2011 trends and challenges

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The economic pressure is not letting up and 2011 will demand more of B2B marketers than ever before. How can you deliver what CEOs most want – quality leads - within tight timelines and even tighter budgets? Where should you place your priorities? How can you rapidly make an impact on your company’s revenue capacity, profit, and growth?

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2011 trends and challenges

  1. 1. 2011 Lead GenerationTrends and Challenges J. David Green Director of Best Practices, MECLABS #b2bleadgen
  2. 2. Agenda • Audience Poll • Challenges and Trends • Economics of Demand Generation and Lead Management • Sales costs and a cost-avoidance argument • A revenue capacity argument • Metrics • Summary – Key Takeaways 2#b2bleadgen
  3. 3. Today’s speaker J. David Green – Director of Best Practices, MECLABS en & id Gre or Dav ayl y J. ael C. S • Case study: $1B pipeline in 20 months B Mi c h • Author and co-author of numerous white paper, blog posts, articles, and the book, The B2B Refinery® • Speak at MarketingSherpa, DMA, and other events • 25 years of wide ranging B2B lead generation experience • Working with large Cisco partner on lead nurturing projects • Consultant on technology channel marketing 3#b2bleadgen
  4. 4. MECLABS: A science lab with a consultancy • More than 10 years of research • 1,300+ major experiments • Over 1 billion emails • 10,000 sales-paths tested • Hundreds of publications and conferences 4#b2bleadgen
  5. 5. Audience poll • How many direct or indirect sales full time employees do you support with leads? • 500+ • 100-499 • 50-99 • 20-49 • Less than 19 5#b2bleadgen
  6. 6. Audience poll • On a scale of 1-5, how advanced would you say your lead generation practices are today? (5=best) 6#b2bleadgen
  7. 7. Challenges & Trends
  8. 8. What is the biggest worry of innovative B2B marketers? 8#b2bleadgen
  9. 9. The challenge • In 2009, 68% of marketers saw generating high quality leads as their number one business challenge. • In 2010, the percentage rose to 75% Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report 9#b2bleadgen
  10. 10. The challenge For the last three years, marketers have focused increasingly on lead quality. This focus, in turn, has placed greater emphasis on: • Data hygiene and enhancement • Lead nurturing • Lead scoring • Funnel metrics • Alignment The current economy intensifies C-suite demands on marketing for ROI 10#b2bleadgen
  11. 11. What are the content implications of lead nurturing and lead scoring? 11#b2bleadgen
  12. 12. Based on trends in 2010 and projected for 2011, nurturing and scoring depend on content • More segmentation for relevance (personas, stage of consideration, verticals) • Low-production value content (e.g., blogs, raw video) • More employee writers/thought-leaders • More re-purposing/multi-purposing • Content aggregation services through web-crawling and linkage/summary • Integration of social media into lead nurture streams (as well as a demand generation tool) 12#b2bleadgen
  13. 13. What are data implications of lead nurturing and lead scoring? 13#b2bleadgen
  14. 14. Based on trends in 2010 and projected for 2011, relevant content-nurturing requires data • Less-end user data capture at the top of the funnel • Incremental, optional, conditional end-user data capture • Great focus on data hygiene • Data appends (account, contact, triggers) • Account-level modeling (propensity to buy and buying potential) • Content extrapolation of problems, function, level, depth of interest 14#b2bleadgen
  15. 15. Economics of demand gen: The cost of sales follow up
  16. 16. How does sales leadership see the economics of lead generation? 16#b2bleadgen
  17. 17. Eight out of ten marketers hand raw leads straight to sales Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report 17#b2bleadgen
  18. 18. Mountains of leads, molehill of sales New leads 40 100 Filled out web form, called toll-free number, visited booth, hours attended webinar, etc. Valid leads 28 - 34 70 - 85 Insufficient info, bogus info, hours not in target market Sales-ready leads 1.6 – 2.8 4-7 Lead scoring, tele-qualifications hours Decline in lead population through @ up to 5 attempts/lead the funnel’s early stages. & @ 10 dials/hour 18#b2bleadgen
  19. 19. So what should those funnel numbers mean in terms of expense? 19#b2bleadgen
  20. 20. “Cheap” leads cost a lot of money Annual cost Hourly cost Loaded cost/ Field sales rep $ (200,000) $ (102) Leads Hours Cost/Hour 100 New leads 100 40 $ (4,082) 70 Valid leads 70 34 $ (3,469) Sales-ready leads 7 2.8 $ (286) 7 Assumes 1,960 hours per year and 19,600 dials. 20#b2bleadgen
