Salespeople dread dead-end leads. They're eager to pitch to CEOs, so they're livid when the prospecting process leads to meetings with janitors.
"You can't make a bad sales rep good just by giving him good leads," said Bill Johnson, CEO of Indianapolis-based startup LeadJen. "But you can tell quickly if your message is [reaching] the people you want to hear it."
Johnson knows the dilemma well. He has two decades of experience selling software and is best known locally as the former senior vice president of sales for marketing software-maker Aprimo Inc. He also founded WillyLoman.com, a Web site-named for Arthur Miller's "Death of a Salesman" protagonist-where salespeople can exchange their contact lists.
Debuting in 2005 as an additional revenue stream for WillyLoman.com, LeadJen uses a proprietary analysis and prospecting process to cultivate sales prospects for its clients. Vice President Jenny Vance, who had worked for Johnson at Aprimo, came aboard to develop the service, which quickly proved more promising than its parent.
LeadJen has landed some of Indianapolis' most successful software firms as customers, including Aprimo, ExactTarget, Bostech Corp., PAN and Baker-Hill. Johnson said it generated $300,000 in revenue during its first year, then doubled that in 2006. With 40 employees, LeadJen already has booked $1.2 million in sales for 2007, he said, and should reach $2 million by next year.
The rapid gains make sense, said Tech-Point President Jim Jay, because Lead-Jen's service fits the needs of central Indiana's growing software sector.
"When you're cultivating a new market, trying to open new doors, that's always the key [question]: Who is the decision maker?" Jay said. "Sometimes, it changes from discussion to discussion. The more information that can be provided on that, the more successful companies will be to close deals."
LeadJen's approach to generating prospects boils down to the difference between a shotgun and a rifle. Software sales strategies often emphasize the large quantity of leads generated by Internet search engine optimization or blast e-mail advertisements. LeadJen concentrates on ensuring the high quality of its leads.
In a consulting role, LeadJen begins by intensely researching the potential market for its customers' software. It then builds lists of prospects, based on the likelihood they would use a particular IT application, and painstakingly checks to discover who might make decisions about the purchase and verifies their contact information. Next, LeadJen initiates a series of telephone and e-mail communications with those decision-makers, attempting to land appointments for sales reps. Finally, LeadJen delivers reports analyzing what worked and why.
The crux of LeadJen's value, Johnson said, is its expertise in identifying ripe prospects and politely wearing down their resistance over time. LeadJen's proprietary research has discovered that executives in differing industries vary in their typical responsiveness. Some can be predicted to answer one of the first three phone calls they receive. Others need at least eight call attempts over a span of several months. Then there are the executives who will never respond, no matter how often they're contacted.
LeadJen's services don't come cheap. The company gets $40 to $50 per hour for market research and prospecting. And when LeadJen's work results in actual sales meetings, it charges up to $150 per appointment kept, depending on who initiated the face time.
Adam Sarner, principal analyst for Stanford, Mass.-based technology research firm Gartner, said the competition among firms that generate software sales leads has heated up considerably. Each company varies in its approach.
But the bottom line, Sarner said, is that the sales successes of its customers makes or breaks a prospect provider like LeadJen.
"You can bring the horse to water, but you can't make it drink," he said. "Their success rate depends on how valuable their research is in getting to that decision maker."