B2B Marketing Automation Blog | LeadGenesys Inc.

Predictive Revenue…Are We There Yet?

For most marketers, the answer is the same one I gave to my kids on a recent road trip to Disneyland, "Not yet … but the good news is we know how to get there."

And just like Disneyland, predictive revenue, born from fantasy, is now a real destination – which more and more progressive B2B marketers are seeking to arrive at.

So how exactly do you get there ? As with any road trip, you'll need: 1. Resources 2. A Map, and above all: 3. a commitment to GET THERE.

 

Start with Predictive Marketing Automation Analytics: A key resource you'll need to complete this journey is a marketing automation application equipped with predictive analytics. You may already have a CRM and even some 3^rd party modeling tools like SPSS, SAP, or PivotLink, but the predictive metrics on the complete marketing and sales cycle ( the revenue cycle ) are essential. To predict revenue, your marketing automation solution must have a few key features and an elegant way presenting data. Without going into an exhaustive list of marketing automation features, the solution must at a minimum be able to track all touch points in the revenue cycle and be able to build and grade a unified contact history profile on each contact in your database. The basics include:

Email Activities, ( sends, opens, bounces, responses, opt-outs)

Website Activities ( which pages are being viewed, how many pages viewed, how long, and how often ) Where the website visitor is coming from and which pages are being exited.

Social Network Activity: How is the contact communicating in social networks in relation to your offering?

Landing Page Activity: Which sources are driving landing page visitors, which forms are being abandoned, and why?

Lead Grading is an important ingredient in predictive revenue and should be maintained in close collaboration with the sales team's criteria of an A through F quality lead.

Rules-based, Triggered Activities and Alerts are also key to implementing a repeatable process that helps predict revenue.

 

Chart Your Course with the Sales Team: With the measurement tools in place, mapping the quickest path to predictive revenue is much easier. As co-pilots, marketing and sales must map the course together. In additional to grading criteria, personas and each stage of the revenue cycle must be agreed on. The nurturing schema for graded persona's must be understood by each team member. Likewise, criteria for triggered alerts must be jointly defined and adjusted. It may take some time for the grading segments to gel, but once they do, some things to analyze include:

    Which sources are driving the highest quality leads within defined time frames ?

    What is my cost per lead broken down by lead grade ?

    What percentage of A, B and C leads result in marketing qualified, sales accepted leads and forecasted opportunities.

    How are leads progressing from one stage to the other ?

    What percentage of leads progress from one stage to the next – and how quickly ?

    What actions are impacting the acceleration of leads through the revenue cycle ?

    What is my cost per marketing qualified lead, sales accepted lead, opportunity ?

    What percentage of opportunities result in sales ?

    Which reps and lead sources have a higher conversion rate from sales acceptance to opportunity to sale ?

There are quite a few other metrics that can analyzed, but knowing how differently sourced and different quality leads are progressing through the revenue cycle helps you reveal a "prospect cadence" that contributes to predictable revenue. Knowing cost per graded lead by source and propensity to convert to sale helps identify projected ROI on your marketing campaigns. Through alignment with sales, this measurable and truly accountable map finally positions the marketer as a more precise navigator to predictable revenue.

 

Get Commitment to Run the Business on Predictive Revenue:

It starts with the C-suite and permeates down to each marketing manager and sales rep. It's not just a notion that everyone simply agrees with. It's a hands-on process that even the C-level execs are involved with – often times on a daily basis. Give the C-level execs insight on the revenue cycle with an executive dashboard. Include them on key triggered alerts – and define the follow-up actions. Consider a more frequent forecast of sales accepted leads, forecasted opportunities, projected revenue and projected ROI. Trigger alerts when near team indications don't align with earlier projections.

Any new place worth getting to requires change. Since change is often swifter with outside assistance, consider hiring a guide with deep domain expertise and a proven approach. As the wheels of change start turning in the direction of predictive revenue, expect some bumps along the way. Testing your initial assumptions on lead grades, triggered activities and alerts is essential, and adjustments are expected. As long as everyone understands we're ultimately headed to Disneyland, a few detours along the way are acceptable.

 

 

The Unified Contact History Profile: If we build it... will they come ?

Everyone talks about it.... few do it.

By now most marketers know the value of a truly integrated marketing approach.  The ROI is proven, every analyst, agency and consultant says it's key, and nearly every marketer is "striving" to execute on it.   Why then are so few marketers actually doing it well ?

A lack of budget, resources, and measurable analytics are all common answers.

So if it's hard to get more budget and resources without measurable analytics, what can a smart marketer do?

One answer is to cost effectively build a unified contact history profile on each prospect record.  Then over time, look at the prospects that are now clients (or about to become clients) and discover key trends in outbound and inbound communications.  However, simply recording the number of "touches" is not nearly enough and can actually lead to some counter productive assumptions.

