Secret Sauce for Revenue: A Practical Case Study
 

Secret Sauce for Revenue: A Practical Case Study

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: Marketo is one of the fastest-growing marketing automation software companies in the US, providing lead management resources that assist the sales and marketing teams in the lead management process. ...

: Marketo is one of the fastest-growing marketing automation software companies in the US, providing lead management resources that assist the sales and marketing teams in the lead management process. Shared marketing automation resources encourage sales and marketing alignment and ensure that all potential customers experience lead nurturing. Online content marketing resources draw in potential customers, who are seamlessly passed onto sales reps who turn these promising leads into revenue for your company.

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  • Results firstFor those of you not familiar with Marketo, we provide on-demand marketing automation & sales effectiveness solutions thatsignificantly increase corporations’ revenue performance. Over the last three years, we’ve signed up more than 900 mid-market and enterprise customers across a variety of industries including tech, healthcare, business services, manufacturing, finance, etc., which means that we’re currently growing faster than SuccessFactors, Omniture, or Netsuite did at the same point in their lifecycle.
  • What’s unique about us is how efficiently we are driving that growth. ExplainThis means our Sales and Marketing model is about 2X as productive as other SaaS companies…. The rest of this presentation is all about how.
  • The core philosophy of our revenue engine is that buying has changed forever, and that marketing and sales need to change as well.Not that long ago, there were few 3rd party sources of information, which meant that a buyer had to get most of their information from sales. In this world, it made perfect sense for marketing to pass all leads over to sales. But now, the explosion of readily available information means buyers get most of their information themselves and don’t want to talk to a sales person until they are much further along. 70% of the buying cycle has already taken place before buyers are willing to engage with a live sales person.With this change, marketing has the opportunity to seize the day and take a much larger share of revenue.
  • When marketing takes a larger share, you need to look at the REVENUE CYCLE, not just the Sales Cycle.Why Sales Cycle is good.Extend that to entire process.APPLY TO B2C as well…Names not leads.Engaged. Only 20% of prospects are ready to be leads, so we nurture.
  • When marketing takes a larger share, you need to look at the REVENUE CYCLE, not just the Sales Cycle.Why Sales Cycle is good.Extend that to entire process.APPLY TO B2C as well…Names not leads.Engaged. Only 20% of prospects are ready to be leads, so we nurture.
  • When marketing takes a larger share, you need to look at the REVENUE CYCLE, not just the Sales Cycle.Why Sales Cycle is good.Extend that to entire process.APPLY TO B2C as well…Names not leads.Engaged. Only 20% of prospects are ready to be leads, so we nurture.
  • When marketing takes a larger share, you need to look at the REVENUE CYCLE, not just the Sales Cycle.Why Sales Cycle is good.Extend that to entire process.APPLY TO B2C as well…Names not leads.Engaged. Only 20% of prospects are ready to be leads, so we nurture.
  • When marketing takes a larger share, you need to look at the REVENUE CYCLE, not just the Sales Cycle.Why Sales Cycle is good.Extend that to entire process.APPLY TO B2C as well…Names not leads.Engaged. Only 20% of prospects are ready to be leads, so we nurture.
  • When marketing takes a larger share, you need to look at the REVENUE CYCLE, not just the Sales Cycle.Why Sales Cycle is good.Extend that to entire process.APPLY TO B2C as well…Names not leads.Engaged. Only 20% of prospects are ready to be leads, so we nurture.
  • When marketing takes a larger share, you need to look at the REVENUE CYCLE, not just the Sales Cycle.Why Sales Cycle is good.Extend that to entire process.APPLY TO B2C as well…Names not leads.Engaged. Only 20% of prospects are ready to be leads, so we nurture.
  • See where our Prospects, and our Opps come from.Deals: 40% Inbound, 40% Paid; 10% Sales, 10% Referral.Paid Sources: Virtual Tradeshows good; PPC next (1.7X), Webinar (2.3X), online ad (2.5X). Tradeshow 3.5X. Content sucks. Really highlights the importance of content/inbound.In terms of PAID finding prospects, top sources… Tradeshows expensive, but drive opps. Two paths through Marketo – paid/nurture, and inbound.
  • What I want to focus on here is two models that you can use to calculate the ROI yourself. In the first, the key is to estimate
  • Total Mailed 41578 -Total Responded 1709 4.1%Total Demos 139 8.1%Opportunities 7151.1%Wins 19 -Total Mailed = 29,295Total Responded = 713 (2.4%)Total Demos = 90 (13%)Opportunities = 36 opps (40%)Wins = 16 customers
  • BCG – 2X2 matrix
  • 5. Model Flow through the Revenue StagesThe final analytical step in the process is to project everything forward by taking your existing and new leads and modeling how they will convert through the various revenue stages over time. Explain slideNote: 65% of all deals; heavy spend on marketingIf your understanding of conversion rates and inputs are accurate, you will create a solid projection of what the revenue funnel will deliver in future periods.

