contact.

RM: In other words, by initiating contact and then giving up, a salesperson can unintentionally warm up a prospect for someone else.

DD: Yes. My research also showed that prospects have to be "touched" an average of 6.7 times before they buy. The touch can be any type of contact -- a phone call, letter, fax, email, or face-to-face visit.

That takes time. It's challenging. But what's even more challenging is something we call "account penetration." Usually, you can't close a sale by touching one person -- it averages three to five people.

To make a sale to one company, you need to touch three to five individuals in that company. This is an average taken across all industries.

So, you might have to touch five people seven times each, for a total of 35 touches, to close a sale.

Suddenly I realized what the expression "numbers game" really means: We give up far too early in the sales process. It's not that we're lazy. It's not that we're not committed. It's not that we're not getting enough leads.

It's because we don't have an economical process for touching our prospects until they're ready to buy, so that salespeople can spend their time selling only to hot prospects.

You know that I've been a VP of sales and marketing. In that position, I became the referee in the constant fight between marketing and sales.

My marketing department was always saying, "Oh, we're giving your salespeople terrific leads," and my salespeople were always saying, "Deb, those leads are terrible."

RM: Sounds familiar.

DD:I'm sure many of your readers have lived with this battle for years. In my case, I knew with certainty that I had two groups of dedicated, competent people. They wouldn't lie. So it was a puzzle. How could I solve this puzzle?

The answer was that the marketing people were giving my salespeople good inquiries, not good leads.

In other words, they weren't leads yet.

To warm up the inquiries into hot leads, we needed to touch them. But how? We couldn't do 35 touches via face-to-face visits. First, it would have been too expensive, even then -- today a sales call costs $500 to $750. Second, it would have been inappropriate. Overkill. So I implemented a Business Development Center to do the touches.

A BDC is a way to do multiple, periodic touches in a systematic and cost-effective way. It's based on the idea, "high tech + high touch = higher sales." Technology plus methodology gives you an incredible synergy. And it's the best way to help your salespeople be more productive.

More to point, the BDC is also based on this concept: "You can't expect what you don't inspect." If you're spending tons of money on sales and marketing, you want to make sure that you optimize your return on those sales and marketing dollars.

And to do that, you need a process that can measure how well your sales and marketing activities help the salespeople generate dollars from closed sales.

RM: OK. Let's go back and revisit some of your key points. For example, do most inquirers eventually buy? If I visit a company's trade show booth and drop my business card into the fishbowl, and then they touch me four times and give up, will I typically buy the product or service from someone else?

DD: It happens all the time. Company A warms up a prospect, but doesn't stay top-of-mind. Later, the same prospect calls Company B and buys. Company B is rewarded for just answering the phone.

And I'm glad you brought up the example of trade shows, because so many of us invest time and money in trade shows without optimizing that investment. Research has shown that 37 percent, or more than one-third, of all people at a trade show who ask for your literature will buy within 90 days.

And most of the other two-thirds will buy within 12 months. That's why you need to keep touching these prospects -- because they will buy eventually. But what you don't know, and usually can't know, is when they will be ready to buy.

RM: This is what many salespeople call A-, B-, and C-prospects -- A being hot and C being cold?

DD: Correct.

RM: So, if I'm a sales rep and I'm on commission, then all I want is A-prospects, so I can close them this month and make commission?

DD: Absolutely.

RM: And the goal of your BDC is to start with C-prospects and gradually warm them up until they're A-prospects and then hand them to the sales force, right?

DD: Yes. And do it cost-effectively. And be ready for the window of opportunity when the prospect is ready to buy. But that's, in fact, what none of us in marketing or sales knows -- when. But when it comes, that's the exact point at which marketing should hand the lead to the salesperson. And I use "the lead" very specifically in this case, because now it's no longer an inquiry. Now the sale rep is delighted, and says, "My gosh, this is an A-prospect!"

You see, ideally, salespeople should just sell, and everybody else should do all the other stuff. When we hire our salespeople, we don't give them writing tests or typing tests. But then, after they're hired, we ask them to spend their valuable time writing letters.

