The leads are weak, John!

What Glengarry Glen Ross shows us about the data broker leads process.

I’ve been thinking A LOT about Lead Generation lately.  Maybe it’s because we just expanded from 2 salespeople to over 40 (in North America alone) by joining up with the Coface Group.  Maybe it’s because we just launched Diligence Leads to about 25 Chambers and World Trade Centers in the US.  Or maybe it’s thinking about the potential of a market downturn and how important it is for me to keep a full pipeline of potential projects to grow Rel8ed. 

Now, thinking of Leads makes me think of The Machine.  As in, Shelly “the Machine” Levene from the classic sales movie Glengarry Glen Ross (1992).  Yes, that eminently quoted, reviled, yet somehow revered movie about uncouth salespeople, unfair sales contests, and unwitting sales marks.  This wonderful story introduces us to the mythical “good leads, the Glengarry Leads” that represent a MacGuffin¹ of sorts in this great David Mamet script. 

Coffee is for Closers, and other famous sayings 

This movie has a higher percentage of superstars than nearly any other movie I’ve seen. Maybe Redford’s “All is Lost” wins that contest, but these actors actually speak - boldly, and foully too.  Alec Baldwin, Kevin Spacey, Jack Lemmon, Al Pacino, Alan Arkin, Ed Harris, and Jonathan Pryce each take a turn, while turning our stomachs with some truly insightful bile on the human experience.  Here are your Cole’s Notes² on this gem: 

• Salesmen are vulgar, conniving, yet somehow pitiable in their desire to win deals and make commissions off unwitting Buyers. They desperately need to make money and enjoy beating each other down. 
• The target Buyer is dumb or emotionally strained and can be sold anything.  When they walk away from a deal, they blame themselves.  Pryce: “I don’t have the power to negotiate this.  This is my fault.  I know I let you down.” 
• Baldwin: “I’m here to tell you about this month’s sales contest.  First place is a new car, second place is a set of steak knives.  Third place?  You’re fired.” 
• “These are the new Leads.  These are the Glengarry Leads.  And you don’t get them.”  They’re expensive, and highly desired. 
• Spacey: “Anybody who falls below a certain mark, I’m directed.  I’m not permitted to give them the premium leads.” 

• If you can’t make a sale, you might consider stealing the Glengarry Leads and selling them to another sales outfit. 
• Everybody thinks it and somebody does it, though it might not be who you expect.  Deals, careers, and remaining dignity are lost.  

While the raunchy language of Baldwin’s “Coffee is for closers” speech usually gets top billing online, there are several even more poignant scenes that make me smile/wince/commiserate with the characters in this tragedy.  The entire movie is worth a watch when you have the time (it’s “free with Ads” on Youtube). 

Warning: Sincere apologies for the language in the movie.  In this case, I actually DO think the rawness captures something of the essence of this situation.  Call it the necessary realism of Mamet’s art.  And it bears out in business life: if your sales comp plan is properly tuned AND you have the right people, you’re probably going to have some tough talk amongst your sales team.  Something to contemplate and study³. 

The Problem: Valid Reasons the Leads are Weak 

The core premise of this movie hits home for me.  Rel8ed is in the data business, and a good portion of our work is finding companies that are good matches for our customers’ sales teams.  What we hear from our customers as they talk about struggles working with data vendors (including us): 

• My Head’s in the Clouds 
  • Too much fluff about “AI” – if everyone claims to be predictively selecting prospects, why are we still struggling to convert and close? 
  • Too much noise: Data’s cool but we don’t know what we’re looking at; We don’t know how to interpret the metrics; The data delivered is too complex for my needs. 

• The Data You’re Giving Me is Rough 
  • It’s just plain wrong:  Out of Date; Wrong Contact Information; Wrong Company Information 
  • It’s not value-driven:  The way major vendors price their data is too expensive to find what I’m looking for 

• I Have Unrealistic Expectations 
  • Data isn’t solving my problem: I’m looking for a silver bullet, and your data misses the mark. 
  • I already know what I need to know: I’m convinced I know my market, even if I don’t have the info to back it up.  Why are you telling me something different in your analysis? 

Trust me, these are tough challenges to hear.  Every data company that’s honest has to deal with this list and more as we work to help our customers succeed with our products.  Like Spacey’s sales team, some are more honest than others about these problems. 

I break down companies in the Leads space into two categories:  Data Brokers who sell files selected by the customer’s request categories, and Analytics companies that perform some level of deeper analysis on data (theirs or others’) to select a target list for a customer.  Some companies specialize in one or the other modes; others like Rel8ed have offerings in both categories. 

The Data Broker Leads Process 

Here’s your standard “buy a list” approach, with flavors we see in-market and in our own requests from customers: 

• Target List Vendors:  pre-packaged lists of contacts on a particular segment.  Farms in the Midwest.  SUV Owners in the suburbs.  Maybe, just maybe, a vanishingly small subset of these random contacts will be interested in what you have to say.  Pacino: “How am I gonna make a livin’ on these deadbeats? Where did you get this one from? The morgue?” 

• “Guessed” Interest Groups:  People and Companies who have expressed interest in an adjacent area.  Consumers who signed a card to win a free vacation and might respond to a timeshare pitch.  Companies that exhibited at a trade show, or are members of a trade association, and might be interested in your product in the same space. 
• “Observed or Demonstrated” Interest Groups:  People and Companies who have asked in the past for information.  Whitepaper subscribers, companies who visit your website to browse your solutions.  
• Super-targeted Lists:  using selection criteria to hone in on the right targets.  Give me all the Exporters of Women-owned companies in this geographic area, with a revenue base between X and Y. 

