One of the key aspects of ensuring that your company's sales team has the chance to be successful is to select the right referral generation company. If you make the wrong choice, there are a significant number of possible drawbacks including invalid leads, wasted time or even legal concerns. However, if you make the right choice, there are many more advantages including company and sales individual success.
Obviously, a concern faced is that one doesn't wish to work with a company that does not fit your needs. How does one select the right company?
Although the choice of a referral generation company is ultimately a personal choice and a 'gut' feel, there are a couple of criteria that I personally would use. If I was going to hire a company to do my lead generation for me, I would want to make sure that these few minimum requirements are met.
Are you a number or a person?
Some of the companies out there are so large or so narrowly focused on cutting to the cheapest price possible that they're willing to work with anyone and bring on more partners than they really can handle. I say partners because the best lead generation companies are, in my opinion, not a 'normal' client/vendor relationship — it is a relationship built on mutual success.
Are they available to you?
This should be obvious, but in doing business with a lead generation company, you should be able to reach them, at least during their normal hours, and speak with someone. Its not necessary to immediately talk to them under most circumstances, but at least receive a call back within one day; a response to an email should be in the same time-frame. There should rarely, if ever, be a reason that a company doesn't respond to you for a longer period of time. Even better would be if you can get a single point of contact with whom you can co-ordinate that has access to all your preferred methods of communication.
Do you feel like you trust them?
Do they have referrals?
Both sides need to be able to trust each other. You need to trust that the leads you're receiving are worth your time to call and they need to trust that the leads they're giving you are going somewhere. There are companies who don't care and simply hand off bulk leads without ever looking on, but these are the companies that I would, personally, avoid. They are more interested in simply generating their bottom line $$ than they are in creating a partnership.
Asking for referrals is not a bad thing. Most companies, at least existing ones, will have referrals that they can give you. Even new companies may have the ability to give referrals regarding their management team. Sites such as LinkedIn or letters of recommendations from past employers give a good viewpoint on skills and personal quality, if not the company itself. For example, my profile on LinkedIn indicates that I have 23 endorsements for past positions. To see the endorsements, you can become a member (free) and view the specific details.
Is it a partnership?
In my opinion, the best referral generation companies are those that have a stake in your success AND you have a stake in theirs. This could easily be my personal viewpoint on how companies should work getting involved, however I strongly believe that success is best gained by all parts of the chain having a positive experience. If the end client is satisfied, the product company is satisfied and the sales associate is happy. If the sales associate is happy, then it means that the lead generation company has done their job and they're happy. If the referral generation company is content, then it means that the lead generation associate has done their job and they're happy. All in all, the entire chain of effect is impacted. This is best realized by all sections of the chain trusting each other and successfully implementing a process of success.
What is their success rate?
What are their projections for your product/service?
These questions are both based in the same bottom line: Numbers.A company that has been around for a while will, or at least should, have figured out how well they do.
A new company may not be able to give you past history, for obvious reasons, but they should be able to talk to you about their projections and why they think these projections are logical. An existing company, one that's been around more than a year, should be able to give you the exact numbers for their entire program line. They should be able to tell you how many cold contacts they need to generate a single referral. They should be able to tell you, on average, how many referrals a company takes to gain a sale. From there, the company should be able to work with you to identify whether past history should be a good indicator of future success or whether the numbers would need to be changed for your product. Based on the Direct Marketing Association, lead generation should be at about an 8% success rate and sales should be somewhere between 1.6% and 2.0%. This would indicate a 20% close rate of all referrals sent to your company, a reasonable number if the prospects are as strong as they should be and your sales team is qualified. The 8% depends significantly on the current market, the product sold and the skill of the telemarketers. I've seen anywhere from 5% to 13%, but 8% is a decent average number to start from. The referral generators should be spending a maximum of 5, occasionally 10, minutes on the phone with any prospect. Their job is JUST to generate interest and garner a prospect that wants to talk to your sales people — its up to your sales people to close it from there.
Do they rate their referrals?
This is probably one of the main points that you may not have thought of. Most of the above are simply a re-iteration of a good way to identify a company and some basic thoughts. Rating referrals, however, is something that many lead generation companies do not do and, again my opinion, should. Without rating referrals, all you're getting is "yes" and "no". I don't feel that this is enough information. There are at LEAST three levels of referrals, two of which matter to a company receiving them. It is certainly possible to come up with a more complex calculation to determine priorities based on criteria such as projected purchase date, budget, employees, etc to generate a rating, but a handed off referral should have a little more information that "This is a referral. Call them." The two levels should be: Very interested and Needs Work. Very interested should include those referrals that have said something along the lines of "This is perfect! I've been looking for something along these lines for a while and it sounds great. I just need a final quote and we should be able to buy it." In truth, you should receive about 5-10% of your referrals in this category — if you're lucky. It isn't a category that comes through very often, but a company should at least have it. They are the clients you should be picking up the phone on as soon as you get the list and dialing their numbers. The other, "needs work", is the more typical referral. A company that needs more information than the lead generators have, perhaps they want a demo, a custom quote, have some in depth technical questions… A prospect that isn't sure if it fits into their budget and needs a bit of tugging. These are examples of good referrals that could turn into a good sale with just a little bit of nudging.
Depending on your company and the products/services being generated for, there are other questions and responses. The main thing, however, is whether the company is new or old, it should be a partnership and a positive relationship.
Good luck selecting your next lead generation company!