Closing the Sales Loop at Nortel Networks

Headquartered in Brampton, Ontario, Nortel Networks is a provider of communications technology and infrastructure that enable IP data, voice and multimedia services spanning wireless, networks, wireline and optical networks.

In late 2001, Nortel Networks began to hear from its channel partners that they wanted to see more from the company in the way of lead generation. As a result, Nortel Networks took a hard look at its lead management processes within its North American Enterprise Division, which sells customer-premises equipment to end clients through channel partners. The company's conclusion: Changes were in order.

Disparate Processes, Open Loops

The issues were several, according to Mark Pierret, senior channel marketing manager with Nortel Networks. First, the company, its dealers and its value-added resellers (VARs) were using a variety of disparate processes to handle sales leads, and most of those processes involved an outdated mechanism with the staggered handoff of leads.

In addition, the company found that its "push" approach to handling leads was producing a fairly high rate of "secondary assignments." That is, Nortel Networks would assign a lead to a particular reseller but would later learn the reseller had not contacted the prospect. Nortel Networks then would pass the lead to another salesperson but, in the meantime, the prospect might have already gone with a competing product or had a change of heart.

Finally, Nortel Networks concluded that it simply was not getting the feedback from sales reps that the company needed to manage its leads effectively. Without a "closed-loop" process for providing timely feedback on leads, Nortel Networks found it difficult to ensure that its lead-generation programs produced optimal results, since by the time the feedback did roll back up the chain of command, it was quite possibly too late to effect any change of course.

From "Push" to "Pull"

To address these issues, Nortel Networks realized that it would need to create a uniform enterprise-wide process for managing its leads across its different product lines. The process had to be straightforward enough that the salespeople would adopt it quickly and actually use it to provide the feedback that the company needed. And the process had to be streamlined enough that it solved the problem of staggered handoffs.

For an underlying technology backbone for the lead management process, Nortel Networks looked at various partner relationship management (PRM) and sales force automation (SFA) solutions available on the market. The company's requirements for the technology conformed to its goals for its unified process: simplicity and accessibility. Nortel Networks' other requirements for the solution included support for the company's indirect sales model, a moderate initial investment with the ability to scale up over time, and a short implementation time.

Ultimately, Nortel Networks opted to go with BlueRoads, a provider specializing in solutions for indirect channel management. Implementation began immediately after Nortel Networks allocated the funding for the project and wound up taking just four weeks. Here's how the system works: Sales reps at the channel partners are able to log into the Web-based solution using their unique user ID and then pull leads out of the available lead pool within the system. The salesperson then becomes accountable for providing feedback on each lead he or she pulls; if the rep does not provide feedback on a lead within a certain amount of time, that lead "expires" and goes back into the available lead pool.

The system facilitates the feedback loop through such features as an "auto-introduction e-mail." When a rep picks a lead, the system generates three e-mails: one to the system noting who took which lead; another to the rep noting that he or she picked a certain lead and reminding the rep to provide feedback within, say, 30 days; and a third e-mail to the prospect letting them know that a Nortel Networks business partner will shortly be in contact with them.

The launch of the solution did not produce an immediate spike in wins for Nortel Networks, according to Pierret, but he says that the company's management was nevertheless impressed by the quantity and quality of new information that the system generated. With better information coming in on the quality of leads, the effectiveness of the lead generation campaigns, and the productivity of different sales reps, Nortel Networks' management felt it was better positioned to see what was working and what was not, and who was working effectively or not.

"After two months," Pierret continues, "we could tell management: Unless this vendor changes its behavior in the next month, it needs to be ‘canned.' Or, unless these users change their behavior, we should get rid of them and replace them with others."

The ROI on Better Data

At the end of the pilot, Nortel Networks elected to sign a longer-term, year-to-year contract with BlueRoads and expand the solution to cover all its product lines across its different geographies using a phased approach. By January 2003 the implementation covered all the United States, and by March, all of North America. South America came under the system by September. Currently the system encompasses a total of about 700 users, representing some 160 reseller organizations, and the uniform process covers all Nortel Networks products.

The new pull approach to lead dissemination did produce improved sales results, but not immediately. Nortel Networks tracked its close rates from leads from the beginning of the pilot in July 2002, and for the first few months the rate remained more or less unchanged from previous levels. However, as the new process took hold, Nortel Networks noted the lead closure rate began to swing upward to the point that currently it is on the order of five times what it was at the beginning of the pilot.

In addition, the company saw the secondary assignment rate for its leads drop rapidly, falling to as low as one-sixth its previous rate. And moreover, the reasons for secondary assignments were now more visible to the company's executives, making this issue more manageable. Beyond this, Nortel Networks saw revenues from leads double every quarter for six quarters in a row.

Life in the Spotlight

Not that the rollout has been without its challenges. Early in the deployment, Nortel Networks did get some pushback from its own salespeople and from its channel partners against moving to what Pierret calls "true accountability." With the system requiring feedback on pulled leads, reps have had to learn how to live under something of a microscope. "People weren't used to having that bright light on them," Pierret explains. "[Now] the spotlight is on. You let a lead expire, you don't provide feedback, or you close a lead and say the customer wasn't interested, and then that customer calls back and says he hasn't been called — that's not good. Those are the sales reps that we took out of the system.

"And it helped to resolve the age-old issue of the perception that marketing is throwing leads over the walls and that sales never provides feedback. Neither of those is entirely true, and if you have the data, it helps to clear up the finger-pointing that normally arises."

Pierret declined to reveal Nortel Networks' total investment in the BlueRoads project, but the provider prices its solution based on the platform and whatever additional modules that a client needs to install. Pierret does not hesitate to say, however, that he believes the system has allowed Nortel Networks to better manage its sales processes. He concludes: "The communications that are built into the system help close the loop. It helps to ensure that there is no change in direction based upon gray, anecdotal information. It's the facts. This is what has happened, this is the person who has either dropped the ball or made a slam dunk and closed the deal. And so we're going to give more leads to the guy who made the slam dunk, and the guy who dropped the ball, sorry, you may get a trickle, or maybe none."

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