Secret Sauce for Revenue: A Practical Case Study Secret Sauce for Revenue: A Practical Case Study Presentation Transcript

  • Marketo Secret Sauce for Revenue: A Practical Case Study Jon Miller, VP Marketing and Co-Founder, Marketo Author of Modern B2B Marketing blog© 2011 Marketo, Inc.
  • Fastest Growing SaaS Company Salesforce SuccessFactors Omniture NetSuite Constant Contact Taleo Marketo Year 0 Year 1 Year 2 Year 3 Year 4 All revenue numbers normalized to Marketo Year 1Page 2© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Highly Efficient Revenue Engine • 90 cents in Marketing for every $1 in Sales • 80% of revenue directly sourced by marketing • $1.2M annual recurring revenue quota Productivity (1-year New Customer Bookings / $M+S ) 2.00 1.50 1.00 0.50 0.00 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11Page 3© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Buying Has Changed Forever OLD DAYS: INFO SCARCITY TODAY: INFO ABUNDANCE 1960s – Recent BUYER SALES REP SALES REPPage 4© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo’s Revenue Cycle MQL AWARENESS Prospect & SAL All Names Recycled Engaged SQL Sales Lead Lead Opportunity Customer Nurturing Database Marketing SDR SalesPage 5© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo’s Revenue Cycle MQL AWARENESS Prospect & SAL All Names Recycled Engaged SQL Sales Lead Lead Opportunity Customer Nurturing Database Names are just names. Marketing SDR SalesPage 6© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo’s Revenue Cycle MQL AWARENESS Prospect & SAL All Names Recycled Engaged SQL Sales Lead Lead Opportunity Customer Nurturing Database Meaningful interaction with us. Marketing SDR SalesPage 7© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo’s Revenue Cycle MQL AWARENESS Prospect & SAL All Names Recycled Engaged SQL Sales Lead Lead Opportunity Customer Nurturing Database Qualified, engaged potential buyers. Marketing SDR SalesPage 8© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo’s Revenue Cycle MQL AWARENESS Prospect & SAL All Names Recycled Engaged SQL Sales Lead Lead Opportunity Customer Nurturing Showing buying Database signs or significant engagement. Marketing SDR SalesPage 9© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo’s Revenue Cycle MQL AWARENESS Prospect & SAL All Names Recycled Engaged SQL Sales Lead Lead Opportunity Customer Nurturing Database Qualified as sales-ready by a human. Marketing SDR SalesPage 10© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo’s Revenue Cycle MQL AWARENESS Prospect & SAL All Names Recycled Engaged SQL Sales Lead Lead Opportunity Customer Nurturing Database Marketing SDR SalesPage 11© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Benefits of Content Marketing Risk Reduction SEO Social Scoring Popular Blogs Resource Center Definitive Guides Webinars Marketo TVPage 12© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Content: When To Ask For Registration Early Stage Thought leadership and best practices to build brand and awareness Middle Stage Buyers guides, RFP templates and industry information to help structure research Late Stage Company-specific information to help evaluate and reaffirm selectionPage 13© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Short Forms Outperform Long Forms Short (5 fields) Medium (7 fields) Long (9 fields) Conversion: 13.4% Conversion: 12.0% Conversion: 10.0% Cost per: $31.24 Cost per: $34.94 Cost per: $41.90Page 14© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Problems With Self-Submitted DataPage 15© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo Prospect Generation 2H2010 Source Prospects Cost % Lead Velocity Opp Index (Days) Lead to Trade Show – Virtual 3,793 $25.44 17% 81 1.0 3rd Party Email Blast 3,302 $34.65 18% 43 0.5 Trade Show 2,703 $221.30 23% 61 1.9 Paid Webinar 1,760 $68.50 21% 60 1.0 PPC 990 $158.10 45% 42 1.4 Content Syndication 536 $82.84 12% 59 0.3 Other Paid 208 $187.50 13% 93 1.3 Website 2,871 58% 27 2.6 Sales Prospecting 1,888 26% 46 2.2 Partner Co-Marketing 903 17% 102 1.1 AppExchange 353 78% 37 3.4 Referral 80 36% 12 1.0 Other Inbound 370 100% 19 9.0Page 16© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Why Lead Nurturing: Stay in Touch Building relationships with qualified prospects regardless of their timing to buy, with the goal of earning their business when they are ready. MQL Prospect & SAL All Names Recycled Engaged SQL Sales Lead Lead Lead Opportunity Nurturing “The art of maintaining permission to stay in front of your buyers as they educate themselves”Page 17© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • The Value of Lead Nurturing Marketo ROI Results Fast Leads Slow Leads Total Leads Cost / Lead ( MQL <1 mo) (MQL >1 mo) (MQL) (MQL) Without Nurturing 20% 6.67% 26.67% $206.00 With Nurturing 20% 20.0% 40.0% $137.50 Source: Actual Marketo data; assumes $55 per prospect Results: 50% more marketing qualified leads from lead nurturingPage 18© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Lead Nurturing Relevance 1. BUYING STAGES Stages 1 2 3 • Early (Pre-MQL) A • Mid (MQL) • Late (Opportunity) B • Customer C D 2. BUYING PROFILES • Industry: 82% • Role: 67% • Company Size: 49% • Geography: 29%Page 19© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Content - Don’t Panic! Stages 1 2 3 A 1. Short content is good! (YouTube) B 2. Reuse and repurpose 3. Stay ahead of the drip C Start small, think big and adapt quickly DPage 20© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Other Kinds of Lead Nurturing Accelerators • Move prospects faster with relevant “nudges” Recycled • Nurture based on what you find Reconstituted • AKA “Wake the Dead”Page 21© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • The ROI of Lead Scoring How Easy Is it To Get Information Other Benefits of Fewer About Prioritizing Sales Efforts? But Higher Quality Leads • Higher Win Rates • Shorter Sales Cycles • Higher Revenue Per Rep Source: CSO InsightsPage 22© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • A Framework for Lead Scoring Explicit Info Inferred Info What the prospect tells you What you observe or infer • Data quality Fit • Demographics • Corporate vs. personal Are you email • Firmographics interested • Inferred from IP • BANT in them? (geography, ISP domain) Interest • Latent behaviors Are they (engagement) • BANT interested • Active behaviors (sales in you? readiness)Page 23© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Interest Scoring - Examples • Early stage content +3 • Attend webinar: +5 • Visit any webpage / blog : +1 • Visit careers pages: -10 • Pricing pages: • +10 regular, +15 detailed • Watch demos: • +5 overview, +10 detailed • Mid-stage content +8 • Late-stage content +12 • Searches for “Marketo” +8Page 24© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Closed Loop Refinement: Top BehaviorsPage 25© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Identifying Marketing Qualified Leads Super- 21+ Target Lead Lead Lead 9-20 Target Lead Lead Fit 2-8 Other Lead <2 Engagement <20 20-44 45-89 90+ Interest Buying Intent <6 6-14 15-23 24+Page 26© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • The Marketing-Sales Handoff (SDRs) • Best place for dramatic improvements in business performance are handoffs between functions • Benefits of a Sales Development function • Faster, more consistent, & better quality follow-up on leads • Better economics • The human touch enhances lead nurturing • Better data and more metrics • Talent development for salesPage 27© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • No Lead Left Behind Day 0 Notification Day 1 If untouched, reminder Day 2 If untouched, reminder cc boss Day 3 If untouched, alert executives Day 7 If stale, reminder Day 8 If stale, reminder cc boss Day 9 If stale, alert executivesPage 28© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Sales InsightPage 29© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Measuring and Proving Marketing’s Impact onRevenue
  • Revenue Cycle ModelerPage 31© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Key topic areas: • Balance • Flow • Conversion • Velocity Trends over time Filter/Drill into data, e.g. by Program Type, Business Unit, Geography, etc.Page 32© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketo Revenue Cycle Metrics New Customers 80% of all deals ($5,800) follow this model Lead to Sales Lead: 7% Sales Lead to Opp: 80% Lead Type Opportunities 1.4 people per Opp 130 / mo Variants ($2,000) 1,000 Leads = 40 Opps Source 40% of prospects Channel Leads eventually become a lead Division 2,000 / mo ($137.50) Size 4.0% / mo 75% 9,500 / mo 20% Paid Active Prospect Names Prospects Database ($29.33) 3,800 / mo 40% ¾ paid ($73) Unpaid ¼ unpaid ($0) 80% Inactive Names ($55 average) 10% (Last 6 ($0) Months)Page 33© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Conversion and Speed By Type Prospect to LeadPage 34© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Conversion Over Time • Predict conversions from one stage to another over time • Create plans / forecasts about future Marginal Conversion Cumulative Conversion 70 2,000 1,800 60 1,600 50 y = 50.74x-0.57 1,400 R² = 0.430 y = 994.2x0.135 40 1,200 R² = 0.955 1,000 30 800 20 600 400 10 200 0 - 3 13 23 33 43 53 63 73 3 13 23 33 43 53 63 73Page 35© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Marketing ForecastsPage 36© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Key Takeaways 1. Grow revenue by making sales more productive, not just by hiring more reps 2. Focus on the entire revenue cycle, not just the top of the funnel 3. Don’t contact a lead before its time 4. No lead left behind / service level agreements 5. Use forecasting to turn marketing from a cost center into a revenue driverPage 37© 2011 Marketo, Inc. Marketo Proprietary and Confidential
  • Contact Me Marketo, Inc. JON MILLER 901 Mariners Island VP Marketing Suite 200 jon@marketo.com San Mateo, CA 94404 @jonmiller2 Direct: +1.650.376-2310 blog.marketo.com www.marketo.com Download the “Definitive Guide to Lead Nurturing” www.marketo.com/dg2-lead-nurturingPage 38© 2011 Marketo, Inc. Marketo Proprietary and Confidential