Idc marketing-automation-workbook


Published on

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Idc marketing-automation-workbook

  1. 1. I D C W O R K B O O KOptimizing Marketing and Sales LeadManagement With Marketing AutomationSeptember 2008Adapted from: CMO Advisory Services Best Practices Series: Marketing’s Lead Management Process, byMichael Gerard, IDC #204760Sponsored by MarketoAt many B-to-B vendors, the sales and marketing departments are not well aligned, especially aroundtheir respective lead management processes. Specifically, companies are challenged in the areas oflead definition, data collection, lead qualification / lead scoring, sales handoff, lead nurturing andperformance measurement.This IDC Workbook explores the challenges related to lead management processes and howmarketing automation software can help alleviate these challenges by supporting process integrationand data flow. This Workbook also discusses approaches to sales and marketing automation andprovides sales and marketing departments with a question set for selecting sales and marketingtechnologies and vendors.Common Failures in the Lead Management ProcessAt typical companies, approximately half of the marketing budget is allocated for demand generationinitiatives as events, direct marketing and Web advertising. Approximately one-third of that totaldemand generation investment is earmarked to directly support the sales force in the form of marketdevelopment funds, sales training and tools, and other channel marketing activities. Consequently,the integration of marketing and sales is critical, yet nevertheless such alignment remains a challengefor many companies. For example, at some companies, marketing sends responses to sales withoutany cleaning or qualification, essentially giving sales permission to ignore marketing due to the lowquality of leads.Companies looking to address the key points of failure need to examine the main stages of asuccessful lead management process: Lead definition. Devising a common definition of a lead based on an agreed upon taxonomy with marketing and sales. This common definition is the foundation for an effective lead management process, without which the organization will be unable to identify and nurture prospects with the greatest potential, leading to lost opportunities and continued misalignment with sales. Regardless, the majority of organizations today continue to operate without a global definition of a lead. Data collection and cleansing. Sales and marketing need to collect the data that is most important for their relative functions. Data collection and cleansing are also essential to ensuring database integrity for customers and leads. Although clean data continues to elude even the largest marketing organizations today, recent IDC research indicates that this is an area earmarked forIDC 699
  2. 2. improvement: For example, over one-third of B-to-B tech marketers intend to significantly increase their investment in improved customer (and prospect) database management in 2009. Lead qualification and scoring. The need for qualifying leads accurately and applying a scoring methodology that facilitates more effective lead management based on both demographics and lead behavioral and engagement characteristics is critical. Sales and marketing must capitalize their resources by investing the most time and attention to those leads that are most likely to be converted into customers. The cost associated with poor lead qualification? According to IDC research, among BtoB tech marketers, there is a poor return on investment on the over $20 billion per year they spend on demand generation efforts, not to mention the over $100 billion they spend per year on sales resources. Sales handoff. Marketing and sales need to improve how they communicate and collaborate with each other (e.g., defining lead definitions and setting expectations for lead quality and quantity) as well as tracking lead handoffs even after they go to sales. At some companies, there is no follow-up once a lead is handed off to sales, a situation which serves to further disconnect marketing from sales. IDC research indicates that approximately 25% of sales time is spent on unproductive prospecting, even as 60–70% of sales representatives ignore marketing leads. Lead nurturing. The process of lead nurturing—or interacting appropriately with those prospects who are not ready to purchase by maintaining a relevant and informative dialogue—is critical for marketing and sales. It is important to differentiate among the various leads as part of the nurturing strategy to ensure that the inclusion of a lead as part of a marketing event or initiative is appropriate based upon the prospects needs. Differentiation should be based in part on what stage the lead is in within the companys qualification process (e.g., BANT is a common part of companies qualifying processes—Budget, Authority [to buy], Need and Timing). With less than 25% of companies having a formal lead nurturing process, this remains an opportunity for differentiation by best-in-class marketers. Marketing automation provides significant benefit to aiding this process execution. Performance management. Gauging lead management efficiency and effectiveness to identify and refine investment priorities and applicable processes and technologies is an area that can result in significant payback. Do you wish you could better understand and demonstrate how all your marketing activities impact pipeline and revenue? How about understanding how much you could improve the ROI of your marketing programs if you knew how each program is influencing pipeline and revenue, and could adjust budgets accordingly?Obviously, the overall process of lead management is a complex one, and while there is no universalblueprint for lead management, there are best practices that marketers can follow.Aligning Sales and Marketing with AutomationIn order to better align sales and marketing—and thereby mitigate the numerous points of failure—sales and marketing departments are increasingly turning to marketing automation software. Whilesales departments have already invested heavily in developing and deploying CRM systems andprocesses, marketing has yet to approach lead management with the same rigor.This can be achieved through collaboration with sales in the lead management process, with the endgoal of optimizing revenue, profit and market share.Marketing automation software includes a variety of functions that can help marketing better alignwith sales. When applied to the lead management process, such software streamlines the data-collection process; provides a repository for lead generation data; increases the potential for resolvingdata quality issues; facilitates the sharing of lead generation data; enables lead nurturing throughout 2 ©2008 IDC
