marketo's secret sauce for revenue - a practical case study [#demandcon]

Marketo Secret Sauce for Revenue:A Practical Case StudyA Practical Case Study

J Mill VP M k ti g d C F d M k tJon Miller, VP Marketing and Co-Founder, Marketo

Author of Modern B2B Marketing blog

© 2011 Marketo, Inc.

Fastest Growing SaaS Company

SalesforceSuccessFactorsO iOmniture NetSuiteConstant ContactTaleoMarketo

Year 0 Year 1 Year 2 Year 3 Year 4All revenue numbers normalized to Marketo Year 1

© 2011 Marketo, Inc. Marketo Confidential and Proprietary

Highly Efficient Revenue Engine

90 cents in Marketing for every $1 in Sales80% of revenue directly sourced by marketing$1.2M annual recurring revenue quota

Productivity (1‐year New Customer Bookings / $M+S )

1 00

1.50

2.00

0.00

0.50

1.00


Q3‐08 Q4‐08 Q1‐09 Q2‐09 Q3‐09 Q4‐09 Q1‐10 Q2‐10 Q3‐10 Q4‐10 Q1‐11 Q2‐11 Q3‐11 Q4‐11

Buying Has Changed Forever

OLD DAYS: INFO SCARCITY1960s – Recent

TODAY: INFO ABUNDANCE

BUYER

SALES REP SALES REP

© 2011 Marketo, Inc. Marketo Proprietary and Confidential

Marketo’s Revenue Cycle

MQL

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NurturingNurturing Database

Marketing SDR Sales

Marketing SDR Sales



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Marketing SDR Sales

Names are just names.

Marketing SDR Sales



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Marketing SDR Sales

Meaningful interaction with us.

Marketing SDR Sales



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Marketing SDR Sales

Qualified, engaged potential buyers.

Marketing SDR Sales



MQL

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Marketing SDR Sales

Showing buying signs or significant engagement.

Marketing SDR Sales



MQL

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Marketing SDR Sales

Qualified as sales-ready by a human.

Marketing SDR Sales



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Marketing SDR Sales

Marketing SDR Sales


Benefits of Content Marketing

Risk Reduction

SEO

Social

Scoring

Popular Blogs Definitive GuidesResource Center Marketo TVWebinars


Content: When To Ask For Registration

Early Stageh h l d hi d bThought leadership and best practices to build brand and awareness

Middle StageBuyers guides, RFP templates and y g , pindustry information to help structure research

L t StLate StageCompany‐specific information to help evaluate and reaffirm l ti

selection


Short Forms Outperform Long Forms

Short (5 fields)Conversion: 13.4%

Medium (7 fields)Conversion: 12.0%

Long (9 fields)Conversion: 10.0%Conversion: 13.4%

Cost per: $31.24Conversion: 12.0%Cost per: $34.94

Conversion: 10.0%Cost per: $41.90


Problems With Self-Submitted Data


Marketo Prospect Generation 2H2010Velocity Lead toSource Prospects Cost % Lead Velocity(Days)

Lead to Opp Index

Trade Show – Virtual 3,793 $25.44 17% 81 1.03rd P t E il Bl t 3 302 $34 65 18% 43 0 53rd Party Email Blast 3,302 $34.65 18% 43 0.5Trade Show 2,703 $221.30 23% 61 1.9Paid Webinar 1,760 $68.50 21% 60 1.0PPC 990 $158.10 45% 42 1.4Content Syndication 536 $82.84 12% 59 0.3Other Paid 208 $187 50 13% 93 1 3Other Paid 208 $187.50 13% 93 1.3Website 2,871 58% 27 2.6Sales Prospecting 1,888 26% 46 2.2Partner Co‐Marketing 903 17% 102 1.1AppExchange 353 78% 37 3.4Referral 80 36% 12 1 0

Referral 80 36% 12 1.0Other Inbound 370 100% 19 9.0


Why Lead Nurturing: Stay in TouchBuilding relationships with qualified prospects regardless of their timing to buy, with the goal of earning their business when they are ready.