RM: In a company that doesn't have a BDC, is it typical to hear of salespeople disparaging the quality of the inquiries, or even throwing them away?

DD: Sure.

RM: What typically happens?

DD: You see several things. You see, first of all, sales reps complaining that their pipeline isn't full. And that's scary, because in sales it's the here and now, and every year you start at zero. That's fear-inducing, and it's also de-motivational, and it leads to sales turnover, and there's a high cost to that.

RM: And what does marketing say?

DD: Marketing points the finger and says, "Oh, the salespeople aren't following up." And then sales turns around and says, "But, you know, I did, and he wasn't ready to buy."

RM: So, the leads are in limbo, and the BDC is a place to put these "limbo leads."

DD: That's a great way of saying it. And what it does is to ensure a closed-loop system. The system gives you confidence. You know that your investment in that list or that trade show or that campaign is working, because your closed-loop system will monitor and touch those prospects until they buy or die.

Now, of course, you have to measure your acquisition cost, and keep track of what the touching is costing, so that you'll know when the acquisition cost exceeds the value that you're going to get by closing them. But believe me, that happens later, not sooner. We just give up too soon.

RM: Debbie, you know I've emphasized this point in previous issues: If you don't know your numbers, then you're just guessing, and you don't know whether you're allocating your marketing budget profitably. For example, many years ago, a McGraw-Hill study indicated that the trade-show component of a company's advertising budget could be the most profitable or least profitable component. There's a lot of leverage in doing the right things before, during and after a trade show.

DD: Let me underscore that, Joe, because that's the best advice you can give your readers. What happens is, there's this feeding frenzy at a show and then everybody's sort of basking in the afterglow. And then a month later everybody's down, because they've taken the time and they feel their time was wasted, and marketing really doesn't know what happened.

Whenever I work with a company, I ask, "How many trade shows do you do? What does each trade show cost you? What is your cost per lead?" In most cases, they're with me so far. I get answers.

And then I say, "OK, so your cost per trade-show lead is $270, versus a direct-marketing campaign which might be $5 per lead. If you end your analysis right there, you might conclude that you ought to stop doing trade shows. But that may or may not be true, because we need another important number: your close ratio."

Your close ratio tells you a lot about the quality of your leads. In particular industries, some trade shows really do give you quality time. It's not the typical feeding frenzy. And you do your relationship-building there, there's an exchange of information, and it's probably the best part of the qualifying process.

So yes, a trade show may cost more but generate many more sales, and therefore may yield a higher return on investment -- ROI.

RM: As you've said, many companies know the cost of their leads, but how many know the value -- that is, the return on investment?

DD: I haven't seen one yet. I've been in business for more than 20 years, and I have yet to find one. Many companies don't even ask the question. It's not on their checklist.

RM: It's always amazed me when large companies launch marketing campaigns with price tags in the tens of millions of dollars and not even attempt to measure the ROI. The same companies wouldn't dream of building a factory without setting ROI goals and then measuring whether they were reached. This happens even when the factory costs less than the marketing.

DD: That's the same thing I see, everywhere I go. I continually hear things like: "Well, this is the way it's always been done." Or, "We always go to these three trade shows." Or, "We always buy these lists."

But it's really time for people to start measuring results. When I work with clients, I find that measurement helps them increase sales productivity and do more with less. And clearly, in this downsized climate of ours, that's the challenge for any good marketing department: Help sales do more with less. That's how marketing people can become heroes to their senior managers.

RM: True. The key is, they have to be willing to break with tradition. For example, years ago I was writing speeches for a large company. The company was going to more than 300 trade shows per year. It was unbelievably expensive, and the salespeople ignored most of the trade-show leads. So one year, the marketing chief said that the company was going to cut out two-thirds of the shows.

But two years later, the company was going to more trade shows. Unfortunately, tradition and sheer momentum prevailed.

DD: But I do empathize with the marketing people. I realize that we tend to get caught up in this question -- just as we do in our personal lives -- "what is everybody going to think?"

