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In an earlier blog post of mine, we explored the concept of Relationship Equity, which is the trust that Services Delivery teams have engendered with their clients that allows them to ask the questions that salespeople can’t. They are able to uncover problems, challenges, and opportunities that customers would generally withhold from a salesperson, or even their account manager. Customers tend to believe that Services people are there to help, not separate them from their money.

If companies can merely document and act upon the knowledge gained by their Services teams, they can tap into a new wellspring of potential upsell and cross-sell opportunities, at an extremely low cost. After all, these Services interactions are happening anyway, so there’s no money out of pocket being spent to acquire these leads. Today, I’d like to expand upon that post by exploring a second concept called “Touchpoint Calculus.”

What is Touchpoint Calculus?

Touchpoint Calculus is a very fancy term we at TSIA use to capture the idea that your Services and Customer Success teams interact with your customers at a rate 5-15x that of your Sales teams. These interactions are generally within the context of helping a customer solve a problem, and are happening with some of your best technical engineers and problem solvers. If companies are going to become or stay profitable in a market where product revenues are declining and initial purchase sizes are shrinking, they absolutely cannot leave these interactions on the table.

services interacts with customers more than sales  

(Click image to enlarge.)
Services interacts with customers anywhere from 5 to 15 times more than Sales.

Why is this so important? It’s critical because this sheer volume of interactions is something that your Sales team could never cost-effectively achieve, and another key reason why Services has to be involved. Think about your inside Sales team for a minute; they spend hours and hours cold-calling and emailing prospects, trying to find someone who is willing to talk to them about what they are selling. The connection rate for cold calls (actually having someone pick up the phone) is about 10%, but the actual hit rate for lead generation on cold calls is about 2%, and for email is about 4%. If you blend those together, you can stipulate that a productive rep can make about 100 communication attempts per day, finding 3 actionable leads, although I’ve run inside sales teams, and this estimate is probably still a bit high. It’s a tough and expensive way to fill a funnel, and it’s why your company has hired an army of recently-graduated liberal arts majors to pound the phones (I say this with love. I was one of them).

How Your Services Team Can Drive Leads for Sales

Meanwhile this “hit rate” becomes a non-issue for services delivery. Not only are the interactions more plentiful, but the customer is coming to you. For your support queue, they are quite literally lining up to talk to your people. Field and professional services time is something customers pay richly for. Now, not every interaction with your Services Delivery team will result in a lead being generated, nor should it. TSIA stands strongly behind its mantra that “Helping will sell. Selling won’t help.” Leads should only be taken when there is a problem that can be solved by your expanded use of your offerings. Still, the opportunities are there.

Based on the findings from our recent survey, “Lead Generation through Services Touchpoints,” we discovered that support services reps at TSIA member companies where there are formal lead generation programs in place generate an average of 35 leads per year. That’s about three leads per rep per month. However, given an average closure rate of 20% and an average deal size of $15k, even at one lead per employee per month, that’s an additional $180,000 in pipeline and $36,000 in revenue per year...per rep. However, to capture these leads, you have to put in the systems to document the lead, get it to the right place, and make sure it’s followed up on. You need the right systems to provide feedback, and management focus to sustain the effort.

[...] support services reps at TSIA member companies where there are formal lead generation programs in place generate an average of 35 leads per year.

Failure to Plan is Planning to Fail

These challenges, unfortunately, are why most services-based lead generation initiatives wither and die on the vine. Companies create grand plans around compensation and forge new systems and processes without understanding how they will sustain the effort. Their triumphant starts fizzle out within the first few months. A launch plan and an announcement email are not enough. Companies must constantly reinforce their efforts and demonstrate by word and deed that lead generation is important. TSIA research, inquiry, and advisory can give you the best practices to help you avoid the mistakes of those who have gone before you. The leads are out there, and the numbers, as Touchpoint Calculus shows us, are simply too big to ignore.

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Steve Frost

About Author Steve Frost

Steve Frost is the vice president and managing director of revenue research and advisory for TSIA. He also serves as TSIA's vice president of CRO Council research, dedicated to revenue optimization. Throughout his career, he has held various leadership and business development roles at companies like Google, Netscape, and Loudcloud, helping them define their go-to-market strategy and business development tactics. Steve is dedicated to helping technology organizations grow their services, subscription, and XaaS revenue by optimizing their practices for growth throughout the customer lifecycle.

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