Get a group of marketing people together with a team from sales to talk about lead management, and sooner or later someone's going to start pointing fingers. Marketing might talk about good leads squandered for lack of follow-up. Sales might retort that marketing is just throwing leads, any leads, over the wall, regardless of quality. Trouble is, unless someone can come to the table with hard numbers demonstrating that one or another party has been dropping the ball, this kind of meeting is not likely to be particularly productive. After all, as the old management saw goes, you can't improve what you can't measure. Fortunately, recent years have seen the appearance of a number of technology solutions that have put this kind of information in the hands of executives looking to improve their companies' lead management processes, as the case of Nortel Networks illustrates.
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. The company, incorporated under its original name of Northern Electric and Manufacturing in 1895, reported 2003 revenues of $9.81 billion.
Back 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 (such as voice-over-IP, PBXs, voicemail systems, call centers and routers) 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, Pierret and his colleagues found that 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(VARs) were using a variety of disparate processes to handle sales leads, and most of those processes involved an outdated mechanism with the staggered handoff of leads. "The vendor created the lead and gave it to the marketing manager at Nortel Networks, who gave it to the marketing person, who gave it to the sales manager, who gave it to the salesperson, and, two weeks down the line, the person who was supposed to call the prospect would finally get the information that he or she needed," says Pierret.
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, and then either the prospect would contact Nortel Networks or the company would follow up with the prospect a week or two after passing on the lead, and it would turn out that the reseller had not contacted the prospect. Nortel Networks then would pass the lead to another salesperson, and sometimes a third. In the meantime, the prospect might have already gone with a competing product or had a change of heart.
And finally, Nortel Networks concluded that it simply was not getting the feedback from sales reps that the company needed to manage its leads in a timely, effective manner. Partly this resulted from the disparate processes that the company employed to handle its leads. But Pierret also points to what he calls "the intrinsic difficulty of asking sales reps to stop what they're doing and tell us what has happened to the leads that we gave them a week-and-a-half ago." 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.
Building a New Process
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. "The interface had to be so intuitive that it wouldn't be an obstacle to sales," Pierret says. "It had to be like Outlook. No one goes to training on how to use their Outlook e-mail, but you can't live without it." On accessibility, he says: "We knew that it had to be pretty much 24/7 access, and we knew that the sales reps had to have direct access. We wanted to get the lead into their hands and allow them to immediately tell us what's happening with that lead."
In addition to an intuitive interface and round-the-clock access, 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. "We needed a quick deployment because we had a problem that we needed to fix," explains Pierret, "and we certainly couldn't go down the path of trying to boil the ocean. We needed something very specific that would solve the issues that we were having."
The company, which had several key staffers with a good deal of experience with the PRM and SFA markets and awareness of many of the solution providers, compiled a shortlist of eight different candidates. In the midst of evaluating Nortel Networks' options, Pierret came across a provider called BlueRoads, which specializes in solutions for indirect channel management. Pierret says that he discovered the San Mateo, Calif.-based provider through a Google search. He perused BlueRoads' Web site and read the white papers and other materials that the provider's staff, including its founder and current president and CEO, Axel Schultze, had written on the "pull" approach to lead management, whereby sales reps take their leads from a central database and are responsible for managing that lead and reporting on progress.
Pierret decided to test how good the provider was at using its own process and tools, so he submitted an online request for additional information. "Sure enough, their sales rep called me that same day," Pierret says. "We started the conversation, had a demo maybe a day later and very quickly knew that they were on the short list."
From "Push" to "Pull"
As the Nortel Networks team began to whittle down its shortlist, BlueRoads looked increasingly like the best choice, in part because of the provider's focus on the "pull" approach, its hosted application service provider (ASP) approach and the solution's interface. It also did not hurt that BlueRoads offered Nortel Networks a two-month pilot, with no obligation after the pilot's conclusion. The provider also pledged that the implementation would take no longer than six weeks, versus the two to three months that other providers were projecting. In addition, Pierret says that others of the short-listed solutions were missing some of the flexibility that Nortel Networks was looking for in lead dissemination functionality, while a few solution providers said that they could implement the required functionality but that it would take four to six weeks to do so, with another six- to eight-week implementation to follow.
Ultimately, Nortel Networks did opt to go with BlueRoads, and implementation, begun immediately after Nortel Networks allocated the funding for the project, wound up taking just four weeks. The pilot went live in July 2002 for two months, covering a handful of the company's product lines in the United States. 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 partners 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. "We launched on a Monday, and by Tuesday we had people actually providing feedback on leads that they had pulled," Pierret explains. "At the end of two months, we didn't have a single win, but management was seeing the statistics we were giving them. We had some proposals outstanding — quite a few — and that was enough. But more importantly, the numbers were there. We had the analytics that could tell us what was happening.
Previously, management either did not have access to that type of data, or those data were very difficult to collect and transform into actionable information because of all the disparate processes at work within the company and its channel partners. With better information coming in on the quality of leads, the effectiveness of this or that lead generation campaign, 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. By the end of the pilot, we knew that one of our lead-generation vendors wasn't cutting the mustard, and we warned them. And two months after that, we got rid of them."
The ROI on Better Data
At the end of the pilot, based on the results to date, 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. Says Pierret: "It's like compound interest: when you double something every quarter, no matter how small you start, it gets to be pretty big. And when you start talking several millions of dollars attributable to the program, it starts to get a lot of attention and momentum."
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. "[Previously] a lead program would come through, and maybe one month I'd have the time to really devote the energy to it, but next month I'd let it drop. And by the time that [management] figured it out, it'd be six months later and we'd be on the next program of the month. [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. So now when someone closes a lead as a false lead in our system and says that this person wasn't really looking for a Nortel Networks product, then it's hard to argue that, yes, that really wasn't that good of a lead."
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."