According to the State of Marketing Report 2023, lead generation is a major concern for most sales and marketing teams, and the trend is likely to continue. The increasing competition and information content overload make it difficult for businesses to find, connect with, and engage with potential clients. This is one of the reasons why most B2B companies in life sciences hire external teams for outsourced lead generation to support and strengthen their sales efforts.
However, outsourcing comes with a few risks that you should be aware of. This article covers three main risks that come with outsourcing:
Inconsistent Lead Quality: The quality of leads affects sales success. Inconsistencies reduce progress and ROI.
Communication Problems: Clear, prompt communication is key for good business relationships. Without it, confusion and inefficiency may occur.
Reporting Issues: Constant issues with communication and reporting can affect productivity and client-vendor relations.
Problem №1: Inconsistent Lead Quality
One of the major pain points often experienced by clients is the inconsistency in the quality of leads generated. This can be caused by a variety of factors, including a lack of clear communication between the client and the outsourced team.
For example, if the client is unable to provide adequate information about their target audience, existing customers and ideal customer profiles, the outsourced team may struggle to generate high-quality leads.
Another cause of inconsistent lead quality is the lack of experience or niche expertise on the part of the outsourced team. If they do not have a deep understanding of the industry or market segment, they may struggle to identify and target the right prospects.
The stakes are particularly high in the complex science and regulations of the pharma and biotech industries, which can lead to significant losses in both time and revenue. The outsourced team should have a thorough understanding of the industry, as well as the client's positioning in the marketplace.
This can be achieved during the onboarding sessions and through regular communication and ongoing feedback between the client and the outsourced team. This way they can deliver high-quality leads consistently, saving time, reducing costs and enhancing revenue growth.
Problem №2: Ineffective Communication
"Communication is key" is a well-known business saying. This is especially true for outsourced lead generation. Good communication links your needs to the service provider's skills. Any break in this link can harm your business growth.
When a service provider hires an outsourced lead generation team to identify new sales opportunities, poor communication can lead to unclear expectations, misunderstandings between them, or unqualified leads that fail to meet expected sales targets.
We will explore strategies to avoid miscommunication issues:
1. Setting Clear Objectives.
Having a mutual understanding of their roles, responsibilities, and expectations by both parties is important. Agreement from the outset helps avoid confusion or misinterpretation later on.
2. Open Communication Channels:
The preferred channels of communication may involve email, conference calls, video calls or a combination thereof. It's essential that all parties are comfortable with and have access to these channels.
3. Regular Feedback:
Discuss a progress, address any issues that have arisen, and plan for future goals. The cycle of planning, execution, review, and feedback promotes transparency and continuous strategy refinement.
Remember, the goal is to transform potential pain points into success stories.
Essentially, resolving ineffective communication issues with an outsourced team should be a top priority.
Problem №3: Inadequate Reporting from Outsourced Lead Generation Team?
Your business finds it difficult to obtain clear and concise reports from their outsourced team? By setting clear reporting standards, businesses can streamline information flow. This will lead to informed decisions and ultimately, better project outcomes.
These standards could include the following:
Regular Meetings: Set up routine meetings for discussions, problem-solving, and goal setting to enhance team alignment (e.g. two or four times per month).
Communication Modes: Agree on communication channels such as email, phone calls, or project tools. Determine the best method for different situations.
Contact Person: Appoint a contact person in each team for efficient communication and coordination.
Feedback: Implement a feedback system for performance assessment and continuous improvement.
Here are some examples of how this might look in practice:
Task | Frequency | Communication Channel | Responsible Person |
Progress Meeting | Every two weeks | Video Conference | Team Leader |
Performance Report | Monthly | Account Manager | |
Goal Setting Session | Quarterly | Video Conference | Top Management |
Understanding Performance Indicators
Implementing the appropriate evaluation metrics is important to assess the performance and efficiency of outsourced lead generation teams. It provides insightful data that can be used to continually refine and improve the lead generation process.
Here are some examples of useful metrics:
Reply Rate: This metric measures the effectiveness of your communication by calculating the percentage of replies to your emails. The formula is simple: divide the number of replies by the total number of outreach attempts, then multiply by 100. A higher reply rate suggests greater engagement hence more effective messaging. For instance, if a sales team sends out 100 emails to potential clients and receives 20 responses, the reply rate would be 20%.
Deliverability Rate: Email deliverability rate is a measure of how successful an email campaign is at reaching the recipients' inboxes. It represents the percentage of sent emails that actually reach the intended recipients' inbox, as opposed to being filtered out or marked as spam. A high deliverability rate indicates that the email was successfully delivered, while a low rate suggests that the email was not successfully delivered and may have been blocked or sent to the recipient's spam folder.
Open Rate: Email open rate, on the other hand, refers to the percentage of successfully delivered emails that are actually opened by the recipients. It is a metric used to measure the effectiveness of an email campaign in engaging the audience. Open rate is calculated by dividing the number of unique email opens by the number of successfully delivered emails, and then multiplying it by 100 to obtain a percentage. It helps marketers assess the level of interest and engagement their email content generates, as a higher open rate generally indicates that the email content was compelling and successful in capturing the recipients' attention.
Conversion Rate: Email conversion rate refers to the percentage of recipients who take the desired action as a result of an email campaign, such as making a purchase, signing up for a service, or filling out a form. It measures the effectiveness of an email campaign in terms of driving conversions or desired outcomes. The formula for calculating email conversion rate is typically the number of conversions divided by the number of delivered emails, multiplied by 100 to obtain a percentage. It is an important metric for businesses to assess the effectiveness and success of their email marketing efforts in terms of driving customer actions and achieving specific goals. According to a survey conducted by SalesIntel in 2020, the average conversion rate for outsourced lead generation in the life science industry was reported to be around 10-15%. This means that for every 100 leads provided by the outsourced team, 10-15 of them resulted in a successful sale.
Cost Per Lead: It quantifies the overall financial investment made to acquire each lead. A lower cost per lead indicates a more cost-effective process. According to a report by the Healthcare Intelligence Network, the average cost per lead in the healthcare industry is around $60. However, this figure can vary widely depending on the specific sub-sector of the industry. For example, the cost per lead for pharmaceutical companies may be higher than for medical device manufacturers due to the longer sales cycle and higher level of regulation involved in the pharmaceutical industry.
Lead Response Time: Measures the time it takes for the sales team to follow up with a generated lead. A shorter response time could potentially mean higher customer satisfaction and, subsequently, higher conversion rates. The average lead respond time in the life science and pharma industry can vary depending on the specific company and their processes. However, studies have shown that the industry average is around 48 hours.
These metrics allow companies to understand their ROI, measure team efficiency, and make informed decisions to enhance their lead generation strategy.
Key Takeaways
In summary, lead generation is a significant concern for marketers, and outsourcing to external teams is a popular solution. However, this can come with challenges like inconsistent lead quality, communication issues, and reporting problems. To avoid these, businesses need clear communication, clear objectives, and open communication channels. Also, setting reporting standards and monitoring key performance indicators can help navigate through data and measure the effectiveness of their outsourced lead generation. By doing this businesses can "turn pain points into wins"!