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Lead Process + Six Sigma = Increase in marketing Productivity

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Lead Process + Six Sigma = Increase in marketing Productivity

  1. 1. Lead Process + Six Sigma= Increase in Marketing Productivity John M. Coe Sales & Marketing Institute A. Charles Clark + Impact, LLC
  2. 2. The Sales & Marketing Institute <ul><li>Develop and deliver content on B2B sales and marketing </li></ul><ul><ul><li>Consulting </li></ul></ul><ul><ul><li>Education/training </li></ul></ul><ul><ul><li>Publications </li></ul></ul><ul><ul><ul><li>“ The Fundamentals of Business-to-Business Sales & Marketing” from McGraw-Hill </li></ul></ul></ul><ul><ul><ul><li>White papers on web-site: B2BMarketing.com </li></ul></ul></ul><ul><li>I’ve been on both sides of the sales lead process </li></ul><ul><ul><li>15 years sales and sales management </li></ul></ul><ul><ul><li>20 years marketing communications </li></ul></ul>
  3. 3. + Impact, LLC <ul><li>6 Sigma implementations / marketing & sales effectiveness : </li></ul><ul><ul><li>Coaching & Consulting </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>3 Sigma for Sales / Marketing </li></ul></ul><ul><li>I too have been on both sides of the sales lead process </li></ul><ul><ul><li>6 years -- sales and marketing </li></ul></ul><ul><ul><li>13 years -- sales & marketing services – training, database design, call center mgt., inquiry fulfillment, web site development, advertising agency oversight, tech. documents </li></ul></ul><ul><ul><li>5 years – raw materials purchasing </li></ul></ul><ul><ul><li>3 years – Certified BB – sales, marketing, Cust service </li></ul></ul><ul><ul><ul><li>7 completed projects -- partner on 3 others </li></ul></ul></ul>
  4. 4. So What’s the Problem? <ul><li>B2B benchmarking studies show that for every 100 inquiries only 1-3 sales result – typical ratios: </li></ul><ul><ul><li>100 inquiries (from all sources) </li></ul></ul><ul><ul><li>10-15 qualified sales leads at best </li></ul></ul><ul><ul><li>1-3 sales </li></ul></ul><ul><li>Yet, 90% of marketing budgets are spent with the primary goal of “lead generation” – not a great result </li></ul><ul><li>Cost of sales lead is higher than recognized </li></ul><ul><ul><li>Average cost per inquiry is $200 </li></ul></ul><ul><ul><li>Average cost per lead is $2,000+ </li></ul></ul>
  5. 5. Management is hot on this trail <ul><li>In 2004 73% of Chief Marketing Officers said that business development (lead process) was their # 1 priority to tackle for 2005 </li></ul><ul><li>In 2005 Forrester Research surveyed B2B marketing executives on their top challenges </li></ul><ul><ul><li>56% reported “generating more leads” </li></ul></ul><ul><ul><li>52% reported “improving lead quality” </li></ul></ul><ul><li>Senior executives are demanding ROI/ROE measurement of marketing expenditures </li></ul>
  6. 6. How to improve lead results? <ul><li>Primary instinct of most marketers is to </li></ul><ul><ul><li>Develop additional and/or improve current demand generation campaigns </li></ul></ul><ul><ul><li>Fire the old agency – hire a new one </li></ul></ul><ul><li>But, the over-looked marketing problem is </li></ul><ul><ul><li>Improving the lead process to deliver more qualified leads from the current inquiries </li></ul></ul><ul><ul><li>Agencies don’t do this – you do! </li></ul></ul><ul><li>Therefore this session is about fixing the lead process first before jamming more inquiries into a broken system – a classic six-sigma application </li></ul>
  7. 7. <ul><li>What do you suppose CMO’s are suggesting for business development? </li></ul><ul><ul><li>Work smarter, not harder! </li></ul></ul><ul><ul><li>We need to target the audience better! </li></ul></ul><ul><ul><li>Switch spending to better lead tactics! </li></ul></ul><ul><ul><li>Sales needs to do a better job of follow-up! </li></ul></ul><ul><ul><li>Get on the agency to create better advertising! </li></ul></ul><ul><ul><li>Sales needs to do a better job of follow-up! </li></ul></ul><ul><ul><li>(_____[ insert your company’s favorite mgt.bromides ] ___) </li></ul></ul><ul><li>How do you change results without looking at the process that produces them? </li></ul>“fixing” the lead process 6 
  8. 8. “fixing” the lead process 6  <ul><li>Detail the defect – what, when, where, how many, how often. </li></ul><ul><li>Capture the voice of the customer / partner </li></ul><ul><li>Determine relationships Y = f (x 1 x 2 x 3 x x ) </li></ul><ul><li>Map the process – output standards – metrics </li></ul><ul><li>Identify process ownership, process operators, stakeholders & key internal partners. </li></ul><ul><li>Fix the root cause – the critical “Xs” </li></ul><ul><li>Institute improvement plans that sustain gains </li></ul>Establish a process mind-set!
