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The Future of Lead Management

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  • 1. Marketing Automation Technology Powered by Lead Management Specialists Brawn + BrainsWhitepaper Changing Expectations: The Future of Lead ManagementA Step by Step GuideLisa CramerCo-Founder & PresidentLeadLife Solutionslcramer@leadlife.com770.670.6702www.leadlife.com
  • 2. Changing Expectations: The Future of Lead Management Brawn + BrainsTable of ContentsThe legacy lead management process and its effects on business.........................................3 Marketing effectiveness..................................................................................................4 Sales effectiveness.........................................................................................................5The costly buying shift.............................................................................................................6 Marketing shift................................................................................................................6 Sales shift.......................................................................................................................8How to start..............................................................................................................................9Changing expectations.......................................................................... ................................10 Drive additional revenue................................................................................................10 Reduce sales costs.......................................................................................................10 ROI of lead generation dollars.......................................................................................10 www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 2
  • 3. Changing Expectations: The Future of Lead Management Brawn + BrainsThe legacy lead management process and its effects on businessThere are obviously many processes within any given business, some running more efficiently than others. The reality is thatmost processes are not formally structured ahead of time; rather they often develop as businesses mature over time. In manyareas of business, processes have been studied, re-engineered and re-implemented to maximize operations. This is mostcommonly found in areas such as inventory control and accounting. Email | Adwords | Banners | Webinars | Offline EventsHowever, in many businesses today, the marketing to sales process - ormore specifically the lead management process - is ignored, even thoughit is highly ineffective and extremely costly.When we refer to the lead management process we really are describing Inquiries/Suspectsthe process that occurs from the initial attempt to generate a lead to thetime that lead results in revenue attainment. This process spans the top Conversionsof the funnel where inquiries and suspects pour in and are then nurturedinto opportunities and closed sales. What’s quite interesting is that eventhough this process directly affects revenue as much, if not more, than Sales Ready Leadsactually hiring more sales reps, it usually has not had a thoroughassessment of its efficiency or effectiveness. QualifiedMost often the marketing and sales disciplines span multiple Opportunitiesdepartments. Therefore the elements of lead management within eachdiscipline may be efficient, but the entire process which spans bothdepartments is not. And when you look at the amount of money spent on Closedlead generation (and really all demand generation) and the money spent Saleson maximizing the sales team’s effectiveness, it’s incredible that thishasn’t bubbled up to the top of every CEO’s agenda. SalesUnderstandably up to now, companies have concentrated their effortsstrictly within the sales discipline, focusing on the sales process, teamand methodology, which are all critical to overall sales success.While optimizing these components for your business are indeed crucial to high performing sales teams, they no longer areenough. With the buyer shift that has occurred (described in more detail below), the very beginning of sales – marketing – mustalso shift. In essence, the entire lead generation to revenue process also must shift.Why?What’s so ineffective with your current legacy process? This costly process has two main components which we will address: o Marketing Effectiveness o Sales Effectiveness www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 3