  21. 21. Economics of demand gen:The cost-avoidance argument
  22. 22. What financial yardsticks exist in your company for measuring lead generation effectiveness? 22#b2bleadgen
  23. 23. Sales prospecting costs more than a CFO might expect • How much time do your sales people spend prospecting? • How much is that prospecting time costing your company? Source: CSO Insights “Sales Performance Optimization” report, 15th edition: over 1,800 companies surveyed. Copyright © 2009 CSO Insights. All Rights Reserved. 23#b2bleadgen
  24. 24. Sales prospecting cost ≥ Marketing budget? Sales prospecting scenario In this example at 20% of time spent on sales Revenue $ 1,000,000,000 prospecting, the entire Profit $ 100,000,000 marketing budget Marketing budget $ (50,000,000) equals the portion of the sales budget Sales budget $ (250,000,000) allocated to Other expenses $ (600,000,000) prospecting. Sales budget line item Time prospecting $ 1,000,000,000 Prospecting allocation $ 50,000,000 24#b2bleadgen
  25. 25. Sales prospecting equals a lot of FTEs Given that $50m budget allocation to sales prospecting from the prior slide, a $200k loaded cost/field resource is the equivalent of 250 sales people. Annual cost Sales budget $ (50,000,000) Loaded cost/field sales rep $ (200,000) Sales FTEs 250 ($50m sales budget allocation) / ($200k/rep) = 250 reps 25#b2bleadgen
  26. 26. Economics of demand gen:The revenue capacity argument
  27. 27. What revenue capacity can lead generation unleash? 27#b2bleadgen
  28. 28. Sales & Marketing Resource Allocation & the Buying Cycle Lead generation scales sales 100% These reallocated sales resources As much as possible, replace result in Less these sales resources with lower- increased efficient cost methods of marketing & revenue sales Allocated telemarketing contact capacity/higher resources percent of sales productivity sales More resources efficient sales resources 0% Prospecting Nurturing Selling Buying cycle stages 28#b2bleadgen
  29. 29. Sales-ready leads increase revenue capacity, profits and growth • 10% more selling time Sales prospecting Scalable lead gen • $10m increase in scenario scenario marketing budget Revenue $ 1,000,000,000 $ 1,100,000,000 Profit $ 100,000,000 $ 190,000,000 Marketing budget $ (50,000,000) $ (60,000,000) Sales budget $ (250,000,000) $ (250,000,000) Other expenses $ (600,000,000) $(600,000,000) Sales budget line item Time prospecting 20% 10% Prospecting allocation $ (50,000,000) $ (25,000,000) 29#b2bleadgen
  30. 30. Economics of demand gen:Key pipeline metrics for forecasting and analysis
  31. 31. What funnel metrics can improve sales and marketing planning, forecasting and efficiency? 31#b2bleadgen
  32. 32. For the first time in the seven years of this report, a slim majority (51%) of responding firms now track the ROI of their marketing campaigns. Source: CSO Insights “2010 Lead Generation Optimization” report. Copyright © 2010 CSO Insights. All Rights Reserved. 32#b2bleadgen
  33. 33. Measuring discrete funnel stages improves forecasting and operational efficiency New leads • Complex sales make Registered leads forecasting, analysis and funnel-tuning Rules-validated leads difficult Buying cycle Phone-ready leads • Discrete funnel conversion stages Phone-validated leads improve forecasting Sales-ready leads accuracy and narrow 75% problem identification to Sales-validated leads 95% • Feedback loops can Sales-forecasted opportunities improve upstream and downstream stages. Sales outcomes Copyright © MECLABS 2010, all rights reserved. 33#b2bleadgen
  34. 34. Key takeaways
  35. 35. Key takeaways • Lead quality concerns are driving initiatives in lead nurturing and lead scoring, which both are driving numerous marketing changes • Sales prospecting offers marketers a financial yardstick for measuring lead generation effectiveness • The cost avoidance argument: • Sales qualification is very expensive • Sales prospecting is very expensive 35#b2bleadgen
  36. 36. Key takeaways • The revenue capacity argument: lead generation can improve the sales and marketing expense-to-revenue ratio (sales scalability and sales productivity) • The right metrics can improve forecasting and drive continuous funnel improvement 36#b2bleadgen
  37. 37. Contact information Dave Green Director of Best Practices, MECLABS Co-Author of The B2B Refinery® en & Gre ylor vid dave.green@meclabs.com J. Da ael C. S h a Mi c 409-770-0710 MECLABS.com ∙ MarketingExperiments.com MarketingSherpa.com ∙ StartWithaLead.com StartWithaLead.com/LinkedIn 37#b2bleadgen

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