The Future of Lead Management

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Whitepaper
Changing Expectations:
The Future of Lead Management

A Step by Step Guide
Lisa Cramer
Co-Founder & President
LeadLife Solutions
lcramer@leadlife.com
770.670.6702
www.leadlife.com

Changing Expectations: The
Future of Lead Management Brawn
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Table of Contents
The legacy lead management process and its effects on business.........................................3

Marketing effectiveness..................................................................................................4

Sales effectiveness.........................................................................................................5

The costly buying shift.............................................................................................................6

Marketing shift................................................................................................................6

Sales shift.......................................................................................................................8

How to start..............................................................................................................................9

Changing 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

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The legacy lead management process and its effects on business
There are obviously many processes within any given business, some running more efficiently than others. The reality is that
most processes are not formally structured ahead of time; rather they often develop as businesses mature over time. In many
areas of business, processes have been studied, re-engineered and re-implemented to maximize operations. This is most
commonly found in areas such as inventory control and accounting.
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However, in many businesses today, the marketing to sales process - or
more specifically the lead management process - is ignored, even though
it is highly ineffective and extremely costly.

When we refer to the lead management process we really are describing Inquiries/Suspects
the process that occurs from the initial attempt to generate a lead to the
time that lead results in revenue attainment. This process spans the top Conversions
of the funnel where inquiries and suspects pour in and are then nurtured
into opportunities and closed sales. What’s quite interesting is that even
though this process directly affects revenue as much, if not more, than Sales Ready Leads
actually hiring more sales reps, it usually has not had a thorough
assessment of its efficiency or effectiveness.
Qualified
Most often the marketing and sales disciplines span multiple Opportunities
departments. Therefore the elements of lead management within each
discipline may be efficient, but the entire process which spans both
departments is not. And when you look at the amount of money spent on Closed
lead generation (and really all demand generation) and the money spent Sales
on maximizing the sales team’s effectiveness, it’s incredible that this
hasn’t bubbled up to the top of every CEO’s agenda.
Sales
Understandably up to now, companies have concentrated their efforts
strictly within the sales discipline, focusing on the sales process, team
and 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 are
enough. With the buyer shift that has occurred (described in more detail below), the very beginning of sales – marketing – must
also 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


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Marketing Effectiveness
Marketing 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 ROI
When budgets are allocated and specific dollars are spent on lead of their initiatives."
generation efforts, it’s important to understand what determines the - CMO Council
success of those lead generation efforts. How do you know whether
lead generation dollars were used most effectively for your company’s
growth?

In a vast majority of companies, we have found a truly antiquated approach. They either have no documented way of
understanding whether their lead generation budget was used most effectively to help grow the company, or they are still
using old metrics that don’t really account for the end result of revenue or even “sales ready” leads. They no longer are
enough 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 their
initiatives. 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 on
each email. These were the only digital metrics that could be tracked to determine interest and engagement. Additionally, when
marketing 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 that
it’s not enough to simply assume these metrics (opens and clicks) or actions determine interest. These days, buyers are doing
a 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 do
companies engage those prospects until they are ready to buy? They need
to nurture those leads. The concept of nurturing is still new in most
companies with the vast majority of nurturing still being done by the sales “64% of Sales and Marketing
team. executives are unhappy with
results derived from their
As 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 Sherpa
And Marketing Sherpa research found that 64% of Sales and Marketing
executives were unhappy with the results derived from their nurturing
programs.

Successful lead nurturing is not about sending emails out to everyone who filled in a form off your website or interacted with
your company. Nurturing is about sending relevant content to your prospect based on who they are (title, industry, etc), what
their interest is (based on digital behavior from your website, such as time spent on a webpage) and what phase they might be
in 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 qualified
leads and more revenue. But no matter how mature your marketing department is at this stage, nurturing is critical for marketers
who want to start maximizing lead generation budgets.