We worry, "If our company doesn't go to XYZ trade show, people will wonder if we're going out of business."

But you can't allow yourself to think that way. You have to get out of the box and ask, "What is the best way for me to acquire new customers and acquire more business from my current base?"

I noticed that you covered this point in your September issue, Joe, and I laughed out loud when I read it, having been in the same position myself.

People would be challenging me, saying, "Deb, we have to go -- we've always gone to this show."

And I would say, "Help me understand why. Forget the emotion -- just show me why. I'd be more than happy to devote my entire sales team and my marketing department to doing this -- if it's the best use of our time. But show me how, when I stand in front of my board of directors, I can tell them how this particular event is going to drive the top line and bottom line, and increase shareholder value."

And, of course, there's dead silence.

So, again, the biggest gap we have to bridge is between what we intellectually know and what we emotionally feel.

RM: Debbie, give us an example of the typical symptom that gets someone to call you and be willing to change the way they allocate marketing dollars and measure their results.

DD: It's typically numbers. We're all measured by numbers, by what we're putting on the top or bottom line. So, people call me when they see -- or even just sense -- a change in their actual or projected sales numbers. Because, where does sales immediately point the finger when things aren't working out?

RM: Marketing.

DD: You bet. Sales starts complaining: "My pipeline isn't full." Or, "When I go out to call, nobody knows who we are." Or, "There's no brand awareness." Or, "When I took this position, I never thought I was going to have to do so much missionary work." Or, more pointedly, "Marketing isn't giving us visibility. I don't see any articles about us. We're not positioning ourselves as the leader." So it's typically that visibility issue. Sales believes that the PR or ads or trade shows or direct-marketing campaigns aren't working. The salespeople feel that they're starting from scratch. And that's frustrating.

RM: Of course it is, and this is a story we've heard from many companies.

DD: And it elongates the sales cycle, by the way, which decreases motivation and increases turnover. It's an incredibly costly self-fulfilling prophecy. And it's frightening when you realize that many companies don't measure any of this.

RM: So a company gets to a point where, by a gut feel or by actual numbers, they sense that their sales prognosis is not good, and they believe that marketing is part of the problem.

DD: Or they're losing customers, or they're not getting enough business from their existing base.

RM: So they come to you. You're the doctor. How do you get them from that symptom to a prescription of a Business Development Center? Step us through a typical case.

DD: I'll describe a specific client company. This is a software company, called Tribute, and they're based near Cleveland, Ohio. Tribute is fresh in my mind right now because next Monday I'm flying out to visit them for a follow-up analysis.

By the way, SALES & MARKETING MANAGEMENT magazine recently interviewed me about alternatives to cold calling, and they also interviewed Tribute on the same subject.

Tribute is a relatively small company, under ten million dollars, and they really needed to maximize their resources. They had to make sure that they had high productivity. They had to figure out a way to do more with less. When I met them, they were looking for ways to improve their business development process.

They had heard one of my speeches about the BDC, and we wound up doing business together. And what happened was, after we put their BDC process in place, their marketing department was able to continue to use all of their different methods, and I was able to help them put some measurements in place. With measurement, they knew what to weight -- where to spend more dollars. For example, more trade shows versus direct marketing.

Measurement also forced them to totally rewrite their messages. They weren't clearly articulating their unique selling proposition. And so I worked with them to do that, too.

Tribute couldn't afford much advertising space. They mostly used trade shows, PR and direct mail. Using the BDC, they really leveraged those three modes of marketing communication.

When people responded -- by returning a business reply card or by phoning in -- that became the great first step in Tribute's closed-loop marketing system.

The card or phone call was the means by which the marketplace started to self-select. These responders were showing us some level of interest.

And we also made sure that the cards included qualification criteria: What is your company's need? Are you the decision-maker? When do you plan to buy?

So they self-selected immediately, and we put them in the Business Development Center. For example, when they first called in, we put them in a strategy we call "active," and to continue to help them know more about us, we sent a series of three letters. These letters enabled us to reinforce our message and continue to educate prospects and move them up the learning curve cost-effectively.