  • 4. Changing Expectations: The Future of Lead Management Brawn + BrainsMarketing EffectivenessMarketing effectiveness has many components within it, some of which we won’t address in this paper.What we will address are the following items: o The ability to track and receive an ROI for lead generation dollars spent, o The ability to track metrics that are of value to the business; and o The need for marketing to take responsibility for lead nurturing “68% of marketers were unable to determine the ROIWhen budgets are allocated and specific dollars are spent on lead of their initiatives."generation efforts, it’s important to understand what determines the - CMO Councilsuccess of those lead generation efforts. How do you know whetherlead generation dollars were used most effectively for your company’sgrowth?In a vast majority of companies, we have found a truly antiquated approach. They either have no documented way ofunderstanding whether their lead generation budget was used most effectively to help grow the company, or they are stillusing old metrics that don’t really account for the end result of revenue or even “sales ready” leads. They no longer areenough to determine lead generation success in today’s market.In fact, a study conducted by the CMO Council found that 68% of marketers were unable to determine the ROI of theirinitiatives. How can a business apply money to initiatives where you can’t determine ROI?Back when email marketing first appeared on the scene it was enlightening just to understand who opened and who clicked oneach email. These were the only digital metrics that could be tracked to determine interest and engagement. Additionally, whenmarketing started to drive traffic to websites and we were able to get inquiries to fill in a form to receive something of value(maybe a whitepaper), it was felt that signified real interest.Well as information on the internet significantly expanded, buyers started spending more time online. It became apparent thatit’s not enough to simply assume these metrics (opens and clicks) or actions determine interest. These days, buyers are doinga significant amount of online research and are reaching their own decisions based on the information they find on the Internet.Additionally, salespeople are getting involved much later in the sales cycle, putting more pressure on your online presence(website), on your marketing efforts, on your content and on your sales team than ever before.If sales people are getting involved later in the process, then how docompanies engage those prospects until they are ready to buy? They needto nurture those leads. The concept of nurturing is still new in mostcompanies with the vast majority of nurturing still being done by the sales “64% of Sales and Marketingteam. executives are unhappy with results derived from theirAs a matter of fact at a recent Sales 2.0 conference, it was stated that nurturing programs."72% of nurturing falls under the responsibility of the sales department. - Marketing SherpaAnd Marketing Sherpa research found that 64% of Sales and Marketingexecutives were unhappy with the results derived from their nurturingprograms.Successful lead nurturing is not about sending emails out to everyone who filled in a form off your website or interacted withyour company. Nurturing is about sending relevant content to your prospect based on who they are (title, industry, etc), whattheir interest is (based on digital behavior from your website, such as time spent on a webpage) and what phase they might bein the buy cycle (educational stage or evaluation stage).The above criterion is ideal for a nurturing campaign, but you have to start somewhere. The end goal is to drive more qualifiedleads and more revenue. But no matter how mature your marketing department is at this stage, nurturing is critical for marketerswho want to start maximizing lead generation budgets. www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 4
  • 5. Changing Expectations: The Future of Lead Management Brawn + BrainsSales EffectivenessWhen you understand the money spent in the sales department and its associated return, it becomes easier to see whycompanies struggle to make their numbers.Sales effectiveness also has many elements that we won’t address in this whitepaper, such as training, the use of CRMsystems, sales methodologies and more. However, there are two areas that we will focus on which greatly impact theeffectiveness of your sales teams. o First, the unnecessary time spent by sales reps generating and nurturing “leads” instead of selling. Sales teams are spending 20% of their time generating leads (CSO Insights). Additionally, as stated above, in most companies the task of nurturing falls on a sales rep’s shoulders. o Secondly, the lost revenue associated with sales reps spending time trying to cultivate low return inquiries and suspects versus high return leads could be substantial. According to MecLabs, only 4 – 7 raw leads per 100 are ready to buy. Now consider all the costs you’ve applied to your sales team and the waste having that expensive resource sift through all those leads just to get to that small number that might actually buy.Let’s break each one of these points down further. According to CSO InsightsSales Performance Optimization Report, sales teams spend 20 percent oftheir time generating leads. That means that instead of focusing on moving “Only 4-7 raw leads per 100qualified leads or Marketing Qualified or Sales Accepted leads (whatever your are ready to buy."definition is) through the buying stages to revenue, sales reps are making - MecLabscold calls to untouched leads, researching possible contacts and much more.Although none of those activities are bad, we are suggesting that the returnon those items are significantly lower if a high priced sales person is spendingthat much time doing them – instead of selling.Companies, and their bottom line, would be better served if sales teams could focus their efforts on leads that have showninterest in the company’s products or services. For example, leads who have