  9. 9. The Goals of Our Session <ul><li>To detail the seven-step B2B sales lead process and the common mistakes that are made by companies that sub-optimize results </li></ul><ul><li>To suggest how six-sigma tools and methods can drive significant productivity improvements when used intelligently – when adapted to a people intensive world. People are not machines! </li></ul>
  10. 10. 1. Demand/Inquiry Generation <ul><li>Process </li></ul><ul><ul><li>A variety of marketing communication tactics are deployed to drive responses from a targeted audience. </li></ul></ul><ul><ul><li>Most common tactics include: </li></ul></ul><ul><ul><ul><li>Advertising – all media </li></ul></ul></ul><ul><ul><ul><li>Web based – all forms </li></ul></ul></ul><ul><ul><ul><li>Direct mail </li></ul></ul></ul><ul><ul><ul><li>Telemarketing </li></ul></ul></ul><ul><ul><ul><li>Trade shows </li></ul></ul></ul>
  11. 11. Traditional Measures <ul><li>Cost per thousand </li></ul><ul><ul><li>A measure to know so that different media within the same tactic (e.g. advertising) can be compared. </li></ul></ul><ul><ul><li>CPM is not a number to be reduced – just know it </li></ul></ul><ul><li>Response rate </li></ul><ul><ul><li>The percentage of inquiries received and is mostly driven by the “offer” – there are 3 basic types of offers </li></ul></ul><ul><li>Cost per inquiry </li></ul><ul><ul><li>The cost per response of each media </li></ul></ul>
  12. 12. Number of leads per 100 inquiries (a typical ratio) Tele- marketing Trade Show Mail or email PR Adv. Offer accepted Outbound media 5-10 3-5 2-3 1-2 For More Information 10-25 10-20 5-10 3-5 Soft offer “ free” 25-40 15-25 10-15 5-10 Information of value offer 50-70 30-50 20-30 10-20 Hard or closing offer
  13. 13. <ul><li>Process </li></ul><ul><ul><li>A variety of marketing communication tactics are deployed to drive responses from a targeted audience. </li></ul></ul><ul><ul><li>Most common tactics include: </li></ul></ul><ul><ul><ul><li>Advertising – all media </li></ul></ul></ul><ul><ul><ul><li>Web based – all forms </li></ul></ul></ul><ul><ul><ul><li>Direct mail </li></ul></ul></ul><ul><ul><ul><li>Telemarketing </li></ul></ul></ul><ul><ul><ul><li>Trade shows </li></ul></ul></ul>Demand generation 6  Process mapped? Standards linked to VOC? Clear ownership? Actionable metrics? Frequent reporting? Stakeholders / allies linked? Sigma level? Measurements by tactic? Measurements by audience? Variation declining? Trends tracked? reported? Confidence in data? Ratios / rankings / ratings?
