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 a cost-avoidance argument
• A revenue capacity argument
• Metrics
• Summary – Key Takeaways
Agenda
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#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
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MECLABS: A science lab with a consultancy
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• More than 10 years of research • 1,300+ major experiments • Over 1 billion emails • 10,000 sales-paths tested • Hundreds of publications and
conferences
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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
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Audience poll
• On a scale of 1-5, how advanced would you say your lead generation practices are today? (5=best)
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Challenges & Trends
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What is the biggest worry of innovative B2B marketers?
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• 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
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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
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What are the content implications of lead nurturing and lead scoring?
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• 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
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What are data implications of lead nurturing and lead scoring?
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• 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
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Economics of demand gen: The cost of sales follow up
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How does sales leadership see the economics of lead generation?
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Eight out of ten marketers hand raw leads straight to sales
Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report
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Decline in lead population through the funnel’s early stages.
@ up to 5 attempts/lead & @ 10 dials/hour
Sales-ready leads Lead scoring, tele-qualifications 4 - 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
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So what should those funnel numbers mean in terms of expense?
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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
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Economics of demand gen: The cost-avoidance argument
#b2bleadgen
What financial yardsticks exist in your company for measuring lead generation effectiveness?
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• 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.
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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
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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
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Economics of demand gen: The revenue capacity argument
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What revenue capacity can lead generation unleash?
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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
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#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
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Economics of demand gen: Key pipeline metrics for forecasting and analysis
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What funnel metrics can improve sales and marketing planning, forecasting and efficiency?
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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.
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#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.
Bu
ying cycle
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
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Key takeaways
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• 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
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#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
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#b2bleadgen
Contact information
Dave Green Director of Best Practices, MECLABS Co-Author of The B2B Refinery® [email protected] 409-770-0710 MECLABS.com ∙ MarketingExperiments.com MarketingSherpa.com ∙ StartWithaLead.com
StartWithaLead.com/LinkedIn
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