2011 Lead Generation
Trends and Challenges
J. David Green
Director of Best Practices, MECLABS
#b2bleadgen
#b2bleadgen
• Audience Poll
• Challenges and Trends
• Economics of Demand Generation and Lead Management
• Sales costs and...
#b2bleadgen
Today’s speaker
J. David Green – Director of Best Practices, MECLABS
• Case study: $1B pipeline in 20 months
•...
#b2bleadgen
MECLABS: A science lab with a consultancy
4
• More than 10 years of research
• 1,300+ major experiments
• Over...
#b2bleadgen
Audience poll
• How many direct or indirect sales full time employees do you support with
leads?
• 500+
• 100-...
#b2bleadgen
Audience poll
• On a scale of 1-5, how advanced would you say your lead generation
practices are today? (5=bes...
Challenges & Trends
#b2bleadgen
What is the biggest worry of
innovative B2B marketers?
8
#b2bleadgen
• In 2009, 68% of marketers saw generating high quality leads as their
number one business challenge.
• In 201...
#b2bleadgen
For the last three years, marketers have focused increasingly on lead quality.
This focus, in turn, has placed...
#b2bleadgen
What are the content implications
of lead nurturing and lead scoring?
11
#b2bleadgen
• More segmentation for relevance (personas, stage of consideration,
verticals)
• Low-production value content...
#b2bleadgen
What are data implications of lead
nurturing and lead scoring?
13
#b2bleadgen
• Less-end user data capture at the top of the funnel
• Incremental, optional, conditional end-user data captu...
Economics of demand gen:
The cost of sales follow up
#b2bleadgen
How does sales leadership see the
economics of lead generation?
16
#b2bleadgen
Eight out of ten marketers hand
raw leads straight to sales
Source: MarketingSherpa 2010 and 2011 B2B Marketin...
#b2bleadgen
Decline in lead population through
the funnel’s early stages.
@ up to 5 attempts/lead
& @ 10 dials/hour
Sales-...
#b2bleadgen
So what should those funnel
numbers mean in terms of expense?
19
#b2bleadgen
Assumes 1,960 hours per year and 19,600 dials.
“Cheap” leads cost a lot of money
Annual cost Hourly cost
Loade...
Economics of demand gen:
The cost-avoidance argument
#b2bleadgen
What financial yardsticks exist in
your company for measuring lead
generation effectiveness?
22
#b2bleadgen
• How much time do your
sales people spend
prospecting?
• How much is that
prospecting time costing
your compa...
#b2bleadgen
In this example, the
entire marketing
budget equals the
portion of the sales
budget allocated to
prospecting.
...
#b2bleadgen
Given that $50m budget allocation to sales prospecting from the prior slide, a
$200k loaded cost/field resourc...
Economics of demand gen:
The revenue capacity argument
#b2bleadgen
What revenue capacity can lead
generation unleash?
27
#b2bleadgen
Sales & Marketing Resource Allocation & the Buying Cycle
Prospecting Selling
Allocated
percent of
sales
resour...
#b2bleadgen
Sales-ready leads increase revenue capacity,
profits and growth
Sales prospecting
scenario
Scalable lead gen
s...
Economics of demand gen:
Key pipeline metrics for forecasting and analysis
#b2bleadgen
What funnel metrics can improve
sales and marketing planning,
forecasting and efficiency?
31
#b2bleadgen
Source: CSO Insights “2010 Lead Generation Optimization” report. Copyright © 2010 CSO Insights. All Rights Res...
#b2bleadgen
• Complex sales make
forecasting, analysis
and funnel-tuning
difficult
• Discrete funnel
conversion stages
imp...
Key takeaways
#b2bleadgen
• Lead quality concerns are driving initiatives in lead nurturing and lead
scoring, which both are driving num...
#b2bleadgen
• The revenue capacity argument: lead generation can improve the sales
and marketing expense-to-revenue ratio ...
#b2bleadgen
Contact information
Dave Green
Director of Best Practices, MECLABS
Co-Author of The B2B Refinery®
dave.green@m...
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Trends and Challenges of Lead Generation in 2011

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Dave Green, Best Practice Leader at MECLABS, reveals powerful ideas and insight that will take your lead generation to the next level and drive impressive ROI for your company in 2011.

Find out how can you deliver what CEOs most want - leads - within tight timelines and even tighter budget, where to place your priorities, and how to rapidly make an impressive impact on your company’s revenue capacity, profit, and growth.

