Monday, August 17, 2009

Lead Management Maturity: Has Your Process Come of Age?

By Stephan Dietrich, President, Neolane, Inc.

While BtoB marketers might scoff at the simplicity and brevity generally associated with BtoC sales cycles, there is a lot that can be learned from the land of instant discounts and promotions. BtoC marketers have traditionally been focused on lead acquisition, and they excel at it. Considering contrasting lead generation approaches including long campaign cycles and multiple touch points, many BtoB marketers face a skills gap compared to their BtoC counterparts as they try to leverage prospect and customer data in a similar way to accelerate conversions to the pipeline.

As complex as the BtoB sales cycle can be, BtoB marketers often run very basic campaigns to match basic sales processes, and, therefore, their lead generation and lead nurturing programs are just as simple—often focusing on email and Web channels and using a single integrated CRM system for ROI measurement. Ironically, in order to create a mature lead management program that matches the complexity of its sales cycle, BtoB marketers need to take a page from the BtoC playbook by leveraging rich customer data from multiple marketing channels to identify the right kind of what research firm SiriusDecisions calls “enablement/knowledge” to quickly overcome roadblocks along the pipeline.

As a company matures to address more complex business models, with additional product lines and an expanding global customer base, it can become more difficult to manage customer data consistently and thus more difficult to nurture the right kind of leads in a consistent and coordinated way across communications channels. There are a number of areas where the richness of customer data can be diminished. The value of data can decline when customer information is siloed within a particular marketing channel, or when a company does not use consistent lead management processes from one marketing department to another, or across product lines. This misalignment can result in skewed customer data that can be defined differently and subject to disparate measurement criteria within separate CRM systems.

In order to mature lead management processes and strengthen focus on lead nurturing and pipeline acceleration, organizations should consider the development of a central marketing data mart that contains customer and prospect information gathered from multiple channels and is updated automatically with new transactions and touches. Second generation lead management solutions can leverage this centralized data mart to accelerate the pipeline by connecting inbound and outbound communications across channels. For example, instead of slowing the pipeline by failing to address prospects’ preferences or issues expressed in the call center, at a trade event, or in a survey regarding a whitepaper, marketers can instead send personalized communications through email, direct mail or mobile channels that are based on this data and can offer the fuel for continued conversation with the prospect –if not an actual conversation.

As companies grow to encompass a variety of departments, products and systems, a single up-to-date system of record for lead, prospect and customer data can become the basis for maturing lead management and customer retention accordingly. By doing so, BtoB marketers can secure and manage rich customer data like their BtoC counterparts, while closing the skills gap and developing lead management processes that more effectively address the complexities of their sales cycles.

Stephan Dietrich is president of enterprise marketing software provider, Neolane, Inc., where he is responsible for driving the company’s corporate vision, worldwide marketing strategy and international business development. A recognized thought leader with 15 years of enterprise software and marketing expertise, has spoken at several major US and European marketing events, such as NCDM, the Annual eMarketing Conference, the European E-Commerce show, the Retail and Catalogue show and Direct Marketing events. Previously, he was president of Cubicsoft and co-founder of AGDS, a company sold to Peregrine Systems, now HP. Stephan holds a Master of Science degree from Ecole Centrale de Paris and earned his Master in Business Administration from the College des Ingenieurs. He can be reached at

Tuesday, August 11, 2009

Lead Source Effectiveness: Allocate Marketing dollars where they matter most (Part 2 of 4)

By Carlos Vidal, Manager, Lead Generation Practice, SBI

In part 1 of this series, we established the value of installing a closed loop contact-to-contract lead measurement process. We promised to explore in a series of follow-on articles, three metrics that are key to this new process. In this second installment we focus on optimizing Lead Generation Spend.

Read More

Most organizations establish metrics for evaluating lead cost effectiveness. These metrics typically capture a lead’s fully loaded cost, but they do not account for lead development time or lead revenue. By introducing the time and revenue variables into their lead calculations, organizations can determine not only which leads generate a positive ROI, but also which sources produce leads that move most quickly and reliably to closure. Lead sources include Trade Shows, Print, Direct Mail, word of mouth, Paid Search, Web forms, etc..). By gauging the effectiveness of a lead’s source, organizations can better allocate their demand generation marketing spend.