  14. 14. 2. Response Handling <ul><li>Process </li></ul><ul><ul><li>The fulfillment to the request or offer made in the initial marketing communications </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>Speed of response </li></ul></ul><ul><ul><li>Accuracy of response </li></ul></ul>
  15. 15. Inquiry/Response Handling <ul><li>Frequently, this step is viewed as just a fulfillment process or cost and not important </li></ul><ul><li>Therefore, it’s often done poorly – 2002 study </li></ul><ul><ul><li>60.7% of all B2B inquiries went unanswered </li></ul></ul><ul><ul><li>Average of 10 days to respond </li></ul></ul><ul><li>If designed properly the response process “sets up” the ability to improve the entire lead system </li></ul><ul><ul><li>Points you in the right direction at the start </li></ul></ul><ul><ul><li>Tells the prospect that you’re “good” </li></ul></ul>
  16. 16. Discriminate Between Inquiries <ul><li>Develop a profile or “sweet spot” of the best potential leads </li></ul><ul><ul><li>Industry code – SIC or NAICS </li></ul></ul><ul><ul><li>Size of company – employee size/revenue </li></ul></ul><ul><ul><li>The profile can be drawn from a customer profiling process – frequently not done </li></ul></ul><ul><li>Match the inquiries to one of the large public databases, enhance with these two data points to determine if they hit the “sweet spot” </li></ul>
  17. 17. <ul><li>Frequently, this step is viewed as just a fulfillment process or cost and not important </li></ul><ul><li>Therefore, it’s often done poorly – 2002 study </li></ul><ul><ul><li>60.7% of all B2B inquiries went unanswered </li></ul></ul><ul><ul><li>Average of 10 days to respond </li></ul></ul><ul><li>If designed properly the response process “sets up” the ability to improve the entire lead system </li></ul><ul><ul><li>Points you in the right direction at the start </li></ul></ul><ul><ul><li>Tells the prospect that you’re “good” </li></ul></ul>Response Handling 6  I wonder how they treat orders? Where shall we start? Say what?
  18. 18. <ul><li>Frequently, this step is viewed as just a fulfillment process or cost and not important </li></ul><ul><li>Therefore, it’s often done poorly – 2002 study </li></ul><ul><ul><li>60.7% of all B2B inquiries went unanswered </li></ul></ul><ul><ul><li>Average of 10 days to respond </li></ul></ul><ul><li>If designed properly the response process “sets up” the ability to improve the entire lead system </li></ul><ul><ul><li>Points you in the right direction at the start </li></ul></ul><ul><ul><li>Tells the prospect that you’re “good” </li></ul></ul>Response Handling 6 
  19. 19. 3. Lead Qualification <ul><li>Process </li></ul><ul><ul><li>The qualification of the inquiry to see if it meets the pre-set criteria of a sales lead. </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>The number of leads qualified per inquires received </li></ul></ul><ul><ul><ul><li>Leads ready for sales </li></ul></ul></ul><ul><ul><ul><li>Leads that need development </li></ul></ul></ul><ul><ul><ul><li>Inquiries that are not qualified – mailing list </li></ul></ul></ul><ul><ul><ul><li>Inquiries that are not “on-target” - discard </li></ul></ul></ul><ul><ul><li>The scoring of the lead against the qualification criteria </li></ul></ul>
  20. 20. How can this be used? <ul><li>Allows for the discrimination of resources to follow up inquiries – do not chase all inquiries the same, as they are not all equal </li></ul><ul><li>The goal of the first process is to separate the inquiries into one of the following categories </li></ul><ul><li>Average breakdown for every 100 inquiries </li></ul><ul><ul><li>Leads today 10 - 15 </li></ul></ul><ul><ul><li>Leads tomorrow 20 - 40 </li></ul></ul><ul><ul><li>Not qualified 20 – 30 </li></ul></ul><ul><ul><li>Not interested 30 - 40 </li></ul></ul><ul><ul><li>Other (competition) 20 - 30 </li></ul></ul>
  21. 21. Common Criteria <ul><li>Qualified lead </li></ul><ul><ul><li>Need/problem that the product or service fits and/or solves </li></ul></ul><ul><ul><li>Budget/capacity to purchase (could depend on profile of best lead) </li></ul></ul><ul><ul><li>Authority level/involvement of the contact(s) needed for a purchase </li></ul></ul><ul><li>Sales opportunity </li></ul><ul><ul><li>Timing of the purchase that aligns with the sales staff’s window, plus the contact’s desire to move forward in their buying process </li></ul></ul>