They were one-page letters that went out over the salesperson's name. As I said earlier, we don't want salespeople wasting their time writing letters. And, we want to make sure that the company message goes out the right way. So, Tribute's pre-written letters offload a lot of non-selling work from the salespeople, and they are written the way management wants. This is a good example of separating selling and non-selling activities.

Now, the unique essence of the company never changes. What does change is the buyer's mindset: Do I know enough about this product? Am I ready? Do I want to wait?

So, in Tribute's Business Development Center there are different strategies that reflect the buyer's mindset at any given time. In the "active" strategy, it's somebody that we want to warm up for our first telemarketing call, because this person expressed some initial interest.

These strategies are defined, flowcharted and documented. Not only are the letters already pre-written, but also they are sent out at a particular time. This is where sales automation software can really help.

The first letter goes out right away, and then five days later a flag pops up in Tribute's sales automation system as a reminder to send out the second letter, and then the second letter goes out. And later the third letter goes out. This is all before the first phone call. This is one way that Tribute avoids all cold calling.

By using letters instead of telemarketing right away, we're letting the prospect feel that he or she is in control of the selling process.

We think of it as a selling process. They think of it as a buying process. People like to buy -- they don't like to be sold to.

So, the letters help the prospects feel they have the control.

RM: Right. You're not bugging them.

DD: Exactly. So, instead of calling and being presumptuous, Tribute sends letters to create top-of-mind awareness before we call. The letters take the prospect's point of view. They answer the question, "What's in it for me?" They talk about benefits, not features and functions.

And in the last letter, Tribute says, "We'll call you to learn more about your situation." Their prospects tell them, "You're the only company that calls when you say you're going to call." So before the prospects have even entered into a relationship, they feel that Tribute is dependable.

RM: I like that.

DD: And then we start using another mode of communication: telemarketing. And we have scripts and guidelines. And so the BDC coordinator calls and reinforces what was in the letters.

During this call, the prospect makes one of four responses: yes, no, I want to wait, or no contact.

If the prospect says "Yes, send me more information," we put them in the "info pack" strategy. We send out an info pack based on the needs developed in the phone call, and we set a flag for a specific number of days later.

When the flag pops up, we follow up with a second telemarketing call.

RM: Let me repeat one point: You based the contents of the info pack on the call. That's important to emphasize, because many companies make the mistake of sending the same thing to everybody.

DD: You know, I'm glad you mentioned that, because I call that the "spray-and-pray" method. It's very costly. And it also shows that you don't care.

RM: Right.

DD: So, because we had sent the three letters, educating the prospect, then, by the time we call them, we can really cut to the chase. It has dramatically shortened Tribute's sales cycle.

And there's a second kind of "yes," where the prospect says, "Yes, let's set up an appointment." The appointment can be a face-to-face meeting or it can be a conference call with the sales rep.

So, either kind of "yes" is one of the four kinds of responses.

The second kind of response is "no." Now, it might be a real "no," such as, "No, I'm running a hair salon and I don't use drilling equipment."

So you say, "Gee, that company shouldn't have gotten on our list! Let me take it off."

Or it could be, "No, I'm not the right person for this." For some reason, we got the wrong name. So it means further account penetration. Remember, three to five people per account.

The third kind of response is "wait." For example, the prospect may say, "Yes, we got the letters, and we're really interested, but we're going through our budgeting cycle right now." Or, "We're going through a reorganization, and I just can't give you my undivided attention. Could you call me back in 45 days?" And, Joe, how many of us would remember to call them on time?

RM: Not many.

DD: And yet they haven't said to Tribute, "We're not interested." They're just saying that they're not ready to buy.

The window of opportunity isn't open yet, so we don't waste $500 to $750 on a face-to-face visit.

The BDC coordinator is still making these telemarketing calls. Remember, the letters went out over the salesperson's name. So, without wasting any time writing letters, each salesperson is already building relationships with several prospects in the BDC.