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Sales Effectiveness
When you understand the money spent in the sales department and its associated return, it becomes easier to see why
companies 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 CRM
systems, sales methodologies and more. However, there are two areas that we will focus on which greatly impact the
effectiveness 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 Insights
Sales Performance Optimization Report, sales teams spend 20 percent of
their time generating leads. That means that instead of focusing on moving “Only 4-7 raw leads per 100
qualified 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 - MecLabs
cold calls to untouched leads, researching possible contacts and much more.
Although none of those activities are bad, we are suggesting that the return
on those items are significantly lower if a high priced sales person is spending
that 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 shown
interest in the company’s products or services. For example, leads who have attended an event, clicked on an email or spent
time on “important” pages on the company website. It would behoove the company if this lead generation and “warming” could
occur within the marketing department (as well as with some other group such as inside sales), before the leads were sent to
sales. 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 could
make 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


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The Costly Buying Shift
So you are probably asking yourself: Is this new? Why all of the sudden is this something that needs a close look? Could
your 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 to
mention incredibly costly. With the internet, buyers are now in control of the sales cycle, or more aptly, the buy cycle. They
are equipped with the information, comparisons, reputations and more before they are interested in engaging a sales person
for 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 the
economy, resources are scarce, evaluations are taking longer (also fueled by more information available via the Internet), more
people are involved in decisions and CEOs, CFOs, and COOs are actively involved as financial purse strings are no longer
disseminated down. So in the end there is even more work to sell a prospect than ever before, putting a greater burden on a
sales person and their skills.

The Marketing and Sales Shift

The next section of this paper will outline how to shift your marketing and sales process to meet the needs of the buyer, thereby
increasing marketing and sales effectiveness. Of course if you are happy with your current sales productivity numbers, your
revenue per employee, revenue per sales rep ratios and marketing ROI, then I would suggest that a shift need not occur. But for
the rest of us, a shift needs to occur to drive more net revenue.

The Marketing Shift
Marketing really must change their approach and mindset. No longer is simple lead generation enough, where inquiries and
suspects 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 certainly
missing 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 Sherpa
study conducted in October 2010 showed that 78% of marketers listed
generating high quality leads as their top challenge. And in a 2011 Marketing “80% of marketers said they
Sherpa study, 80% of marketers said they pass unqualified leads to sales. pass unqualified leads to sales."
- Marketing Sherpa
How can marketing shift their approach to drive more qualified leads to
sales, 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.


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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 is
about relevant contact. Relevance is based on what each prospect finds interesting. So, again with technology and a strategic
process, marketers now can track digitally what leads are interested in, how often leads engage and when they are ready to
move to sales. These same technologies allow businesses to set up business rules specific to their sales cycle, their products
and their services, to automatically send leads to the sales team in real time, when appropriate. Additionally, the wealth of
additional 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 in
the sales cycle. They didn’t die (i.e. weren’t lost to competition) and they didn’t become opportunities on the forecast. These
leads are considered to be “leaking” out of the pipeline. This leakage costs you money. Therefore a process and supporting
technology must be established for these leads to be pushed back into marketing for additional nurturing and evaluation to see
if 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.


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With all the tools available today, CEOs should expect marketing to provide an ROI for lead generation dollars received. They
should expect marketing to understand the pipeline (particularly at the top of the funnel), and understand the changes that need
to take place (from a marketing perspective) to make the numbers happen. Obviously there are components that need to mesh
with sales. In these components of the lead process, both marketing and sales will need to work hand in hand to outline an
effective process for the organization. A few examples of these components are: definition of when a lead is “sales ready”, the
process for sending leads back to marketing for further nurturing and the process for re-promoting these leads back over to
sales.

