Northbound helps companies turn marketing leads into sales

Silicon Valley / San Jose Business Journal

by Jon Xavier, Researcher/Reporter

Friday, March 2, 2012,

Northbound President Srikant Sharma
Vicki Thompson

Outsourcing has a bad reputation, but Northbound DGS Inc. President Srikant Sharma says the word doesn’t always deserve the negative connotation.

At its best, Sharma argues, it lets a company or organization bring more resources to a problem for less cost than they could by keeping it in-house.

That’s exactly the advantage that Northbound seeks to bring to marketing. His boutique firm consults on every stage of marketing, from research to strategy to implementation, with a specific focus on sales leads — collecting them, analyzing them, and then passing along leads that it believes are most likely to convert to a sale. That’s a service that can resonate with business owners, particularly in slower business cycles where every cent spent is critical.

“When it gets bad, everything comes back to the question of, ‘How does that affect the bottom line?,’” he said. “The first things that get whacked are fluff projects. The focus tends to be on more direct field activity — how do you get more money, how do you get more customers? Our goal is every single proposal we make has to say, ‘Here is the projected revenue growth.’ That’s our promise. We’ll live by it or we’ll die by it.”

Sharma’s firm, which spun out from the business services consultancy Northbound LLC in 2009, is currently at about $10 million in annual revenue, he said, but he projects that 2012 will be a very big year.

He says three big trends are moving companies to outsource more marketing functions: cost-cutting and more focus on efficiency, social media, and increased product and market complexity.

The first trend is a result of the recent bad economic times, which had companies slashing marketing budgets. Now that the market is recovering, companies are looking to spend money again, but that doesn’t mean it will be back to business as usual, Sharma said. Companies are still going to want the most bang for their buck, something Sharma thinks his firm is primed to provide.

Sharma sees the explosion of social media driving his business, because it is a marketing tool that’s increasingly critical, but which he says many companies don’t understand. He thinks his firm could find a lot of work helping them make sense of it. The biggest problem he sees most companies making is trying to use it immediately to sell, which turns potential customers off.

“The least successful companies are doing a constant sales pitch. That is absolutely the wrong way to do it. You might as well close the community because it will be gone in a couple months,” he said. “Rather, the point of social media should be to listen to your customers, establish yourself as an expert, and build your brand. If you do that, when people are ready to buy the sales will come.”

Perhaps because of the ubiquity of marketing provided by the web and social media, there are more products competing for consumer’s attention than ever before. Especially in tech, those products are increasingly specialized, Sharma said. That calls for a more experienced marketing team, a team that in many cases would be difficult for all but the largest companies to maintain in-house.

That was certainly the case for Santa Clara’s LiveOps Inc. LiveOps Inc.Latest from The Business JournalsFollow this company , which outsourced sales lead generation and qualification to Northbound in 2010. LiveOps only had four workers on lead generation, said Lisa Hathaway, director of demand generation at LiveOps at the time. Since lead generation tended to be a lower-level position at the company, it was difficult for her to maintain a strong internal team because experienced and effective workers tended to quickly move on to other roles. By outsourcing to Northbound, she was able to immediately increase the effectiveness of this position, she said. LiveOps saw a 10 percent increase in leads in the first month, and it only increased from there she said. And since Northbound charged by the lead it delivered, rather than by the hour or by the project, it was significantly cheaper than her in-house team as well.

“Their business model just really makes sense,” said Hathaway, who is now senior director of marketing at BrightEdge Technologies Inc. “They didn’t charge me per person, they charged me for the sales-qualified leads. That’s what’s important at the end of the day.”

Matthew Bowman, director of demand generation at the enterprise software firm Allegiance Software Inc. said he was initially skeptical that this role could be outsourced, but brought Northbound in on a pilot program to help him sort through a neglected pile of leads that had gone cold. The results were far beyond his expectations, he said. His sales team went from working on 4 to 6 deals worth about $40,000 to $60,000 each, to doing 12 deals worth about $100,000 each.

“I honestly was not expecting to see results that quick,” he said. “These are not junior guys right out of college making calls, these are senior sales reps who know how to talk to really senior level people at big companies. How to get their attention. And do it quickly. Because I gave them thousands of names and they just slammed through those things fast and were able to find those prospects that were in the market, right now.”

Jon Xavier can be reached at 408.299.1826 or

Northbound DGS Inc.
Location: Sunnyvale
President: Srikant Sharma
Revenue: $10 million
Founded: 2009
Employees: 20
Phone: 408.245.6500

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