attended an event, clicked on an email or spenttime on “important” pages on the company website. It would behoove the company if this lead generation and “warming” couldoccur within the marketing department (as well as with some other group such as inside sales), before the leads were sent tosales. Obviously sales teams need to feel confident that the leads from marketing can help them achieve their assigned quota.What would happen to revenue, and other critical financials such as revenue per rep, revenue per employee, etc., if we couldmake sales teams 20% more productive?Not sure how it’s affecting your company? Check out some of these stats: o According to a Gartner study on sales effectiveness, sales people spend fewer than 45% of their time actually selling. o According to CSO Insights Sales Performance Study, 2010, the majority of companies surveyed reported that their sales people are able to turn a lead into an initial sales discussion less than half the time. In order to drive the revenue needed, this early stage (initial sales discussion) of the funnel needs to have a higher conversion rate. Sales people need more times at bat, meaning they need more initial sales discussions with more leads. o On average, only 50% of sales reps are meeting their quotas, according to the 2010 Inside Sales Metrics and Compensation Report www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 5
  • 6. Changing Expectations: The Future of Lead Management Brawn + BrainsThe Costly Buying ShiftSo you are probably asking yourself: Is this new? Why all of the sudden is this something that needs a close look? Couldyour sales and marketing operations be that ineffective? Well the answer is now that the majority of buyers do their research,investigation, evaluation and more online, our approach to marketing and sales has become outdated, and therefore, ineffective.The legacy approach of a lead being generated by marketing and handed off for sales to call is no longer effective, and not tomention incredibly costly. With the internet, buyers are now in control of the sales cycle, or more aptly, the buy cycle. Theyare equipped with the information, comparisons, reputations and more before they are interested in engaging a sales personfor next steps. There are lots of ramifications to this buyer shift.Not only are your prospects in more control over the buy cycle, but decisions are also getting slower. With the state of theeconomy, resources are scarce, evaluations are taking longer (also fueled by more information available via the Internet), morepeople are involved in decisions and CEOs, CFOs, and COOs are actively involved as financial purse strings are no longerdisseminated down. So in the end there is even more work to sell a prospect than ever before, putting a greater burden on asales person and their skills.The Marketing and Sales ShiftThe next section of this paper will outline how to shift your marketing and sales process to meet the needs of the buyer, therebyincreasing marketing and sales effectiveness. Of course if you are happy with your current sales productivity numbers, yourrevenue per employee, revenue per sales rep ratios and marketing ROI, then I would suggest that a shift need not occur. But forthe rest of us, a shift needs to occur to drive more net revenue.The Marketing ShiftMarketing really must change their approach and mindset. No longer is simple lead generation enough, where inquiries andsuspects flow to sales teams. It’s not about the volume of inquiries and suspects – it’s about the volume of “sales ready” leads.If your marketing department/CMO is measured on the number of names that are in your lead database, you are certainlymissing the mark. Marketing should be measured on quality – leads that turn into sales, not just the volume of raw inquiries.Remember the numbers above – only 4 – 7 raw leads out of 100 are ready to buy.This is a known issue among marketers themselves. A Marketing Sherpastudy conducted in October 2010 showed that 78% of marketers listedgenerating high quality leads as their top challenge. And in a 2011 Marketing “80% of marketers said theySherpa study, 80% of marketers said they pass unqualified leads to sales. pass unqualified leads to sales." - Marketing SherpaHow can marketing shift their approach to drive more qualified leads tosales, versus the volume of inquiries and suspects sent today?There are 3 primary changes marketing must start embarking on: (1) Take a content-driven approach to marketing – It’s no longer enough to send out an offer and hope for the best – well at least not for complex sales, or any sale that is not transactional in nature. Marketing today is about providing value to the prospect, establishing credibility through Take A Content thought leadership, understanding where the prospect is in the buy cycle, sending content that Approach the prospect finds interesting, helping to move the prospect - when they are ready - through the To Marketing buy cycle…. oh and doing all this digitally with the same limited resources available today. Without getting into too much gory detail, the reality is that with the correct technology and strategy, marketers can absolutely do the above, maximizing their outbound and inbound marketing campaigns. Today, with the dearth of information available on the Internet, marketers must start understanding content marketing in order to keep up with the demands of their prospects. www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 6