The Sales Shift
Adapting to the buyer shift – Sales people need to adapt their style, sales process and knowledge to this new buyer shift. As
described above, with the Internet providing so much valuable information to the buyer, often anonymously, the leverage has
now shifted in the sales cycle. The buyer comes to sales when they decide they’re ready. The buyer now has researched and
created their own foundation of need, value, options, etc. So, when the buyer approaches sales they have the preconceived
notion 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 traditional
feature/function pitch probably will not do. Sales must adapt to understanding what the buyer has shown interest in (often via
their digital behavior), understanding how to use that information/intelligence when making the outbound call and utilizing that
knowledge 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 be
much 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 where
needed. 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 if
marketing “holds” inquiries and suspects that aren’t “sales ready” for further nurturing before putting them into the sales person’s
queue. Sales management will have to adapt to measurements beyond number of calls (especially if that metric is not qualified
by 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 cycles
were longer than the previous year. More people are involved in decisions and the C-suite is closely guarding the purse strings
for even seemingly small monthly payments. More time and effort will need to be applied by the sales person to continue to
stay engaged with opportunities, helping to move them through the sales cycle. This will give them even less time to engage
with colder leads than ever before.

Latent opportunities – As marketing starts working the nurturing process,
sales teams will start receiving opportunities that have gone through the
early part of the funnel. These opportunities could actually close quicker
than previous leads because they have been effectively nurtured and
moved through a number of stages of the pipeline – without even engaging
sales.

However, it is up to the sales person to understand and take advantage of
the new digital tracking and sales intelligence that is now part of the lead
record when they receive it in the CRM system. Associated with each lead
and/or opportunity, that now flows from marketing, should be information
about what that lead is interested in. There should be information about
what pages they viewed, what content they downloaded, what events they attended, what emails they engaged with and much
more. That can all be used by the sales person as fodder for the outbound phone call to engage prospects. Additionally the
sales 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.


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How To Start
It’s not the objective of this whitepaper to walk through the definition of revising your lead management process. However, you
do need to know that it’s do-able without completely disrupting your current processes or changing the entire culture of the
organization. The most important criterion is to start small. Mapping out a strategy is essential, understanding what makes
sense for your company is key, but work to implement these changes in phases. We all must deal with the reality of existing
resources 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, iterate
until you get to your desired results and more on. There are organizations that can help guide you on this path and make it
easier for you to do this effectively without potentially wasting time and resources trying to figure it out yourself.

Steps for Implementation
Part of the success will be your ability to take small, digestible chunks of a new process and implement them. Below are some
specific items to consider.

Set Realistic Goals
The first step is to define some goals - short-term, mid-term and long-term. This way you’ll have some measuring stick to use as
you progress. Short-term goals can be as simple as increasing click thrus or conversions of better targeted email campaigns. Or
they could include implementing a nurturing component on an existing campaign and see what effect it has on quality of
outbound 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 sometimes
that’s not going to happen. If not, don’t worry, you can implement marketing automation in phases. You can continue to send all
the leads you do today to sales but with additional sales intelligence, alerts and other items that provide more information for
warmer calls. Then as time progresses and you get sales buy-in, you can start sending only “sales ready” leads to sales.

Identify Initial Campaign
It’s important to evaluate where to start. Where can you get some immediate value without consuming the entire marketing
department or missing current planned activities? We have found this decision to be very company specific. It depends on what
you are currently doing, and what you can facilitate moving forward. Some companies simply start by better segmenting and
targeting their prospects with their e-newsletter. Some companies implement an approach to track and nurture in-bound leads
from their AdWord campaigns. It’s important to keep it simple, yet focus on a benefit you can realistically achieve.

Lead to Sales Process Considerations
How 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 companies
choose to implement basic scoring and only move those leads to sales that meet a basic set of criteria. The important factor is to
start simple, measure and adjust.

Metrics Now and Later
Upgrade your thinking about analytics and visibility to what’s working and what’s not. Now you can track not just opens and
clicks 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 require
some planning and process to make them work. But don’t feel that you need to reorganize your entire organization to gain some
initial value. Plan and implement in small phases and over time, there’s no question, you’ll start seeing the inherent benefits.


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Changing Expectations
It 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 can
help ignite new business initiatives that drive revenue. And in the end full visibility and accountability should be applied. The
following 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.


The Future of Lead Management

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