  22. 22. Lead Qualification <ul><li>What defines a lead for your company? </li></ul><ul><ul><li>Do not ever call inquiries leads! </li></ul></ul><ul><li>The terms that must be defined and agreed to by all concerned – specifically sales </li></ul><ul><ul><li>Inquiry </li></ul></ul><ul><ul><li>Qualified lead </li></ul></ul><ul><ul><li>Sales opportunity </li></ul></ul><ul><li>Sales people are already jaded – they will say “most leads are crappy!” or “not worth the paper they are written upon” </li></ul>
  23. 23. Lead Accelerators <ul><li>If the inquiry arrives by mail or phone be sure to respond within 24-48 hours </li></ul><ul><ul><li>If possible, notify the inquirer by phone or email that the response is on the way </li></ul></ul><ul><li>If the inquiry arrives by e-mail respond in less than 4 hours or it will negatively effect brand image! </li></ul><ul><li>Always give the inquirer a reason to respond again and an individual to respond to (not the sales person) </li></ul>
  24. 24. <ul><li>pre-set criteria of a sales lead </li></ul><ul><li>Measures </li></ul><ul><li>scoring of the lead against the qualification criteria </li></ul><ul><li>not chase all inquiries the same, as they are not all equal </li></ul><ul><li>separate the inquiries by categories </li></ul><ul><li>Decision criteria – agree on definitions, weightings, etc. ahead of time – argue about the criteria and process, not the output of the tool. </li></ul><ul><li>The terms that must be defined and agreed to by all concerned – specifically sales </li></ul><ul><ul><li>Inquiry </li></ul></ul><ul><ul><li>Qualified lead </li></ul></ul><ul><ul><li>Sales opportunity </li></ul></ul><ul><li>Lead Accelerators </li></ul>Lead Qualification 6  Some key words & phrases mentioned.
  25. 25. <ul><li>pre-set criteria of a sales lead </li></ul><ul><li>Measures </li></ul><ul><li>scoring of the lead against the qualification criteria </li></ul><ul><li>not chase all inquiries the same, as they are not all equal </li></ul><ul><li>separate the inquiries by categories </li></ul>Lead Qualification 6  Decision Criteria Matrix Agree on definitions & weightings Argue about criteria and process, not about the output of the tool Budget Authority Need Timing Size Industry Qualification Criteria 9 10 9 7 9 10 Inquiry 1 6 9 3 6 9 1 304 Inquiry 2 9 1 9 9 9 6 376 Inquiry 3 3 9 9 6 1 6 309 Inquiry 4 1 9 9 6 9 3 333 Inquiry 5 9 9 6 9 9 1 379 Inquiry n th Qualification Criteria
  26. 26. 4. Lead Development <ul><li>Process </li></ul><ul><ul><li>A continual process that “works” the lead until it reaches the pre-set qualification criteria for a sales lead </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>The number of leads developed </li></ul></ul><ul><ul><li>The cost of the each “developed” lead </li></ul></ul>
  27. 27. Lead Development/Nurturing <ul><li>Two studies by Penton and Reed Business (Cahners) have shown that from 30-50% of all B2B inquiries bought the product or service they inquired about within an 18-24 month period from time of inquiry. </li></ul><ul><li>What is your conversion rate? </li></ul><ul><ul><li>The best seen is about 10% of inquiries to sales, and that was in a demand generation program that started with a very “hard offer”. </li></ul></ul>
  28. 28. Reasons for Low Conversion <ul><li>No lead process in place – inquiry distribution is not a lead process </li></ul><ul><li>Lead qualification is not rigorous enough to separate lower level or warm leads from “hot leads” or real sales opportunities – only sales opportunities should be sent to sales. They will not act or discard the rest. </li></ul><ul><li>Even if a lead is “qualified” on the score card, but lacks the “timing” criteria, sales will not likely follow up with dedication and convert it. </li></ul>
  29. 29. A Sales Perspective <ul><li>As a planning assumption, all sales people have been involved in “lead” systems where they have gotten unqualified leads – they are already highly skeptical and need proof to change their perception and behavior! </li></ul><ul><li>Any lead system must align with the sales compensation system. </li></ul><ul><li>On average sales people will use 10% of their time on leads – unforced and without any incentive </li></ul><ul><ul><li>At 3 calls per day this works out to 60 lead calls per year or 5 per month or about 1 per week! </li></ul></ul>
  30. 30. Lead Development <ul><li>First, be sure that a common and accepted definition exists between marketing and sales on what is a “sales opportunity”. </li></ul><ul><li>Once this definition has been reached, only pass “sales opportunities” to sales. Feedback systems will automatically improve if this is done. </li></ul><ul><li>Do not keep secret or hide from view those inquiries that have not been qualified and/or the leads that are still being worked on by marketing. </li></ul>