  3. 3. the marketing and sales lead management process; and supports the tracking of lead generationdata. In addition, such software includes the ability to qualify, score and route leads; and analyzemetrics and generate reports for performance management. In effect, marketing automation softwarecan address the most common failure points that exist within marketing’s lead managementprocesses.Improving Lead Management Through Process-Driven TechnologyBy implementing marketing automation technology, marketing can vastly improve the execution andgovernance of its lead management processes and align more closely with the sales department.Marketing automation technology can allow marketers to automate and measure various processesand activities related to demand generation campaigns with the goal of generating the highest qualitysales leads. Additionally, marketers have the freedom to execute campaigns with less manual effort,allowing more time to focus on the strategic and creative activities that improve marketing ROI.Leveraging Marketing Automation for Lead ManagementIs Marketing Automation Right for your Organization?The ability to leverage technology for automating marketings lead management process hashistorically been limited by a marketing organizations inability to develop, implement and governrelated processes, budgetary restraints, and lack of marketing and sales alignment.In todays environment, the following factors have significantly improved companies access andability to leverage marketing automation for lead management: Many marketing organizations at larger companies have established a marketing operations function to apply greater process rigor across the organization; and lead management remains a top priority for process improvement. In fact, 44% of companies surveyed in IDCs recent Tech Marketing Benchmarks study indicate that their top marketing-related IT focus for 2008–2009 will be their lead management system. Marketing organizations are applying a greater percentage of their investment towards automating the processes that have been created during the past couple of years. Based upon IDCs recent Tech Marketing Benchmarks study, approximately 2% of marketing investment is allocated for marketing applications software; and IDC recommends 3–4%. Marketing automation technology has become significantly more accessible for companies as a result of newer technologies and delivery models (e.g., software as a service or SaaS). Alignment between marketing and sales has increased in the past decade, including initial work around defining lead definition, qualification, and routing processes.Implementing Marketing Automation for Lead Management: A WorksheetThe key to successfully deploying marketing automation software for lead management is to firstensure that a process is established by sales and marketing—what and how information is collected,how leads are defined, etc. It is not necessary to have the entire lead management process targetedfor automation; organizations can select a single area to automate and then add functionality overtime. However, it is necessary that both sales and marketing should also set expectations for howand where information should ideally flow to best enhance sales and marketing processes—marketing can then make informed decisions about a marketing automation vendor.In addition, any technology evaluation should include whenever possible the participation of allprincipal stakeholders from marketing and sales, as well as from finance and IT if appropriate.©2008 IDC 3
  4. 4. Table 1 Prioritizing Needs (process analysis first, then technology assessment and vendorselection) 1. What does marketings current lead management process look like? Have we provided the framework for identifying leads across the organization to facilitate communication? Where does information come from and how is it managed by the organization? How quickly does information flow through the organization, and is this fast enough? How do we govern the lead management process, measure its success and ensure continuous improvement? 2. Which groups in my organization interact with this process, and at which parts of the process? Have I included representatives from these groups in development and execution of my lead management process? (e.g., field marketing, sales, operations, IT) 3. What are my organizations greatest challenges today in managing marketings lead-management process? (What aspects can be solved by improvement in people and process, and what are the greatest opportunities for automation?) 4. What opportunities exist for improved cost savings and/or revenue generation as a result of process improvement? (e.g., How much are we investing in lead management today? What have been our greatest challenges? What additional steps would be needed to address these challenges? What benefits would result from this additional investment?)Source: IDC, 2008Table 2 lists questions that will help technology decision makers conduct a technology feasibilityassessment. 4 ©2008 IDC
