Which to consider: lead generation or appointment setting?
Answer: both.
Both approaches are highly effective for building sales pipelines.
Appointment Setting gets you in the door, while Lead Generation not only gets you in the door but gives you the right hot buttons to press with prospects that are actively evaluating solutions.
In other words, with Lead Generation you only get appointments with accounts that are pre-qualified when the appointment is being set according to a robust list of qualification questions.
There are eight criteria that you can use to determine which teleprospecting method will be most appropriate but let’s start by contrasting the two methods.
Appointment Setting is best deployed against Named Accounts or accounts that you are very sure are a good fit to your value proposition. Appointment Setting is also great for early stage solutions where active projects cannot be found because the early adopters are not aware of a solution in the marketplace. Another scenario is where sales reps need all the appointments they can get to fill their pipeline.
Lead Generation is best used when highly paid sales reps are selective on the opportunities they pursue and do not wish to waste time on unqualified accounts. For these reasons, most B2B organizations are focused on generating more quality leads and less quantity.
Further, when the sales reps do engage a lead, they want to be able sell a solution based on pain points and decision criteria identified during the lead generation process. Solution selling on complex solutions requires this type of insight on the prospect.
When a face-to-face sales meeting is required as part of the buying cycle, field sales reps will prefer leads to be fully qualified to ensure that the travel expense is warranted.
Should a B2B organization target a market segment where the solution may beyond the reach of many prospects, it becomes crucial to confirm that a budget is committed or obtainable. Lead Generation would be favored in this case. However, with the popularity of affordable, SaaS applications, this may become less of an issue for software vendors.
Finally, the marketing team may value market intelligence that is gathered during the course of Lead Generation for market assessment and segementation: competitive landscape, use of custom solutions, engagement of third parties such as consultants, systems integrators or service bureaus etc.
Eight Criteria
To recap: the below seven factors can be used as criteria to select the best method for your team. (Lead Generation = L.G., Appointment Setting = A.S.).
For example, should you wish to pursue SMB accounts with a mainstream, complex solution, Lead Generation (L.G.) would be your best choice.
Type of Accounts – Named Accounts (A.S) vs. General Business (L.G.)
Size of Accounts – Enterprise (A.S.) vs. SMB (L.G.)
Stage of Solution Adoption – Early Stage (A.S.) vs. Mainstream (L.G.)
Size of your Sales Pipeline – Small Pipeline (A.S.) vs. Large Pipeline (L.G.)
Type of Solution – Volume Sale (A.S.) vs. Complex Sale (L.G.)
Distance from Prospect – Easy Commute (A.S.) vs. Long Commute (L.G.)
Solution Affordability – Within reach of most prospects (A.S.) vs. out-of-reach of many prospects (L.G.)
Market Insight – No need (A.S.) vs. High Need (L.G.)
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10 Comments
Although your definitions are "tidy" and would make for easy decision making as to how to most effectively use a leadgen team, I think they over simplify the decision making process. What if I am selling to an early adopter in a named account but it is a complex sales four states away?
Each company has to decide what they are trying to accomplish – and sometimes they are trying to accomplish different objectives at different times – and then figure out what is the methodology that will help them achieve those goals. The first step in this process is to make sure you understand the difference between activity A.S. and opportunity L.G.
Interesting post that I will share so thank you!
Hi Trish,
The example is a simplification to illustrate the use of the criteria.
I agree the decision to use either method will not be 'cut & dry' but the criteria listed are presented to help frame a decision.
A more scientific approach would be to create a scoring model for your company that would weight and score according to the criteria.
Absolutely, each company needs to create, and fine-tune, its own criteria.
Many "lead generation" programs simply produce a list of names of people who may, possibly, have some interest in a product by virtue of having downloaded a white, sat in on a webinar or some such thing.
Every name should be contacted promptly by whoever is in charge of lead qualification, but marketing should continue to own all but the hottest prospects who get passed immediately to sales.
Robert,
It's a very good post and I don't think you have over-simplified the subject at all. I think there is a huge danger that in fact we can over-complicate the art/science of winning new business.
My chum Linda Richardson likes to use the word "blended" often – usually to describe a range of learning facilities. In this case, we can identify that you are proposing a "blended" approach to secure incremental opportunities.
Of course, we can go further and explore when is the right time to cold call, or use warm calls, or use social media – but that is another related topic for another day, and the space available here might only lead me to over-simplify.
Keep up the good work
Jonathan
Very good post Robert – and good comments from Trish and others. It's an interesting question that I have wrestled with at different points.
The one thing that hasn't been touched on is the issue of immediacy. I have found that the issue that sometimes trumps all other considerations is that A.S. produces immediate results (gratification?) while L.G. is a longer term game. Senior management will often default to A.S. even when there is a strong argument for L.G. simply because the lure of short-term sales appointments is irresistable.
Six months later the expected pipeline/sales results may not actually be there, but the A.S. firm takes the blame and everyone moves on, with the marketing budget tens (or hundreds) of thousands of dollars lighter.
Robert, you've raised some interesting questions here that I think all companies need to ask themselves before going down this path. As well stated throughout the comments, there is no cookie cutter approach but unfortunately most organizations do not really attempt to define what they are after and how to get there. This is a great start!
Robert, You got me thinking with your post. I have sent the link to your site to several salesmakers and sales leaders that I respect for their thoughts and reaction.
Plenty of good commentary already provided here but here is my 2 cents worth…
I believe you need both all the time, and some time they are all in the same action. The practice of focusing on one goal at the exclusion of the other has proven to be a sure-fire way to slow down the overall sales momentum. It is similar to the practice in the high-tech sales world when sales comp plans are focused on Revenue one year and then on Margin the next. The pendulum swings are not helpful, at least for the first few months of the when the energy is to re-focus on the "new" priority for the year.
Keep the blinders off, train your team to seek either Sales Lead or Appointment based on the client,opportunity, timing and competitive scenario.
Keep up the great work here.
Robert, Your 8 points are a great guideline to begin with, and although there are cases where they won't match each client's needs exactly, they are a good starting point for someone being introduced to outsourced demand gen vendors.
That said, the dialog in the middle raises some questions.
For example, we have several appointment setting clients with higher qualification criteria than others. They get less appointments, but they get what they ask for, and in a pay-for-performance model they are happy to pay more for the service.
There is a much wider spectrum of vendors and programs out there than just Appointment Setting firms and Lead Gen firms. There are higher quality versions of each and very different levels of service for each.
- It comes down to what goals and what ROI is desired for the program.
- It comes down to a quality vs. quantity discussion.
It comes down to your 8 points.
- It comes down do vendor capability and selection criteria.
- It comes down to level of service and pricing.
- It comes down to client commitment, timing and urgency.
- It comes down to various other issues.
ps: You've stirred up an idea for a new Smashmouth Marketing blog article. Stay tuned, and keep writing…love your stuff.
I like the 8 questions to ask oneself or one's clients. Thanks for that.
I have never heard of someone contrasting "lead generation" with "appointment setting," but rather, most people I know use L.G. as a broad term that may encompass appointment setting as one strategy. Interesting food for thought. thanks
Great lay outing of importance and comparison but it also boils down to a company's needs and preferences.