  31. 31. Lead Development <ul><li>Depending on the lead qualification criteria, those leads remaining to be “developed” do not meet the “cut level” in one or more of the criteria. </li></ul><ul><li>Quick review of BANT – Note: these classic lead criteria are not necessarily in the order of when the criteria can be assessed or is known by buyer. </li></ul><ul><ul><li>Budget </li></ul></ul><ul><ul><li>Authority </li></ul></ul><ul><ul><li>Need </li></ul></ul><ul><ul><li>Timing* </li></ul></ul>
  32. 32. Lead Development <ul><li>The job of marketing is to stay with the lead until it is a sales opportunity, and either move it along or know when the “lead” is now a sales opportunity. </li></ul><ul><ul><li>The buyer may move at their own pace and in this case you just need to be aware of when they are ready for a sales effort/call. </li></ul></ul><ul><li>This requires a dedicated and, at times, a complex process that is worthy of a dedicated staff/assigned responsibility and budget. </li></ul>
  33. 33. <ul><li>30-50% of all B2B inquiries bought the product or service they inquired about within an 18-24 month period from time of inquiry. </li></ul><ul><li>A continual process that “works” the lead until it reaches the pre-set qualification criteria for a sales lead – gets to the outcome? </li></ul><ul><li>conversion rate? </li></ul><ul><ul><li>The best I’ve seen is about 10% of inquiries separate the inquiries by categories Let’s hope that rate is considered “defective” </li></ul></ul><ul><li>Lead qualification is not rigorous enough Discipline is always a challenge! </li></ul><ul><li>lead system must align with the sales compensation system </li></ul><ul><li>common and accepted definition exists between marketing and sales on what is a “sales opportunity </li></ul><ul><li>marketing is to stay with the lead until it is a sales opportunity </li></ul>Lead Development 6  More key words & phrases mentioned.
  34. 34. <ul><li>30-50% of all B2B inquiries bought the product or service they inquired about within an 18-24 month period from time of inquiry. </li></ul><ul><li>A continual process that “works” the lead until it reaches the pre-set qualification criteria for a sales lead </li></ul><ul><li>conversion rate? </li></ul><ul><ul><li>The best I’ve seen is about 10% of inquiries separate the inquiries by categories </li></ul></ul><ul><li>Lead qualification is not rigorous enough </li></ul><ul><li>lead system must align with the sales compensation system </li></ul><ul><li>common and accepted definition exists between marketing and sales on what is a “sales opportunity </li></ul><ul><li>marketing is to stay with the lead until it is a sales opportunity </li></ul>Lead Development 6  <ul><li>Some Sigma truths that apply: </li></ul><ul><li>Process mind-set is vital to achieving “break-through” results from problem-solving efforts </li></ul><ul><li>Process discipline (rigor) is paramount to process outcomes meeting expectations. CHANGE MGT. plans can not be ignored or shorted. </li></ul><ul><li>Processes are not usually independent of the impact of other processes – look for interfaces and linkages – complete the total picture! Usually a process input is someone else’s process output– beware of losses in the “white space” between processes or procedural steps. </li></ul><ul><li>Who is the owner of the process? Who cares most about the output? </li></ul>
  35. 35. Lead Development 6 
  36. 36. 5. Hand-off to Sales <ul><li>Process </li></ul><ul><ul><li>Distributing the lead/sales opportunity to the sales force or distributor network </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>Number of sales opportunities actively engaged/accepted by sales </li></ul></ul><ul><ul><li>Number of days taken to engage </li></ul></ul><ul><ul><li>Prospect satisfaction with follow-up promised </li></ul></ul>
  37. 37. Hand-off to Sales 6  <ul><li>Process </li></ul><ul><ul><li>Distributing the lead/sales opportunity to the sales force or distributor network </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>Number of sales opportunities actively engaged or accepted by sales </li></ul></ul><ul><ul><li>Number of days taken to engage </li></ul></ul><ul><ul><li>Even though they may want more leads, the actual capacity and desire is less than represented </li></ul></ul>More key words & phrases mentioned.