Some Lead Spend Metrics
Three of the most widely used metrics for evaluating lead effectiveness are:

• Cost per Opportunity (CPO)
• Cost per Marketing Qualified Lead (CPMQL)
• Cost per Lead Inquiry (CPLI)

These metrics attempt to measure different aspects of marketing spend related to a specific lead source. By adjusting them to account for revenue and time, you can improve the measure of Lead Source Effectiveness. To illustrate, let’s focus on one as an example of a commonly tracked metric, CPO.

Cost per Opportunity (CPO)

CPO = Cost to produce all leads from a Lead Source
# of Registered Sales Opportunities from those Leads

Drawbacks in ‘Standard’ approach to CPO

1. It does not reflect the cost to close the opportunity (only for the cost of opportunity creation). This is important because some sources provide leads that take more effort to close (i.e. on-site visits, pilots, RFP).
2. It does not reflect the average revenue derived from a source’s leads. This is important because sources differ in the revenue they produce (consider this the Glengary Glen Ross factor).
3. It does not reflect the time it takes to close a lead. This is important because some sources provide leads that take longer to close than others. For example, military contractors usually know what they want to buy for a project from prior experience and just need a firm quote, but their funding request could take months to approve.

A new Way to Measure and Optimize Spend
The three drawbacks can be resolved in an improved formula for Lead Source Effectiveness (LSE) of a specific lead source.

LSE = __Average Revenue per Lead __ x 251 selling days
CPO + Avg. Closure Cost per Lead Avg. Time to close Lead

In this new approach, revenue, closure cost and lead turnover are all addressed.

So what have we gained?

We have transformed an unenlightening demand generation metric into a diagnostic tool to aid in decision-making.

The Payoff
Marketing Executives can use metrics like LSE to re-direct investment dollars to those lead sources that generate the most revenue, the most quickly, with the least amount of sales expense. This insight can also help refine your Ideal Customer Profile (ICP). For instance, your ICP might require revision after you determine the true cost of leads for a specific industry segment or buyer type.

The payoff for using LSE (in lieu of CPO) is huge. The only challenge is that it requires cooperation between Marketing and Sales to ‘close the loop’ of demand generation analytics.

Our next article in this series will focus on compressing the buying cycle through correlating content access to the buying cycle.

Carlos is a Principal at Sales Benchmark Index (SBI), a strategic advisory firm that helps executives understand how well their sales forces are performing relative to peer group and World-Class levels. SBI is differentiated through the use of empirical data -- a repository of over 11,200 companies, across 19 industries, 11 years of history and over 315 sales metrics. Through SBI’s sales benchmarking services a company can use comparative data to identify improvement opportunities available by leveraging best practices of World-Class companies.

Tuesday, August 4, 2009

4 Steps To Break Down An Effective Blueprint For Lead Generation

By Mike Gospe, Principal & Co-Founder, KickStart Alliance

One thing is for sure: no two marketing blueprints are exactly alike. This is because each blueprint is guided by a company’s over-arching marketing objectives, target audience priorities, key messaging, availability of relevant offers, and of course, timing. This is why when it comes to marketing blueprints, be cautious of anyone who promotes a “one size fits all” approach to lead generation.

However, we can take a look at how the key components of a lead generation blueprint interact and play in concert with each other. The success of a lead generation program is not because of one single marketing element (e.g. a great Webinar). Instead, it’s about the combination of all of the marketing activities and offers and how they work together to engage the prospect and guide them through (or out of) the lead flow funnel quickly. The best way to see this is through an example.

DV_Graph_GospeThe most effective lead generation programs use a combination of “push” and “pull” activities. A “push” activity is defined as one where your marketing or sales team sends (or pushes) carefully crafted messages and offers to a pre-defined list of prospects. This could be a broadcast email with a generic offer to your prospect database or a rented opt-in list, or it could be a carefully crafted message produced with a single, specific person in mind. Either way, “push” activities are about one-on-one marketing.

But “push” activities are not enough. Consider that 90% of the average buying process is conducted without the aid of a sales rep. When buyers are looking for a solution, usually the first step is searching for information on the Internet. This means that your business must be “findable.” However, being findable is more than just having a Web site. It’s about posting and syndicating relevant content that pertains to the business problems the prospect is trying to solve, and having this content posted in places where the prospect visits. “Pull” activities are those that highlight your expertise and differentiation in a less sales-invasive manner and invite prospects to raise their hands to request additional information from you. These activities are also a form of nurturing prospects because, through these activities, your brand and products will continue to be promoted, thus reinforcing the awareness of your solutions.

Breaking down the Blueprint

There are four components in the lead generation blueprint graphic listed here. Let’s break them down.