The timing and quality of the touch is what should be looked at.   Knowing what prompted a quicker response and acceleration down the funnel is far more important than simply knowing the average number of touches.   Is this more difficult to determine, yes.  But does the ROI on discovering that pan out -- the answer is almost always yes when it comes to long sales cycles on complex offerings or on those that have diminishing differentiation.

A simple and efficient way to do this is to have tags on your website that recognize exactly who is checking you out and what pages they are viewing.  If you see that the visitor checks out a key page like your pricing page and you can trigger a timely email message, the likelihood of seeing a repeat visit to your website and acceleration of interest goes up considerably more than if you didn't apply that automated trigger.   

If you can automatically blend your website activity with your email, social, PPC, search, telesales, direct mail, print, and other marketing channels, all you need are some assumptions and the ability to apply rules-based triggers.  Then, over time take a look at your assumptions and to use a military term ... adjust fire.  The key here is to not have to do this in a manual fashion.  Adjustment must be quick and easy to implement, so make sure you work with a solution capable of doing that.  Being able to apply custom grading to the assumptions and triggers also helps.

Before you know it, you'll see more and better quality prospects percolating down the funnel to sales -- which in turn will get you the budget and resources you need to continually test your assumptions and refine your "touch" strategy.

As long as you systematically test and refine your assumptions, the side effects will be accelerated sales cycles, a less distracted sales team, better forecasts, fewer lost opportunities, and significantly improved marketing ROI.

Marketing Automation Promises...Undelivered

What are the most unbelievable marketing automation promises you've heard? 

Follow the discussion in the Linked In Group:  Marketing Automation Experts

At the end of the month, I'll post a wrap-up that, who knows... might serve us all as a useful ( if not tongue-in-cheek ) guide on what to look out for in the evaluation / buying process.

Pass this along to anyone you know who has purchased or is thinking of purchasing marketing automation software. -- Should be a lively discussion !

To get things rolling, here are some we've heard:

1.   "We'll double your sales -- guaranteed."
2.   "Your team will be fully trained in 1 hour"
3.   "Integration with the CRM is like the flick of a switch"
4.   "It's so easy a caveman can do it"
5.   "Just set it... and forget it"
6.   "Sales will love it"
7.   "You won't need professional services"
8.   "We're the 800lb gorilla in the space.. you can't go wrong"
9.   "All of our customer service reps are marketing automation experts"
10. "You'll cut your admin / reporting time in half"

Lead Scoring Software: The essential elements.

Lead Scoring has finally become a hot topic in the B2B demand generation space.    It’s nice to see a growing number of prospects ask about best practices on lead scoring and lead grading.  Although lead scoring has been central to the LeadGenesys lead nurturing engine since inception in 2002, we certainly don’t claim to have a monopoly on the concept.  As other marketing solutions begin to offer some semblance of lead scoring, it’s important to know the essential elements of a robust solution.   If you are thinking about implementing or improving lead scoring, check out our whitepaper, Best Practices for B2B Lead Grading, but at a minimum,  make sure the solution can flexibly score (and translate to a grade) based on a blend of key ingredients:

Profile attributes: 
These attributes include firmographic, BANT (budget, authority, need, and timing) and other qualification questions you ask throughout the marketing and sales cycle.

Activities:
Make sure the score is being impacted by all activities to include interaction with the website, physical events, direct mail and all emailing activity.  Basically the entire integrated marketing mix.

Timeline:
One of the pitfalls of bumping up a lead score based on a flurry of activity is that an active lead could actually be a student doing research or a competitor that keeps checking the website. The last thing you want is to grade these leads “A” and share them with the sales team.  It only takes a few of these activity-boosted “A” leads to discredit marketing sourced leads and put the entire lead scoring schema in question. 

A smarter approach is to have activity thresholds trigger a notification to the appropriate sales rep who can decide whether or not to accept the lead as “sales-ready” -- which then impacts the grade.  If you have to score or grade leads based on activities, make sure the score diminishes over a period of inactivity that you can stipulate.

Weighting:
Weighting is important when one or a few profile attributes are particularly more important than others.  Be sure to test many different scoring scenarios before applying weighting.  Again, applying weighting to an activity like the viewing of a particular website page or PDF is a risky proposition.  Once a lead with low scoring profile attributes (but with a high level of activity) is delivered to sales as an “A” grade – the damage is done. 

There are a number of other nuances to be considered when choosing a lead scoring solution, but one of the most important is working with a partner deeply rooted in B2B marketing best practices.  Even if you choose a solution without a robust and flexible feature set, as long as you are getting sound advice based on experience, you’ll avoid the common pitfalls of lead scoring and still deliver marketing accountability and leads that are truly “sales-ready.”