  38. 38. Hand-off to Sales 6  <ul><li>Process </li></ul><ul><ul><li>Distributing the lead/sales opportunity to the sales force or distributor network </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>Number of sales opportunities actively engaged or accepted by sales Key metric? </li></ul></ul><ul><ul><li>Number of days taken to engage Another key metric? How do you measure it? When? Where? Who? </li></ul></ul><ul><ul><li>Even though they may want more leads, the actual capacity and desire is less than represented </li></ul></ul>Classic challenge of processes and hand-off points. Root cause? Why? Why? Why? Why? Why?
  39. 39. Hand-off to Sales 6 
  40. 40. 6. Sales Conversion & Feedback <ul><li>Process </li></ul><ul><ul><li>Sales calls/effort to convert the opportunity to a customer </li></ul></ul><ul><ul><li>Providing feedback to marketing on the result achieved </li></ul></ul><ul><li>Measure </li></ul><ul><ul><li>Speed and completeness of feedback </li></ul></ul><ul><ul><li>Revenue obtained – sale, yearly, LTV </li></ul></ul><ul><ul><li>Cost of the sale </li></ul></ul>
  41. 41. Obtaining Feedback From Sales <ul><li>Most comments from marketing people are as follows: </li></ul><ul><ul><li>“ We sent leads to sales and they disappeared into a </li></ul></ul><ul><ul><li>black hole !” </li></ul></ul><ul><li>Why is this the case? </li></ul><ul><ul><li>It almost always revolves around the issue that sales people do not see their benefit for providing feedback to marketing – no matter how easy the Internet or CRM systems have made it </li></ul></ul><ul><ul><li>Also, feedback systems can be perceived as “big brother” </li></ul></ul>
  42. 42. Some Benefits to Sales <ul><li>Improving the lead process </li></ul><ul><ul><li>Better campaign targeting and execution </li></ul></ul><ul><ul><li>Improved qualification process </li></ul></ul><ul><ul><li>Higher quality leads = more sales </li></ul></ul><ul><ul><li>More sales = higher compensation </li></ul></ul><ul><li>An improved lead process eliminates calls that are of low value and interest to sales </li></ul><ul><li>Reducing the cost of the lead process and/or increasing the ROI allows marketing to budget for other important sales related activities </li></ul>
  43. 43. What is Feedback? <ul><li>Must balance between too little and too much </li></ul><ul><ul><li>What are the key facts that are needed to improve the lead process? </li></ul></ul><ul><ul><ul><li>Targeting question – company and people </li></ul></ul></ul><ul><ul><ul><li>Offer acceptance and applicability </li></ul></ul></ul><ul><ul><ul><li>Stage of the buying process </li></ul></ul></ul><ul><ul><ul><li>Sales revenue obtained and future potential </li></ul></ul></ul><ul><ul><ul><li>Input section – ideas from sales </li></ul></ul></ul><ul><ul><li>Allow for sales to “hand-back” a lead for more development without penalty </li></ul></ul>
  44. 44. Process to Follow with Sales <ul><li>First, involve them in the setting of the lead qualification and sales opportunity development process – involvement equals buy-in </li></ul><ul><li>Find the benefits that resonate with them – do not stress how important it is to marketing unless the benefits to sales have been first established </li></ul><ul><ul><ul><li>Let them know how much a lead costs </li></ul></ul></ul><ul><li>Allow visibility to all the inquiries and leads – don’t hide anything from sales </li></ul>
  45. 45. Second Level Techniques <ul><li>Recognition </li></ul><ul><ul><li>Internally recognize those who are doing a good job on feedback </li></ul></ul><ul><ul><li>Do not publicly “dog-house” those sales people who do not provide feedback </li></ul></ul><ul><ul><li>Share sales success stories – show what feedback has done for the lead process and other sales people </li></ul></ul><ul><li>Reward </li></ul><ul><ul><li>Contests/rewards work to initiate a feedback program, but are not a long-term solution </li></ul></ul>