  • 7. Changing Expectations: The Future of Lead Management Brawn + Brains Move Your Prospects through the Buy Cycle with Relevant Content Problem Information Brand Objections/ Purchase Segment Recognition Search Evaluation Obstacles Decision Webinars Pricing Industry Case Studies Testimonials Segment 1 stats/reports Whitepapers Datasheets Free demos How to get Blog started Webinars Pricing Industry Whitepapers Case Studies Testimonials Segment 2 stats/reports Blog Datasheets Free demos How to get started (2) Reach further into the funnel – Instead of sales either spending time trying to nurture early stage leads or trying to make outbound calls to inquiries and suspects who won’t take the call, task Reach Further marketing with reaching further into the funnel. Marketers should be handing off “sales ready” leads Into The Sales to sales. There are many names and methodologies for what this is (Marketing Qualified Lead, Funnel Sales Accepted Lead, etc.). Whatever you call it or whatever your process is, the reality is that marketing must start measuring the quality of their leads before promoting them off to sales.This definition of “sales ready” should be agreed upon by both marketing and sales – otherwise, it will be flawed from the start. Marketing can provide “sales ready” leads by taking responsibility for nurturing inquiries, suspects and unqualified leads until they are deemed ready.Effective nurturing must be built on that first change that marketing must engage in - content marketing. Effective nurturing isabout relevant contact. Relevance is based on what each prospect finds interesting. So, again with technology and a strategicprocess, marketers now can track digitally what leads are interested in, how often leads engage and when they are ready tomove to sales. These same technologies allow businesses to set up business rules specific to their sales cycle, their productsand their services, to automatically send leads to the sales team in real time, when appropriate. Additionally, the wealth ofadditional sales intelligence provided in the form of digital tracking (what pages a lead visits and for how long and over time)gives sales much more background on the lead’s true interests.Marketing should also be prepared to “rescue” leads that have been promoted to the sales team but haven’t gone anywhere inthe sales cycle. They didn’t die (i.e. weren’t lost to competition) and they didn’t become opportunities on the forecast. Theseleads are considered to be “leaking” out of the pipeline. This leakage costs you money. Therefore a process and supportingtechnology must be established for these leads to be pushed back into marketing for additional nurturing and evaluation to seeif they raise their hand again. (3) Be metrics driven – Marketing has not been traditionally driven off metrics, or should we say they haven’t been driven by the metrics that feed the bottom line of a company’s financials. The metrics that marketing has historically focused on are really about engagement. Simple opens and Become Metrics clicks on emails. Website activity is measured based on visitors, where they came from, where Driven they go, how long they spend. But putting together this anonymous activity with purchase intent, and ultimately sales, can now be done with the enhanced tracking available with Marketing Automation technology. Now marketers have the ability to see the volume of leads they generated per campaign, the quality of the leads, the number that turned into opportunities and the amount of revenue. These statistics can then be compared to the amount of money spent per lead generation campaign, finally giving the company visibility into the return on their marketing investment. www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 7
  • 8. Changing Expectations: The Future of Lead Management Brawn + BrainsWith all the tools available today, CEOs should expect marketing to provide an ROI for lead generation dollars received. Theyshould expect marketing to understand the pipeline (particularly at the top of the funnel), and understand the changes that needto take place (from a marketing perspective) to make the numbers happen. Obviously there are components that need to meshwith sales. In these components of the lead process, both marketing and sales will need to work hand in hand to outline aneffective process for the organization. A few examples of these components are: definition of when a lead is “sales ready”, theprocess for sending leads back to marketing for further nurturing and the process for re-promoting these leads back over tosales.The Sales ShiftAdapting to the buyer shift – Sales people need to adapt their style, sales process and knowledge to this new buyer shift. Asdescribed above, with the Internet providing so much valuable information to the buyer, often anonymously, the leverage hasnow shifted in the sales cycle. The buyer comes to sales when they decide they’re ready. The buyer now has researched andcreated their own foundation of need, value, options, etc. So, when the buyer approaches sales they have the preconceivednotion of what they need, why and what your company can provide.At this