How To Create Internal Demand for Automated Lead Nurturing

We recently signed our 12th international client and in the process of enrolling them in our SmartStart program, they inquired about how to go about introducing and proving the value of lead nurturing to the sales team.  A good question - no matter what country you are in - and certainly worth a few words.

Before introducing yet another great initiative from marketing…

Understand the sale cycle:   Know the sales team’s pain and process.  Ask lots of open ended questions that help you understand the sale cycle, the process, the obstacles to purchase (“perceived” by the prospect and real), the buy signals, the competitive landscape, etc.  Understanding the mindset and process of the sales person is one of the single most important things you can do as a marketer supporting a B2B sales team.   (stay tuned for a future post on this topic listing actual questions to ask your B2B sales team)

Create demand from the sales team:  Once you understand the challenges of the sales cycle, ask how sales deals with those challenges.  Questions like, “How is that working out for you? How much time do you spend doing that? What would you do to improve that?”  and a host of others will help you quantify and qualify the demand.  Those same questions will help you formulate some compelling ways communicate the benefits of rules-based lead nurturing. 

Let others convey the benefits for you:   How often have you thoroughly researched an “optimal” solution, and introduced it to the sales team only to see it not contribute to revenue the way you thought it would?  The sales team of course needs to stay focused on opportunities, but there’s nothing wrong with sharing a few case studies with them to get their input on a potential solution.  It naturally lends credibility  if they see others realizing success with a lead nurturing solution.   Being an insider, you are in prime position to know who the informal influencers are on the sales team.  Get their input.   They are the squeaky wheels, so getting them to embrace a solution is arguably more important than getting sales management on board.  After all, if they don’t leverage the solution, sales management can very well conclude the lead nurturing solution is not as valuable as you think it is.

Refrain from introducing new processes:  Good sales people have a clearly defined process for moving a prospect to an opportunity and then to a sale.  Great sales people execute this process consistently, and document a prospect’s status sufficiently to determine the appropriate next steps.  Additional documentation steps for the sole benefit of marketing just won’t happen. So make sure that any demand generation and nurturing solution is sufficiently well though out to trigger automated nurturing on data that is routinely updated by the sales team.  The little things are important, like sharing nurturing and hand-raising activity on the same CRM screen regularly viewed by sales.  Expecting sales to hunt for this data on a new screen or tab may seem inconsequential, but it's a new process nonetheless. Each time you introduce something that is not a part of an effective salesperson’s normal routine, you invite the process to breakdown.

Transparency is key:    Sales needs to be aware of how their leads are being nurtured.  They should of course help define the steps of a drip marketing campaign, but also be able to see how it’s being executed and have the ability to modify the steps as needed.  While selling is a process, exceptions to the process happen all time. Make sure your nurturing solution is flexible enough to allow sales to halt or postpone nurturing steps based on their judgments.  ( more on this topic in a future post )

Get sales to “own” the solution:  Since the lead generation, qualification and nurturing solution ultimately benefits the sales team, it’s understandable that they will want a hand in crafting how the solution will be leveraged.  Sales should of course define the “sales-ready” lead, and the related alert triggers and nurturing schemas.  You’ll get many different definitions of a “sales ready” lead and just as many opinions on how to move prospects through the sales cycle. Listen to all of them, and then get sales management to agree on some basic assumptions that can be adjusted later on as those assumptions get validated. 

Create an internal case study:  If you have a very large or disparate sales team, consider getting just a few sales team members to participate in a pilot before rolling out the solution to the rest of the team.  This is a good way to iron out lead scoring / grading and nurturing assumptions.  Almost every time a client has done this, the sales team ends up dialing back or tightening the criteria for automated alerts, because the automated nurturing inherently stimulates more hand raising activity.  For instance, sales may only want to be alerted on “B” quality leads that view at least 8 pages on the website in 24 hours vs just 4 pages.  With positive results on a pilot, sales management is much more likely to support your initiative during the roll-out phase. 

Prove a contribution quickly:  You want to show proof of success quickly, and build on that with additional adjustments.  Complex sales cycles greater than 60 days definitely benefit from lead nurturing, but waiting 60 to 90 days to show a handful of results is not an option.  Make sure your solution automatically gives you the detailed metrics you need in order to show benefits within 30 days.  Some of these metrics include sales probability percentages and hand raising activities of nurtured opportunities compared to a baseline of non-nurtured prospects.  With best practices applied to the nurturing and alert triggers, you should also be able to convey significant time savings.  One of the key metrics here is the time saved hunting down and disqualifying leads that just aren’t sales-ready.