  46. 46. Distributors/Business Partners <ul><li>Feedback is much more difficult </li></ul><ul><ul><li>Use the same process of involvement </li></ul></ul><ul><ul><li>They view the prospect/customer as theirs and not yours – are they right? </li></ul></ul><ul><ul><li>Many OEM’s have misused feedback </li></ul></ul><ul><li>Third party data centers may be a option, but keep control of the original data on the lead </li></ul><ul><li>Legal issues </li></ul><ul><ul><li>The teeth to enforce feedback systems should be in the “primary area of responsibility” section of the agreements </li></ul></ul>
  47. 47. Conversion & Feedback 6  <ul><li>Process </li></ul><ul><ul><li>Sales calls/effort to convert the opportunity to a customer </li></ul></ul><ul><ul><li>Providing feedback to marketing on the result Sounds like the final steps of a process map. </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>Speed and completeness of feedback Standards & Metrics & reporting </li></ul></ul><ul><ul><li>Cost of the sale Measure, report, track AND then analyze </li></ul></ul><ul><ul><li>How many sales opportunities should be handed off to sales people at any one time? Standards for flow rates and what will fit through the smallest point of constraint. </li></ul></ul><ul><ul><li>sales people do not see their benefit for providing feedback to marketing </li></ul></ul><ul><ul><ul><li>Every change management plan– every control plan has to address this. People processes need this like machines need grease, oil & fuel. </li></ul></ul></ul><ul><li>Controls </li></ul><ul><ul><li>Some Benefits to Sales </li></ul></ul><ul><ul><li>What are the key facts that are needed to improve the lead process? </li></ul></ul><ul><ul><li>Process to Follow with Sales </li></ul></ul>More key words & phrases mentioned.
  48. 48. Conversion & Feedback 6  <ul><li>Process </li></ul><ul><ul><li>Sales calls/effort to convert the opportunity to a customer </li></ul></ul><ul><ul><li>Providing feedback to marketing on the result Sounds like the final steps of a process map. </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>Speed and completeness of feedback Standards & Metrics & reporting </li></ul></ul><ul><ul><li>Cost of the sale Measure, report, track AND then analyze </li></ul></ul><ul><ul><li>How many sales opportunities should be handed off to sales people at any one time? Standards for flow rates and what will fit through the smallest point of constraint. </li></ul></ul><ul><ul><li>sales people do not see their benefit for providing feedback to marketing </li></ul></ul><ul><ul><ul><li>Every change management plan– every control plan has to address this. People processes need this like machines need grease, oil & fuel. </li></ul></ul></ul><ul><li>Controls </li></ul><ul><ul><li>Some Benefits to Sales </li></ul></ul><ul><ul><li>What are the key facts that are needed to improve the lead process? </li></ul></ul><ul><ul><li>Process to Follow with Sales </li></ul></ul>By now we’re repeating the same basic message – disciplined and data-driven breakthrough thinking in areas of business where process mentality has been scarce will yield great results.
  49. 49. Conversion & Feedback 6 
  50. 50. 7. Measure and Adjust Campaigns <ul><li>Process </li></ul><ul><ul><li>Analysis of the entire lead process and the marketing campaign adjustments required to improve results </li></ul></ul><ul><li>Measures </li></ul><ul><ul><li>Return on expense/investment – E/R </li></ul></ul><ul><ul><ul><li>ROI is not really measured but is talked about </li></ul></ul></ul><ul><ul><li>Customer lifetime value created </li></ul></ul>
  51. 51. Measurement of the Lead Process <ul><li>To obtain credibility with management true results must be measured – not activities </li></ul><ul><li>The measurement ladder </li></ul><ul><ul><li>Activity measurements </li></ul></ul><ul><ul><li>Value measurements </li></ul></ul><ul><ul><li>Result measurements </li></ul></ul>
  52. 52. Four Activity Measurements <ul><li>1. Cost per thousand or CPM </li></ul><ul><ul><li>Just know it – don’t try to reduce it </li></ul></ul><ul><li>2. Response rate </li></ul><ul><ul><li>A common measure of direct marketing but a “false god” </li></ul></ul><ul><li>3. Cost per inquiry – average $200 </li></ul><ul><ul><li>A fairly good measure to compare the effectiveness of media </li></ul></ul><ul><li>4. Cost per lead – average $2000 </li></ul><ul><ul><li>Depends on the strictness of the lead qualification criteria and process to qualify </li></ul></ul>
