This document discusses optimizing marketing and sales lead management through the use of marketing automation. It identifies common failures in the lead management process, including a lack of lead definition, data issues, poor lead qualification and scoring, ineffective sales handoff, and limited lead nurturing. Marketing automation can help address these failures by streamlining data collection, facilitating data sharing between marketing and sales, enabling lead nurturing, and supporting performance tracking. The document provides an overview of how marketing automation can help align sales and marketing processes to improve lead management.

1. I D C W O R K B O O K
Optimizing Marketing and Sales Lead
Management With Marketing Automation
September 2008
Adapted from: CMO Advisory Services Best Practices Series: Marketing’s Lead Management Process, by
Michael Gerard, IDC #204760
Sponsored by Marketo
At many B-to-B vendors, the sales and marketing departments are not well aligned, especially around
their respective lead management processes. Specifically, companies are challenged in the areas of
lead definition, data collection, lead qualification / lead scoring, sales handoff, lead nurturing and
performance measurement.
This IDC Workbook explores the challenges related to lead management processes and how
marketing automation software can help alleviate these challenges by supporting process integration
and data flow. This Workbook also discusses approaches to sales and marketing automation and
provides sales and marketing departments with a question set for selecting sales and marketing
technologies and vendors.
Common Failures in the Lead Management Process
At typical companies, approximately half of the marketing budget is allocated for demand generation
initiatives as events, direct marketing and Web advertising. Approximately one-third of that total
demand generation investment is earmarked to directly support the sales force in the form of market
development 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 challenge
for many companies. For example, at some companies, marketing sends responses to sales without
any cleaning or qualification, essentially giving sales permission to ignore marketing due to the low
quality of leads.
Companies looking to address the key points of failure need to examine the main stages of a
successful 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 for
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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 prospect's needs. Differentiation should be based in part on what
stage the lead is in within the company's 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 universal
blueprint for lead management, there are best practices that marketers can follow.
Aligning Sales and Marketing with Automation
In 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. While
sales departments have already invested heavily in developing and deploying CRM systems and
processes, 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 end
goal of optimizing revenue, profit and market share.
Marketing automation software includes a variety of functions that can help marketing better align
with 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 resolving
data quality issues; facilitates the sharing of lead generation data; enables lead nurturing throughout
2 ©2008 IDC

3. the marketing and sales lead management process; and supports the tracking of lead generation
data. In addition, such software includes the ability to qualify, score and route leads; and analyze
metrics and generate reports for performance management. In effect, marketing automation software
can address the most common failure points that exist within marketing’s lead management
processes.
Improving Lead Management Through Process-Driven Technology
By implementing marketing automation technology, marketing can vastly improve the execution and
governance of its lead management processes and align more closely with the sales department.
Marketing automation technology can allow marketers to automate and measure various processes
and activities related to demand generation campaigns with the goal of generating the highest quality
sales 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 Management
Is Marketing Automation Right for your Organization?
The ability to leverage technology for automating marketing's lead management process has
historically been limited by a marketing organization's inability to develop, implement and govern
related processes, budgetary restraints, and lack of marketing and sales alignment.
In today's environment, the following factors have significantly improved companies' access and
ability 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 IDC's 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
IDC's 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 Worksheet
The key to successfully deploying marketing automation software for lead management is to first
ensure 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 targeted
for automation; organizations can select a single area to automate and then add functionality over
time. However, it is necessary that both sales and marketing should also set expectations for how
and 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 all
principal stakeholders from marketing and sales, as well as from finance and IT if appropriate.
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4. Table 1
Prioritizing Needs (process analysis first, then technology assessment and vendor
selection)
1. What does marketing's 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 organization's greatest challenges
today in managing marketing's 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, 2008
Table 2 lists questions that will help technology decision makers conduct a technology feasibility
assessment.
4 ©2008 IDC

5. Table 2
Adopting 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 marketing's 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. 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, 2008
Table 3
Implementing 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 vendor's
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. 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 vendor's 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, 2008
Essential Guidance for Marketers
Marketers are spending significant amounts of money on demand generation and lead management
processes. In fact, recent IDC CMO Advisory Practice research indicates that 40% of marketers
invest over 2% of their marketing budget on marketing applications software; and 44% of marketing
organizations indicate that lead management will receive greater focus in 2008–2009 of all their
marketing-related IT initiatives. Therefore, marketers are looking to become more efficient by
reducing manual lead management processes, as well as more effective with respect to how leads
are managed and eventually sold to.
To a great extent, marketing departments trail sales departments in the adoption of CRM and lead
management technologies. For marketers, there is a need to aggressively implement marketing
automation software so that they can close the gap with sales. To fulfill their needs, marketers will
look 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 marketing's impact on the
company's revenue cycle
A B O U T T H I S P U B L I C A T I O N
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8 ©2008 IDC