So you might be thinking all of this just takes too long…welcome to selling.  Sure, you already know automated lead nurturing is a no-brainer.  You know sales will shorten sales cycles and benefit from the lead grading and triggered alerts they define.  You already know the time savings alone will ROI justify the solution and that you can get up and running in just two days.  But here’s the rub…the proposed solution can’t be your idea – or at least perceived to be yours.  Much of my training as an Army Psychological Operations officer focused on this, but quite frankly, most parents who have raised a 4 year old, already know this "rule of influence".   If you are blissfully unaware of this tactic, it’s really very simple.

All you need to do is plant the seed with the sales team, and with effective nurturing, you’ll soon generate the demand you need to successfully introduce rules-based lead nurturing to your organization.  Of course you could take the shortcut "because I said so" approach, but if you do, expect some push back...and maybe even a tantrum or two.

B2B Marketing ROI … and other Pointless Metrics

There, I said it.  Actually, those of you who know me have most likely heard me say B2B Marketing ROI is meaningless on more than a few occasions.   Don’t get me wrong… ROI can be useful, but really more so for companies with very short B2B sales cycles.   However, when the product you are selling is complex, with a long sales cycle, and many touches to influencers and decision makers, tracing ROI back to a specific marketing effort naturally becomes much more difficult to compute. 

What’s a B2B marketer to do… assign ROI to the first touch, the last touch, divide it amongst all the touches? 
The answer is none of the above. 

A better metric than “actual” ROI, is anticipated or “projected” ROI. To dial in on this metric you must have a lead grading schema in place and have a conservative estimate from sales on what the sale or conversion ratio will be on A leads vs B leads over the length of the typical sales cycle. 

With an agreed upon conversion ratio of A and B leads to actual sales, you can now project sales based on the number of A and B leads in the funnel.  Nurturing leads to the status of A or B takes some time, but arguably not as long as it takes to make the sale.   With some simple trending and response analysis, marketing can easily identify some common touches, sources, messaging and sequencing that converted A and B leads have in common.  This in turn should enable a B2B marketing team to adjust fire earlier and with a higher degree of confidence than waiting to analyze actual ROI among a much smaller sample size, and after a longer time span where more -- and harder to measure -- variables may contribute to sales and no-sales.

In a nutshell, if you have a long sales cycle. with multiple touches to multiple people at target companies, you’ll be much better served by focusing on the net number of A and B leads you can deliver to sales vs trying to compute actual marketing ROI on sales.   This concentration on cost per A and B lead brings into focus some other bogus metrics:

Cost Per Lead:  
Who cares... especially when the majority of leads are graded C or worse.  Cost per A and B quality lead is a much better measure of B2B marketing effectiveness.

Cost Per Click:
Most of you who are seeing the typical capture ratio of Google and other Banner sponsorships below 1% already know cost per click is worthless without knowing the capture ratio of A and B leads from these sources.

Response and Open Rates: 
Without the A and B lead qualifier, these rates could conceivable relate to D and F quality leads.

Average Sales Cycle:

This is meaningless if the sales team is sifting through leads of differing quality.   The average sales cycle should start when a truly “sales-ready” lead is delivered to sales.    Once this base-line is established, a better metric is average length of time from a “B” lead to an “A” lead.  Best-practice based lead nurturing combined with tailored alerts to the sales team should shorten the length of time it takes a B lead to become an A lead.  Continued triggering of alerts in the later stages of the sales cycle should also help accelerate the time to close a deal.

Average Annual Attrition Rate: 
Clients leave for a reason.  Know why each and every time so you can remedy the root cause.  Without breaking this down by the top causes, don’t expect to do anything about the average annual attrition rate.

Will we ever see more CRO's ( Chief Revenue Officers ) ?

B2B Marketing and Sales are blending out of necessity -- but will it ever happen at the C-level?

Some progressive B2B companies are starting to create the CRO ( Chief Revenue Officer ) position that oversees both marketing and sales. Others have experimented with it and reverted back to the traditional split of sales and marketing.

I believe it will still be at least another decade before this blended position becomes more commonplace just because it's rare that you find a marketer who can manage a large sales team or sales person who has the experience to optimize marketing ROI.

Has anyone worked with a CRO and or managed both sales and marketing at a company generating over 75 million in annual revenue? If so:

1. What were your observations on their effectiveness managing both teams ?

2. What do you believe is the key experience / attribute or other factor to success in this blended position ?

3. Do you believe we'll see more CRO's in the future or is it unrealistic for top sales producers to take a pay cut to gain the requisite marketing experience and also unrealistic to expect seasoned marketers to switch to a commissioned sales position to earn their sales chops.

Do you have any other observations on the potential CRO position and what it means for demand generation / marketing automation specialists?

Check out and/or contribute to the discussion on Linked In's Marketing Automation Specialists Group.