How the “Care Factor” Impacts Revenue

When I was VP of North America Teleprospecting at a $3B Global IT Solutions company, I managed a team of 40+ Teleprospectors based in the US, EMEA and AsiaPac. Our job was to feed quality Sales Qualified Leads (SQLs) to the 1500 person Field Sales team. Our focus was Global2000 companies with budget to purchase solutions in the $250K-$2M range. Typically our calls were with CIO/CTO’s, VP’s of Development/IT, etc. Each Teleprospector was to generate, on average, 8-10 highly qualified SQLs each month. Our annual SQL to sales pipeline quota was $7.5Million per Teleprospector.

After the first few months in this position I noticed a strange cycle that occurred at the end of every month and especially at the end of every quarter. What happened, at these times, was that the SQLs from our department were completely ignored by the Sales team. The worst time was at the end of every quarter, when SQLs would not be called until some 15 days, or longer, after they were passed to sales.

My managers and I started to track this cycle, which we called the “Care Factor”. We dubbed it so, because Field Reps were very interested (cared) in SQLs during the first month of every quarter and they ignored SQLs during the last week of every month. During the last month of the quarter, after the 15th day, the Field wouldn’t touch any new SQL at least for a few days after the quarter ended. This was often as long as 2 full weeks after the SQL was passed. By now, the SQLs were stale. Stale SQLs require requalification.

The Care Factor impacts revenue in several ways:

  • Constant requalification of leads is a waste of limited resources. Most companies, including our, don’t have enough Teleprospecting horse-power to support their sales organization. Rather than going after new prospects, we were regularly required to re-qualify solid SQLS that had already been contacted and previously qualified. Thus preventing a steady stream of new SQLs to Sales.
  • The SQL-to-pipeline quota was impacted and delayed.
  • Field teams delay in follow-up can give prospects the impression that your company is not responsive. Many of our SQLs were with C-Level Executives who took the time to answer the Teleprospectors questions and/or gave us the right person to contact. The delayed response made our company look bad because of the slow follow-up by sales. I have heard, from clients, that many of their deals were lost due to lack of Sales responsiveness.
  • Growth of the Sales Funnel is hampered, as quality SQLs are delayed. In some cases, SQLs won’t make the funnel because of the delay in follow-up. The delayed funnel growth has a direct impact on when deals will close.

We had a SQL follow-up rule in place for the Field. SQLs needed to be contacted within 48 hours. There wasn’t one Regional VP of Sales who cared about this rule at the end of the quarter. Our company, like most, suffered from the ”hockey stick” factor; a few deals close at the beginning of a quarter while most deals are closed at quarters end (spiking up, like a hockey stick). The “hockey stick” factor caused the Field to be super busy with trying to pull in revenue. They had no time to reveiew potential opportunities (SQLs). The combination of these 2 factors “hockey stick” and low interest (Care Factor) create a vicious cycle that impacts pipeline and revenue growth.

I have yet to find a company who has vanquished the “hockey stick” factor. From my perspective this hockey stick sales pattern implies that deep price discounts are being offered at the end of the quarter in order to meet quarterly quotas, which in turn, trains customers to wait until quarter end to buy. Here are a couple of suggestions for managing the”hockey stick” factor:

  • Following up with SQLs, quickly throughout the quarter, helps to build a larger sales pipeline, consistently, throughout the year. When more opportunities are in the sales pipeline, more opportunities are available to be closed, throughout the year, not just at quarter end.
  • Conducting a financial analysis to see whether deals were won or lost, each quarter, by utilizing deep price discounts. If Sales Reps use a strong sales methodology like Power Base Selling or Solution Selling to build need and create pain, they should be able to close deals anytime and without utilizing discounting as a sales method.

My solution to the “Care Factor” problem is this. Each Regional Sales Office should assign one person to review SQLs, as they come in. SQLs should go to the Sales Rep who has the bandwidth to work the deal, at the time the lead is passed over. It is far better for your company to be responsive to the needs of your prospects than to let quality SQLs slip away or to stall, due to lack of timely follow-up. If you must, create a commission sharing model to keep the peace amongst your Field Reps. In the end, your company will build quality sales pipeline and a lot faster. The Teleprospecting resource will be utilized efficiently, as time will be spent garnering new SQLs, vs. re-qualifying old SQLs. The benefit to your company will be a consistent flow of opportunities to your sales pipeline which will mean more revenue, each and every quarter.