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Trends and Challenges of Lead Generation in 2011

  1. 1. 2011 Lead Generation Trends and Challenges J. David Green Director of Best Practices, MECLABS #b2bleadgen
  2. 2. #b2bleadgen • Audience Poll • Challenges and Trends • Economics of Demand Generation and Lead Management • Sales costs and a cost-avoidance argument • A revenue capacity argument • Metrics • Summary – Key Takeaways Agenda 2
  3. 3. #b2bleadgen Today’s speaker J. David Green – Director of Best Practices, MECLABS • Case study: $1B pipeline in 20 months • Author and co-author of numerous white paper, blog posts, articles, and the book, The B2B Refinery® • Speak at MarketingSherpa, DMA, and other events • 25 years of wide ranging B2B lead generation experience • Working with large Cisco partner on lead nurturing projects • Consultant on technology channel marketing 3
  4. 4. #b2bleadgen MECLABS: A science lab with a consultancy 4 • More than 10 years of research • 1,300+ major experiments • Over 1 billion emails • 10,000 sales-paths tested • Hundreds of publications and conferences
  5. 5. #b2bleadgen Audience poll • How many direct or indirect sales full time employees do you support with leads? • 500+ • 100-499 • 50-99 • 20-49 • Less than 19 5
  6. 6. #b2bleadgen Audience poll • On a scale of 1-5, how advanced would you say your lead generation practices are today? (5=best) 6
  7. 7. Challenges & Trends
  8. 8. #b2bleadgen What is the biggest worry of innovative B2B marketers? 8
  9. 9. #b2bleadgen • In 2009, 68% of marketers saw generating high quality leads as their number one business challenge. • In 2010, the percentage rose to 75% Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report The challenge 9
  10. 10. #b2bleadgen For the last three years, marketers have focused increasingly on lead quality. This focus, in turn, has placed greater emphasis on: • Data hygiene and enhancement • Lead nurturing • Lead scoring • Funnel metrics • Alignment The current economy intensifies C-suite demands on marketing for ROI The challenge 10
  11. 11. #b2bleadgen What are the content implications of lead nurturing and lead scoring? 11
  12. 12. #b2bleadgen • More segmentation for relevance (personas, stage of consideration, verticals) • Low-production value content (e.g., blogs, raw video) • More employee writers/thought-leaders • More re-purposing/multi-purposing • Content aggregation services through web-crawling and linkage/summary • Integration of social media into lead nurture streams (as well as a demand generation tool) Based on trends in 2010 and projected for 2011, nurturing and scoring depend on content 12
  13. 13. #b2bleadgen What are data implications of lead nurturing and lead scoring? 13
  14. 14. #b2bleadgen • Less-end user data capture at the top of the funnel • Incremental, optional, conditional end-user data capture • Great focus on data hygiene • Data appends (account, contact, triggers) • Account-level modeling (propensity to buy and buying potential) • Content extrapolation of problems, function, level, depth of interest Based on trends in 2010 and projected for 2011, relevant content-nurturing requires data 14
  15. 15. Economics of demand gen: The cost of sales follow up
  16. 16. #b2bleadgen How does sales leadership see the economics of lead generation? 16
  17. 17. #b2bleadgen Eight out of ten marketers hand raw leads straight to sales Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report 17
  18. 18. #b2bleadgen Decline in lead population through the funnel’s early stages. @ up to 5 attempts/lead & @ 10 dials/hour Sales-ready leads Lead scoring, tele-qualifications4 - 7 1.6 – 2.8 hours New leads Filled out web form, called toll-free number, visited booth, attended webinar, etc. 100 40 hours Valid leads Insufficient info, bogus info, not in target market 70 - 85 28 - 34 hours Mountains of leads, molehill of sales 18
  19. 19. #b2bleadgen So what should those funnel numbers mean in terms of expense? 19
  20. 20. #b2bleadgen Assumes 1,960 hours per year and 19,600 dials. “Cheap” leads cost a lot of money Annual cost Hourly cost Loaded cost/ Field sales rep $ (200,000) $ (102) Leads Hours Cost/Hour New leads 100 40 $ (4,082) Valid leads 70 34 $ (3,469) Sales-ready leads 7 2.8 $ (286) 100 70 7 20
  21. 21. Economics of demand gen: The cost-avoidance argument
  22. 22. #b2bleadgen What financial yardsticks exist in your company for measuring lead generation effectiveness? 22