  53. 53. Value Per Lead <ul><li>This is a new concept in measurement that attempts to place a value (not cost) on each lead </li></ul><ul><li>It is a measurement that bridges the gap between activity and result measurements </li></ul><ul><ul><li>Average B2B sales cycle is 8 months and management usually wants to know campaign results faster than that </li></ul></ul><ul><li>Requires a prior result or assumptions </li></ul><ul><ul><li>% of leads converted to sale – 20% is average </li></ul></ul><ul><ul><li>$ value of the sale - yearly or lifetime </li></ul></ul>
  54. 54. Which Would You Rather Report? <ul><li>Cost per lead of $2,000 </li></ul><ul><ul><ul><ul><ul><li>OR </li></ul></ul></ul></ul></ul><ul><li>Value per lead of $20,000 </li></ul><ul><ul><li>Customer value of $100,000 (Year or LTV) </li></ul></ul><ul><ul><li>Conversion rate of 20% or 20 sales from every 100 leads </li></ul></ul><ul><ul><li>Total customer value generated is $2,000,000 </li></ul></ul><ul><ul><li>100 leads divided into $2 million = $20,000/lead </li></ul></ul>
  55. 55. Three Result Measurements <ul><li>1. Breakeven </li></ul><ul><ul><li>How many sales are required to pay for the campaign expense is the “breakeven” </li></ul></ul><ul><ul><li>Benchmarks the campaign cost before execution and provides insight into the appropriate budget level </li></ul></ul><ul><ul><li>Requires a definition and agreement on what is the margin of the sale </li></ul></ul><ul><ul><ul><li>Gross margin - usually around 50% </li></ul></ul></ul><ul><ul><ul><li>Net margin – 10-20% </li></ul></ul></ul>
  56. 56. Three Result Measurements <ul><li>2. Expense to Revenue or E/R </li></ul><ul><ul><li>Is a place holder for ROI, as this is almost never truly measured properly in accounting terms </li></ul></ul><ul><ul><li>Measures the ratio of the total campaign expense to the total gross revenue achieved </li></ul></ul><ul><ul><ul><li>1/10 is a minimum </li></ul></ul></ul><ul><ul><ul><li>1/20 is good </li></ul></ul></ul>
  57. 57. Three Result Measurements <ul><li>3. Lifetime value of the customer </li></ul><ul><ul><li>Should be measured in margin dollars </li></ul></ul><ul><ul><li>Is usually a large number and can be very helpful in B2B, but is not often calculated </li></ul></ul><ul><ul><li>How long is a lifetime? (three years) </li></ul></ul><ul><ul><li>Needs to include all on-going sales and service costs </li></ul></ul><ul><ul><li>Recommend Fredrick Reichheld’s book on The Loyalty Effect </li></ul></ul><ul><ul><ul><li>Justifies spending more money to keep customers </li></ul></ul></ul>
  58. 58. Conversion & Feedback 6  Right metrics? Represent VOC adequately? Available, accessible, reported? Management will use? Change will result? Sustainable? What about process metrics?
  59. 59. General Summary 6  Demand Response Qualify Develop Hand-off Convert + Measure Remember Big picture Watch the “white” space Data for decisions. Discipline of process Sustain the gains!
  60. 60. Summary from 1 Sales BB <ul><li>Take time – define the defect well. </li></ul><ul><li>Data is scarce </li></ul><ul><li>Processes are usually ill-defined </li></ul><ul><li>Process ownership is a fleeting concept </li></ul><ul><li>Process standards and CTQ’s not specific </li></ul><ul><li>Process metrics may not be linked to process outputs </li></ul><ul><li>Stakeholder expectations vary greatly </li></ul><ul><li>Root causes can be elusive </li></ul><ul><li>Humans are not machines = Change mgt. is tough! </li></ul>
  61. 61. Applying Six Sigma <ul><li>The purpose of 6  is to a c c e l e r a t e implementation of business strategies. </li></ul>
  62. 62. Applying Six Sigma <ul><li>Our purpose today is to a c c e l e r a t e adoption of 6  as key to aligning lead processes with business strategies. </li></ul>
  63. 63. Applying Six Sigma <ul><li>Think about it! </li></ul>

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