  5. 5. Table 2Adopting a Marketing Automation Application: Assessing Technology 1. What opportunities exist to automate the lead management process? (e.g., opportunities addressed in the process analysis, including identifying the biggest points of failure in the current lead management process) 2 Have you established specific scenarios that represent key challenges within your organization that must be addressed by the solution? 3. What are the potential cost savings and/or additional revenue that may result from this proposed automation? (e.g., What benefits will the company realize as a result of addressing the challenges and opportunities identified in questions 1 and 2?) 4. What are the total costs associated with purchasing, deploying and managing the applications to automate marketings lead management process? a) Should we consider: 1) an on-demand or software-as-a-service application (i.e., software that is delivered over the Web and purchased via subscription licensing); 2) an on-premise or licensed application (i.e., software purchased and maintained by the customer); and/or 3) a hosted application(i.e., software that is licensed by the end user but maintained and supported by the supplier generally at an external hosting facility)? b) What are the ease-of-use factors? (including understanding who needs to use the software and what skills these users have.) c) How fast can we "ramp-up" with training/on- boarding? d) How will the new application integrate with existing applications and databases? 5. What is the financial feasibility of deploying the marketing automation solution(s)? a) Total cost of ownership (initial costs, customization, ongoing maintenance and other fees)©2008 IDC 5
  6. 6. b) Total estimated future cash flows resulting from deployment of the solution (cost savings and additional revenue) c) Net present value d) Payback period (i.e., time required for the cost savings and additional revenue to exceed the total cost of the application) e) Internal rate of return 6. What other factors need to be considered to justify the cost of purchasing a solution? (e.g., budget restrictions, involvement by other departments, etc.) 7. How quickly do I need to deploy a solution?Source: IDC, 2008Table 3Implementing Marketing Automation Software: Selecting a Vendor 1. Does the vendor have a good reputation for providing solutions? 2. Does the vendor have experience working with organizations of a similar size focused on similar types of customers? (e.g., BtoB vs. BtoC) 3. Are the vendor’s solutions designed for our type of marketing processes? 4. Does the vendor have experience in our industry? 5. Can the vendor calculate TCO for the solution? 6. Can the vendor provide customer references? 7. What is the ease of use of the vendors solution(s) and how quickly can the new solution be installed and in operation? 8. What are the key functionalities for marketing, both "must-have" as well "nice to have" functionality? (e.g., integration with an existing CRM tool or database to leverage current prospect records; segmentation and targeting; communication work-flow design and execution; lead scoring; performance measurement) 6 ©2008 IDC
  7. 7. 9. What is the potential of each vendor to provide our marketing organization with a competitive differentiator? (including the ability of the vendor to help drive innovation in the lead management area) 10. What are the long-term risks of using a specific vendor? (e.g., potential switching costs, vendor viability, customer support, product scalability) 11. What ongoing support does the vendor offer for its customers? (e.g., customer conferences, online vendor and user community support) 12. Do the vendors application technologies support open standards for integration such as Web services? (e.g., open standards will insure that the data that must be shared, can be shared) Source: IDC, 2008Essential Guidance for MarketersMarketers are spending significant amounts of money on demand generation and lead managementprocesses. In fact, recent IDC CMO Advisory Practice research indicates that 40% of marketersinvest over 2% of their marketing budget on marketing applications software; and 44% of marketingorganizations indicate that lead management will receive greater focus in 2008–2009 of all theirmarketing-related IT initiatives. Therefore, marketers are looking to become more efficient byreducing manual lead management processes, as well as more effective with respect to how leadsare managed and eventually sold to.To a great extent, marketing departments trail sales departments in the adoption of CRM and leadmanagement technologies. For marketers, there is a need to aggressively implement marketingautomation software so that they can close the gap with sales. To fulfill their needs, marketers willlook to vendors that can: Provide solutions that are intuitive and easy to implement and maintain Support existing processes with automation Facilitate end-to-end data management Provide insight into performance management as part of continuous improvement across marketing and sales Provide a means of communication to other teams regarding marketings impact on the companys revenue cycleA B O U T T H I S P U B L I C A T I O NThis publication was produced by IDC Go-to-Market Services. The opinion, analysis, and research results presented hereinare drawn from more detailed research and analysis independently conducted and published by IDC, unless specific vendorsponsorship is noted. IDC Go-to-Market Services makes IDC content available in a wide range of formats for distribution byvarious companies. A license to distribute IDC content does not imply endorsement of or opinion about the licensee.©2008 IDC 7
  8. 8. C O P Y R I G H T A N D R E S T R I C T I O N SAny IDC information or reference to IDC that is to be used in advertising, press releases, or promotional materials requiresprior written approval from IDC. For permission requests, contact the GMS information line at 508-988-7610 or and/or localization of this document requires an additional license from IDC.For more information on IDC, visit For more information on IDC GMS, visit Headquarters: 5 Speen Street Framingham, MA 01701 USA P.508.872.8200 F.508.935.4015 8 ©2008 IDC