Meanwhile, all the salespeople are doing what they do best. They're working with other prospects -- hot prospects -- in their windows of opportunity. They're closing sales, while all this prospect-warm-up activity is going on in the BDC for the salespeople's future benefit.

Now for the fourth and last kind of response -- "no contact." And this happens to all of us. No response to a series of phone calls and voice mails. After a certain number of attempts by telephone, Tribute sends a fax. Just like the letters that went before the telemarketing call, the fax is one page, pre-written.

It summarizes what we said in the previous three letters, but it gets to the point -- it asks two simple prospect-qualifying questions.

And it works.I use this fax technique myself, and I've had CEOs call me back, after several voice mails and then a fax, and say, "I'm sorry, I've just been so busy." I mean, can you imagine that?

RM: That's remarkable.

DD: But it was the fax that did it, not my multiple voice mails.

RM: You've also built a relationship to the point where, even though you haven't met the prospect, he feels he owes you something.

DD: Exactly. Another thing: After you close a sale, you continue touching that new customer. These post-sale touches are opportunities to ask for referrals, to cross-sell, to add other services, and to do surveys.

Twice a year, do a customer-satisfaction survey. Or get their opinion on new products that you're thinking of developing.

RM: Debbie, let me insert a related point, which is that a survey can also be a selling tool, because most people actually like to be surveyed by organizations that they know and respect.

DD: Exactly.

RM: Not by cold calls -- but if a customer respects a certain company, he's flattered by a survey.

DD: That's true. What the survey says is, "We value your opinion."

RM: Now, some companies have overdone it, like those survey cards in hotel rooms. That's a form of your "spray-and-pray" method.

DD: Exactly.

RM: Wouldn't it be so much stronger if someone called me personally and said, "Mr. Marriott asked me to call you, Mr. Roy. We noticed that you've stayed at Marriott hotels more than 100 times, and Mr. Marriott wanted to ask how well we are doing, in your opinion." Or, "We noticed you stayed with us many times, but stopped in 1996. Did we fail you in some way?"

DD: That's a perfect example.

To summarize the responses: When you call someone, there are four possible responses. They can say "yes." They can say "no." They can tell you, "I want to wait." Or, there's no contact. Any company can flowchart a prospect-development process based on those responses.

I strongly recommend having a defined, documented process in place to ensure a closed-loop system. That lets you track and measure. You can start measuring what's working. And when you do next year's budget, you will no longer be using spray-and-pray. You'll be using a very analytical approach.

Once again, this is what can make marketing people into heroes.

Another great benefit of measurement is pipeline management. When you know your conversion ratios, then you can determine what size pipeline will be required to meet your sales goals.

This helps you manage both marketing and sales. It helps you determine how much to spend on each mode of marketing communication. It helps you add salespeople knowing of how much revenue they will be likely to produce. It helps you correlate current activity to future revenue and profit. It improves your forecasting. Your revenue stream becomes consistent and predictable.

This is what I call the "art, science and discipline" of sales and marketing. The art is providing information in the right form. The science is being there at the right time to provide it. And the discipline is doing it persistently and consistently.

RM: And, in the case of Tribute, you mentioned that they can measure how well it's all working. Are most of the leads highly qualified and is the close ratio better?

DD: Yes. And motivation is tremendous, for two reasons: The first is that this process ensures that no one ever cold-calls -- not even the BDC coordinator who's doing the telemarketing.

The second reason for high motivation is reduced frustration. Now, when they do go out face-to-face, it's qualified. They're selling more profitably. So they can make fewer visits. Their productivity ratio has soared.

RM: One last point. Without breaching any confidences, can you give us an idea of the numbers?

DD: Yes. I can say that revenue per salesperson doubled -- now they spend most of their time calling on highly qualified prospects, instead of making cold calls or writing letters.

RM: Over how many years did the productivity double?

DD: In one year.

RM: Because of the BDC process?

DD: Yes.

RM: Outstanding. And we're talking millions of dollars of revenue.

DD: It doesn't matter what industry you are in, or how large or small your company is. If you have a marketing program and a sales force, this process works.

RM: Thanks, Debbie.