In the aggregate, this type of data is closest to the Glengarry Leads concept – Lemmon:  “Just give me some leads that don’t come out of a phonebook and I can close them.” Or email ‘em.  Or robo-dial/call center ‘em. 

Yet too often we still say the Leads are Weak.   

The reason for this is our Law of Big Numbers mentality:  we know the more people we attempt to contact, the more potential sales we can move forward.  Common sense as far as it goes.  “You miss 100% of the shots you never take,” says my 7 year-old’s hockey coach.  But here’s the rub:  the industry measures cold-contact success rates with numbers like these: 

• Cold Call meeting rate: 10%; Sales Conversion rate: 2% 
• Cold Email open rate:  20%;  Click Rate: 2%; Sales Conversion rate: 1% 

How in the world would we think our leads are strong with these numbers?  I mean, if I told you that out of every 100 basketball shots you took that you’d sink 2 of them, would you say you’re a good baller?  No, you’d bench yourself.  If you planted 100 tulip bulbs and 1 flower grew, would you say you have a green thumb?  You’ve move to plastic plants – after complaining vigorously to the garden store for a refund. 

A secret, which should be apparent by now: all cold lists of Leads are inherently weak. 

Honorable mention to the super-targeted lists, which tend to outperform a truly cold list by about 2-3x. So we now make 5 baskets out of 100 and grow 3 flowers. Yay. 

The AI-Driven Leads Process 

We recently embarked on a multi-month process with a large client to help surface new business leads for an expensive B2B product.  Our first pass looked like this: 

• Receive the customer’s file of prospects (purchased from a data broker) and the customer’s file of current clients. 
• Use our matching engine to match these companies to our Advanced Business Data  
• Find specialty data to append to each record.  In this case, it was export and commodity information and deep business categorization tags. 

• Use our Categorizer NLP tool to create similarity ratings between current customers and the prospect list. 
• Score the prospect records and surface the “best leads” to call on. 

A lot of work, but it paid off initially with a lift in conversion from cold to warm contacts.  Great first step! How did we do in the first quarter?  We got about a 20% lift over prior methods, by prioritizing which companies to call off a cold list.  In this case, calls to meetings booked went from 10% to 15%.  Forecast closure rate increased, for a net increase of 5% in revenue in this product line. 

Hey, that’s pretty good, and meaningful for the client.  ROI on the effort? 10x their spend with us. 

But guess what?  The Leads were better, but still weak by any normal measure.  To get this boost, we needed to process over 100,000 candidates to get to the 10,000 Leads that led to the final increase in success rate, which was just a handful new accounts in the end. 

Change your View: It’s the Process, not (just) the Leads 

Back to our movie, Baldwin goads the sales team: “The leads are weak?  You’re weak!  I could go out tonight with the materials you got and make myself 15 Grand.  Tonight!  Can you?”   

There’s a hunk of truth in this raw statement, as tough as it is to hear.  Sales executives live on their wits and ability to find needs, craft solutions, and create the tension necessary to move a deal across the finish line.  In some respects, the Leads don’t matter nearly as much as the approach. 

But let’s be real:  most of us are not selling scrub brush land in Arizona to unwitting seniors looking for the adventure that escaped them in their dreary lives (please tell me you’re not!).  Adjusting your process to become a bit more prevaricating or improving your dissembling capability with customers might be tempting, temporarily. But what we really need is a better way to sift, sort, prioritize and execute the touches we have with our prospects. 

In future posts, I’ll outline more of the thinking we’ve created in this space on how to properly increase sales effectiveness with data using better thinking, stronger tools, and yes, the best information you can get your hands on.  A teaser for you here: 

1. You need to start with a solid list.  Today, we set a general rule with clients to start with super-targeted information as a base.  Even when asked for “just a simple list of X” we push the customer just a bit to think about the deeper traits that can help segment a population. 
2. You need humans to dig into the data.  If there’s a secret sauce to what we do at Rel8ed, it’s the merging of the world’s public data with a human-curated AI machine.  Trust me:  the injection of a real human into a lead generation strategy makes all the difference. 
3. You need to commit to feedback loops.  One of the biggest mistakes we see in the market is the vending of “the list” and then sitting back to watch results.  If it’s good, we buy the list again.  If it underperforms, we change the list.  SO WRONG!  The most important aspect of our list improvement approach is to take your results, find what works and what doesn’t and then re-do the list with better predictors.  Regularly, and with intent. 
4. You have to multi-channel, multi-touch your prospects. Build a relationship, not a transaction.  We always seek data with enough richness to allow for multiple contact streams.  It’s super-important to a vital long-term sales process. 

So much to talk through, and we’ll do this over the next several months.  Meantime, wishing you grand success with your data and leads.  May you increase contact with prospects who will “sign on the line which is dotted.” 

Go and do likewise, people. 

-- Bob 

Endnotes:

[1] I call the Glengarry Leads a MacGuffin (a mystery like the Maltese Falcon because while they serve to drive the plot forward, they’re actually never really seen and they likely are not much better than the “old stale leads.” But this movie would not exist without them!

[2] Cole’s Notes (for you non-Canadians) are Cliff’s Notes – summaries of texts that help you avoid full reading. In the Internet age, these would also be 10-minute YouTube reviews my daughter favors over actually watching a full movie. Ugh.  https://en.wikipedia.org/wiki/Coles_Notes

[3] There are numerous online treatments of Glengarry Glen Ross and its implications for sales teams. Two I’ve found helpful: Built-in’s view of bad sales behavior and a PWC Author’s view of the broader concepts of sales competition and trust.