Mining social relationships for sales leads

Traditionally companies divide the leads assigned to in-house sales reps by territory. Networking solutions company Network Hardware Resale, however, has decided to assign leads by social connections.

Using technology from sales intelligence company InsideView Inc., Network Hardware has created a companywide graph of connections between its employees and executives on the one hand and its network of customers and prospects on the other, to uncover previously unknown or unrecognized relationships that may lead to more cordial introductions and warmer leads.

“The days of cold calling or blast emails are over for us,” said Michael Lodato, senior VP-sales and marketing at Network Hardware, based in Santa Barbara, Calif. “Social connections are driving a fundamental change in the way we approach prospects. My sales team now has access to the insight they need about each person in the CRM system. They are often able to leverage a warm introduction from a colleague on the first touch.”

Lodato said the company came up with this way of assigning sales leads about five months ago. Marketing is responsible for things like search optimization, but salespeople are responsible for generating their own leads.

Network Hardware has all its sales reps registered on the professional networking site LinkedIn. The InsideView platform, tied to the company's CRM system, parses relationships several degrees deep, including friends, customers and prospects, as well as their colleagues and former colleagues.

The method allows sales to uncover relationships with prospects or former customers even after they've changed jobs once, twice or more.

Lodato said leads based on social relationships are a key sales element for Network Hardware because of its business model; it sells used networking and communications technology equipment from such companies as Cisco Systems, Dell Inc. and Juniper Networks, and installs and services the equipment as well.

“When you're selling preowned equipment you're selling trust,” Lodato said. “It's about whether you'll be there at midnight to fix something the job is counting on. Now, with our leads based on social relationships, we're loading that trust up front.”

Sales enablement has transformed the role of marketing in many ways, according to Ralf VonSosen, VP-marketing at InsideView.

“My own life has changed over the past few years, as marketing and sales have become closer and closer,” VonSosen said. “Before, we used to throw leads over the fence to sales. Now we have three meetings a week with them.”

As a result of the switch from assigning leads by territory to assigning them by social relationships, Network Hardware has seen a big jump in arranging meetings with its prospects. Before, it got in the door 20% of the time; today, its rate of arranged meetings is 60%.

“We're no longer cold-calling,” Lodato said. “We're doing research, finding out more and more about prospects, and coming up with the right conversations. Sales scripts are dead.”