  1. The “Push” activities (in dark blue). As I’ve already mentioned, the primary push activities are commonly the direct emails a marketing or sales team sends to prospects. But beware: the quality of lists is highly suspect today because of the volatile economy and the many rounds of lay-offs and reorganizations taking place. We’ve found that much higher ROIs are achieved when a company invests in building and nurturing their own list or targeted personas. If yours is a small business or you’re a startup, take the time to identify target companies and targeted decision makers within each company you want to reach. Use tools like Jigsaw or Hoovers to help you build your list. Then, search each prospect’s Web site; read their current press releases; find out what events they are attending. Look for a connection between their needs and your solution. If you have multiple offers, divide your list in order to perform some tests to determine what offer works best. In this example shown in the illustration, the company is testing the value of a whitepaper versus a case study. (Since we’re trying to establish a connection with a target prospect for the first time, don’t blast them with a datasheet – this assumes they already know you and understand how they might use your product.) First, establish relevance by showing that you understand their business/operations/technical problem. If they don’t know who you are, they don’t (yet) know how to value what products you provide. Take a solutions-focused approach to invite them to get more information from you.

  2. The “pull” activities (light blue). “Pull” activities are especially useful in driving awareness and interest with decision makers who you do not know. Since most of the buying process happens behind the scenes, you want to have a presence on the websites that decision makers use to collect information. This is where syndicated content on 3rd party media sites can make all the difference. Avoid the temptation to discredit these sites because you can’t control who has access to this information. These pull mechanisms work to your advantage by giving you more places to host relevant content, to participate in industry panel discussions, and to interact via virtual tradeshows. As a bonus, many of these media sites will guarantee you a pre-determined minimum number of “leads” (these are really unqualified names); regardless, these activities are more cost effective ways of extending your reach and promoting a richer awareness of your solutions than if you only chose to promote your own company-sponsored events and activities.

  3. A company-hosted event (yellow). Once the push and pull activities are in place, the question is, “what happens next?” You’ve proactively engaged with members in our prospect database on your list, and you’ve offered several pieces of relevant content on third party media sites. While this is good, it is not sufficient to guarantee you’ll receive any leads that meet your level of qualification. To do that, you need another offer to entice all prospects to take the next step with you. In this example, I’ve suggested a company-hosted Webinar may make sense. Why not execute a Webinar first? Why wait until later in the cycle? Waiting to host a Webinar now works to your advantage because you’ve now gained awareness with a larger pool of prospects, and you can promote the Webinar through more channels than if you relied solely on your push activities. While I’ve suggested the Webinar be a “solutions in action” Webinar, the topic must be relevant to your sales process. Of course, to register for the Webinar you can ask additional qualification questions on the landing page.

  4. The follow-up (green). Once the Webinar is over, your lead generation program is not yet complete. Many companies make the mistake of taking the names of all the registrants and immediately handing them to the insides sales team for follow-up. This mixes the good leads with the bad and can set the wrong expectations on the true quality of the leads. Instead, there is one more best-practice: Within 24 hours of the conclusion of the Webinar, break the list of registrants into two groups: those who registered and attended, and those that registered but failed to attend. Each follow-up email needs its own precise call to action. For those who registered and attended, the expectation will be that those leads may indeed be more qualified simply because the prospect has sought out information about your company/products several times already. The prospects that registered but failed to attend should be nurtured again and placed back into the lead gen funnel.

Building your own blueprints
This is only one example of a lead generation blueprint. There are many other forms to consider, and the limits are only those of your imagination. While the approach illustrated here has worked for many teams KickStart has worked with, it may or may not be appropriate for your business. Before you jump to any tactics (such as a Webinar), it’s always a good practice to confirm your marketing objective and your lead generation strategy. With a firm foundation in your objective and strategy, the right marketing activities and offers will be easier to define. Good luck and good marketing.

For more information on awareness and lead generation programs, please visit my blog: Marketing Campaign Development or follow me on Twitter.

Mike Gospe leads KickStart Alliance’s marketing operations practice where he conducts team-based “practical application working sessions” to improve the effectiveness of lead generation campaigns and product launches. His fun, practical approach and roll-up-his-sleeves attitude energizes teams, helping them to get “real work done” while guiding them to the next level of excellence. Mike is the author of the book, Marketing Campaign Development, and his methodology is being used by San Francisco State University’s College of Extended Learning course: “Essentials of Integrated Marketing.”