point, sales people need to be prepared and flexible in their approach to the buyer. Spewing the traditionalfeature/function pitch probably will not do. Sales must adapt to understanding what the buyer has shown interest in (often viatheir digital behavior), understanding how to use that information/intelligence when making the outbound call and utilizing thatknowledge to their advantage.Since sales people will be brought into the sales process later than they had been previously, they will most likely need to bemuch better prepared to answer tough questions. Today’s prospects will ask questions about how you compare to a competitor,ROI, business justifications, and much more. The sales person has to be more prepared to drive the conversation whereneeded. Because the reality is that your buyer is now much more prepared by the time they engage with the sales person.Sales people will also need to adapt to warmer, higher quality leads but potentially less of them. This is particularly true ifmarketing “holds” inquiries and suspects that aren’t “sales ready” for further nurturing before putting them into the sales person’squeue. Sales management will have to adapt to measurements beyond number of calls (especially if that metric is not qualifiedby quality prospects and it’s just a raw number).Lastly, sales cycles are extending. According to the 2010 B2B Sales Pulse Survey, 59% of respondents said their sales cycleswere longer than the previous year. More people are involved in decisions and the C-suite is closely guarding the purse stringsfor even seemingly small monthly payments. More time and effort will need to be applied by the sales person to continue tostay engaged with opportunities, helping to move them through the sales cycle. This will give them even less time to engagewith colder leads than ever before.Latent opportunities – As marketing starts working the nurturing process,sales teams will start receiving opportunities that have gone through theearly part of the funnel. These opportunities could actually close quickerthan previous leads because they have been effectively nurtured andmoved through a number of stages of the pipeline – without even engagingsales.However, it is up to the sales person to understand and take advantage ofthe new digital tracking and sales intelligence that is now part of the leadrecord when they receive it in the CRM system. Associated with each leadand/or opportunity, that now flows from marketing, should be informationabout what that lead is interested in. There should be information aboutwhat pages they viewed, what content they downloaded, what events they attended, what emails they engaged with and muchmore. That can all be used by the sales person as fodder for the outbound phone call to engage prospects. Additionally thesales person will be better prepared for questions or the later stage conversation that they have with the prospect. They’ll know(at least from their company’s marketing efforts) all the information the lead has read. www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 8
  • 9. Changing Expectations: The Future of Lead Management Brawn + BrainsHow To StartIt’s not the objective of this whitepaper to walk through the definition of revising your lead management process. However, youdo need to know that it’s do-able without completely disrupting your current processes or changing the entire culture of theorganization. The most important criterion is to start small. Mapping out a strategy is essential, understanding what makessense for your company is key, but work to implement these changes in phases. We all must deal with the reality of existingresources and limitations. Starting with a few critical components, you can make great strides towards the ultimate objectives.There are multiple strategies to start refining your lead management process for marketing, sales and the bridge between.Again, take it slowly. Maybe start with one department at a time, implement some of the phases, test the effectiveness, iterateuntil you get to your desired results and more on. There are organizations that can help guide you on this path and make iteasier for you to do this effectively without potentially wasting time and resources trying to figure it out yourself.Steps for ImplementationPart of the success will be your ability to take small, digestible chunks of a new process and implement them. Below are somespecific items to consider.Set Realistic GoalsThe first step is to define some goals - short-term, mid-term and long-term. This way you’ll have some measuring stick to use asyou progress. Short-term goals can be as simple as increasing click thrus or conversions of better targeted email campaigns. Orthey could include implementing a nurturing component on an existing campaign and see what effect it has on quality ofoutbound calls.Get Sales Buy In – Maybe…In theory, you’d want to make sure you have sales buy-in before starting your implementation, however, the reality is sometimesthat’s not going to happen. If not, don’t worry, you can implement marketing automation in phases. You can continue to send allthe leads you do today to sales but with additional sales intelligence, alerts and other items that provide more information forwarmer calls. Then as time progresses and you get sales buy-in, you can start sending