  23. 23. #b2bleadgen • How much time do your sales people spend prospecting? • How much is that prospecting time costing your company? Sales prospecting costs more than a CFO might expect Generating leads/researching accounts, 18.70% Account service calls, 15.20% Administrative tasks/meetings, 18.00% Selling: Face-to- face or over-the- phone meetings, 11.50% Other: Travel, training, etc, 36.60% Source: CSO Insights “Sales Performance Optimization” report, 15th edition: over 1,800 companies surveyed. Copyright © 2009 CSO Insights. All Rights Reserved. 23
  24. 24. #b2bleadgen In this example, the entire marketing budget equals the portion of the sales budget allocated to prospecting. Sales prospecting cost ≥ Marketing budget? Sales prospecting scenario Revenue $ 1,000,000,000 Profit $ 100,000,000 Marketing budget $ (50,000,000) Sales budget $ (250,000,000) Other expenses $ (600,000,000) Sales budget line item Time prospecting $ 1,000,000,000 Prospecting allocation $ 100,000,000 24
  25. 25. #b2bleadgen Given that $50m budget allocation to sales prospecting from the prior slide, a $200k loaded cost/field resource is the equivalent of 250 sales people. ($50m sales budget allocation) / ($200k/rep) = 250 reps Sales prospecting equals a lot of FTEs Annual cost Sales budget $ (50,000,000) Loaded cost/field sales rep $ (200,000) Sales FTEs 250 25
  26. 26. Economics of demand gen: The revenue capacity argument
  27. 27. #b2bleadgen What revenue capacity can lead generation unleash? 27
  28. 28. #b2bleadgen Sales & Marketing Resource Allocation & the Buying Cycle Prospecting Selling Allocated percent of sales resources 0% 100% These reallocated sales resources result in increased revenue capacity/higher sales productivity More efficient sales resources Less efficient sales resources As much as possible, replace these sales resources with lower- cost methods of marketing & telemarketing contact Nurturing Buying cycle stages Lead generation scales sales 28
  29. 29. #b2bleadgen Sales-ready leads increase revenue capacity, profits and growth Sales prospecting scenario Scalable lead gen scenario Revenue $ 1,000,000,000 $ 1,100,000,000 Profit $ 100,000,000 $ 190,000,000 Marketing budget $ (50,000,000) $ (60,000,000) Sales budget $ (250,000,000) $ (250,000,000) Other expenses $ (600,000,000) $(600,000,000) Sales budget line item Time prospecting 20% 10% Prospecting allocation $ (50,000,000) $ (25,000,000) • 10% more selling time • $10m increase in marketing budget 29
  30. 30. Economics of demand gen: Key pipeline metrics for forecasting and analysis
  31. 31. #b2bleadgen What funnel metrics can improve sales and marketing planning, forecasting and efficiency? 31
  32. 32. #b2bleadgen Source: CSO Insights “2010 Lead Generation Optimization” report. Copyright © 2010 CSO Insights. All Rights Reserved. For the first time in the seven years of this report, a slim majority (51%) of responding firms now track the ROI of their marketing campaigns. 32
  33. 33. #b2bleadgen • Complex sales make forecasting, analysis and funnel-tuning difficult • Discrete funnel conversion stages improve forecasting accuracy and narrow problem identification • Feedback loops can improve upstream and downstream stages. Copyright © MECLABS 2010, all rights reserved. Buyingcycle New leads Registered leads Rules-validated leads Phone-ready leads Phone-validated leads Sales-ready leads Sales-validated leads Sales outcomes Sales-forecasted opportunities 75% to 95% Measuring discrete funnel stages improves forecasting and operational efficiency 33
  34. 34. Key takeaways
  35. 35. #b2bleadgen • Lead quality concerns are driving initiatives in lead nurturing and lead scoring, which both are driving numerous marketing changes • Sales prospecting offers marketers a financial yardstick for measuring lead generation effectiveness • The cost avoidance argument: • Sales qualification is very expensive • Sales prospecting is very expensive Key takeaways 35
  36. 36. #b2bleadgen • The revenue capacity argument: lead generation can improve the sales and marketing expense-to-revenue ratio (sales scalability and sales productivity) • The right metrics can improve forecasting and drive continuous funnel improvement Key takeaways 36
  37. 37. #b2bleadgen Contact information Dave Green Director of Best Practices, MECLABS Co-Author of The B2B Refinery® dave.green@meclabs.com 409-770-0710 MECLABS.com ∙ MarketingExperiments.com MarketingSherpa.com ∙ StartWithaLead.com StartWithaLead.com/LinkedIn 37

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