only “sales ready” leads to sales.Identify Initial CampaignIt’s important to evaluate where to start. Where can you get some immediate value without consuming the entire marketingdepartment or missing current planned activities? We have found this decision to be very company specific. It depends on whatyou are currently doing, and what you can facilitate moving forward. Some companies simply start by better segmenting andtargeting their prospects with their e-newsletter. Some companies implement an approach to track and nurture in-bound leadsfrom their AdWord campaigns. It’s important to keep it simple, yet focus on a benefit you can realistically achieve.Lead to Sales Process ConsiderationsHow do you want leads to pass to sales – initially and over time - as you grow into your lead management process and system?Some companies choose to keep their process the same initially – for example – moving all leads to sales. Some companieschoose to implement basic scoring and only move those leads to sales that meet a basic set of criteria. The important factor is tostart simple, measure and adjust.Metrics Now and LaterUpgrade your thinking about analytics and visibility to what’s working and what’s not. Now you can track not just opens andclicks but ongoing behavior and marketing effectiveness. Maybe you start by tracking the increase in conversions by campaign.Later you start tracking the number of sales ready leads generated by campaign and revenue by campaign. You’ll need to test,measure and refine.Marketing automation systems aren’t a silver bullet. You can’t just implement them and hope they will work. They do requiresome planning and process to make them work. But don’t feel that you need to reorganize your entire organization to gain someinitial value. Plan and implement in small phases and over time, there’s no question, you’ll start seeing the inherent benefits. www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 9
  • 10. Changing Expectations: The Future of Lead Management Brawn + BrainsChanging ExpectationsIt is definitely time for CEOs to have different expectations from marketing and more specifically their lead management process.The reality of today’s business environment is that metrics should drive your entire lead management process. This process canhelp ignite new business initiatives that drive revenue. And in the end full visibility and accountability should be applied. Thefollowing are three expectations CEOs can have when revising their lead management process: Drive Additional Revenue Marketing can have a direct impact on revenue if they spend time and effort to implement a lead management process that drives better qualified leads to sales. This means that marketing needs Drive Additional to start accumulating data (tracking digital behavior and capturing lead information) about the Revenue prospect and driving interaction with the prospect. This gives marketers the ability to pass sales teams leads that have shown some level of interest in the products or services they offer. Marketing must also take on the responsibility to nurture leads who are not quite ready to buy. Instead of passing over inquiries and suspects straight from a website for sales teams to ignore or waste time with, marketers can nurture those unqualified prospects until they are ready to buy. Reduce Sales Costs Maximizing sales resources, or more specifically maximizing revenue per sales rep and revenue per employee, are two important metrics for any company. Marketing can directly help drive these numbers up by helping sales people focus their efforts on prospects that are most likely to buy, rather than spending their time calling inquiries and suspects that are either not qualified or not Reduce Sales Costs ready to talk to a salesperson. In today’s internet-driven society, most prospects gain some amount of information online without the “help” of a salesperson. With this digital behavior now available, marketers must take the responsibility of tracking those insights and interpreting them as best as possible to give prospects the information they need, when they need it. This digital behavior, coupled with additional data about the prospect, will help sales reps determine the best time to call these prospects. Additionally, sales teams will now have added intelligence available about the prospect when they make their outbound calls. This should make for a “warmer” call, helping to increase conversion rates and reduce time/costs that sales was wasting chasing unqualified prospects. ROI of Lead Generation Dollars CEOs (and CFOs) often view the marketing department as a cost center, rather than a revenue Generate ROI from Lead engine, because they can’t quantify a return on investment. Marketing needs to start gaining Generation Dollars visibility to additional metrics that go beyond traditional opens and clicks. They need to start tracking the number of qualified leads passed to sales and where those leads flow through the funnel into opportunities and sales. Marketers are often unable to gain that visibility due to a lack of systems and processes. Providing the technology (thereby visibility) and revising the lead management process should be a basic component of gaining ROI expectations. www.leadlife.com | 1.800.680.6292 | © Copyright 2012, LeadLife Solutions | 10