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“The art of maintaining permission to stay in front of your buyers as they educate themselves”

of your buyers as they educate themselves


The Value of Lead Nurturing

Marketo ROI Results

Fast Leads( MQL <1 mo)

Slow Leads(MQL >1 mo)

Total Leads (MQL)

Cost / Lead (MQL)

WithoutNurturing 20% 6.67% 26.67% $206.00

WithWithNurturing 20% 20.0% 40.0% $137.50

Source: Actual Marketo data; assumes $55 per prospect

Results: 50% more marketing qualified leads from lead nurturing


Lead Nurturing Relevance

1 2 3Stages

1. BUYING STAGES• Early (Pre‐MQL)

A

y ( Q )• Mid (MQL)• Late (Opportunity)• CustomerB

C

• Customer

D 2. BUYING PROFILES• Industry: 82%• Role: 67%• Company Size: 49%

• Company Size: 49%• Geography: 29%


Content - Don’t Panic!

1 2 3Stages

A

1. Short content is good! (YouTube)B

C

2. Reuse and repurpose3 Stay ahead of the drip

D

3. Stay ahead of the dripStart small, think big and adapt quickly


Other Kinds of Lead NurturingAccelerators

Move prospects along the buying cycle faster with relevant “nudges” gtriggered by specific behaviors

RecycledRecycledKey driver of messaging in active recycling is the reason for disqualificationLimit number of reasonsLimit number of reasonsTimeframe of months or quarters

R i dReconstitutedAKA “Wake the Dead”Great place to experiment

p p

© 2011 Marketo, Inc. Source: SiriusDecisions

The ROI of Lead Scoring

How Easy Is it To Get Information About Prioritizing Sales Efforts?

Other Benefits of Fewer But Higher Quality Leads

• Higher Win Rates• Shorter Sales Cycles• Higher Revenue Per Rep


Source: CSO Insights

A Framework for Lead Scoring

Explicit InfoWhat the prospect tells you

Inferred InfoWhat you observe or inferWhat the prospect tells you What you observe or infer

Fit • Demographics• Data quality• Corporate vs. personal

Are you interested in them?

Demographics• Firmographics• BANT

email• Inferred from IP (geography, ISP in them? (g g p y,domain)

Interest • Latent behaviors Are theyinterested in you?

• BANT(engagement)

• Active behaviors (sales readiness)

in you? )

© 2011 Marketo, Inc. All Rights Reserved

Interest Scoring - Examples

• Early stage content +3• Early stage content +3• Attend webinar: +5• Visit any webpage / blog : +1• Visit careers pages: ‐10Visit careers pages: 10

• Pricing pages: • +10 regular +15 detailed+10 regular, +15 detailed

• Watch demos: • +5 overview, +10 detailed

• Mid‐stage content +8


• Late‐stage content +12• Searches for “Marketo” +8

Closed Loop Refinement: Top Behaviors


Identifying Marketing Qualified Leads

21+ Super‐Target Lead Lead LeadTarget

9‐20 Target Lead Lead

Fit

2‐8 Other Lead

<2

Engagement <20 20‐44 45‐89 90+st Engagement <20 20‐44 45‐89 90+

Buying Intent <6 6‐14 13‐23 24+Interes


The Marketing-Sales Handoff (SDRs)

Best place for dramatic improvements in business performance are handoffs between functionsBenefits of a Sales Development functionBenefits of a Sales Development function Faster, more consistent, & better quality follow‐up on leads Better economics The human touch enhances lead nurturingg Better data and more metrics Talent development for sales

No Lead Left Behind

Day 0 Notification

Day 1 In untouched, reminder

Day 2 If untouched, reminder cc boss

Day 3 If untouched, alert executives

Day 7 If stale, reminder

Day 8 If stale, reminder cc boss

Day 9 If stale, alert executives


Sales Insight


Measuring and Proving Marketing’s Impact on RevenueRevenue


Revenue Cycle Modeler


Key topic areas:Key topic areas:• Balance• Flow• Conversion• Velocity

Filter/Drill into Trends over time

/data, e.g. by Program Type, Business Unit, Geography etc

Geography, etc.

Marketo Revenue Cycle MetricsNew Customers

($5,800)80% of all deals follow this model Lead to Sales Lead: 7%

Sales Lead to Opp: 80%Opportunities

130 / mo($2,000)

40% of prospects

pp1.4 people per Opp1,000 Leads = 40 Opps

Lead Type VariantsSource

Leads2,000 / mo($137.50)

4 0% / mo

40% of prospects eventually become a leadChannel

DivisionSize

20%Active Prospect

4.0% / mo 75%

Paid 9,500 / mo

Size

Prospects3,800 / mo¾ paid ($73)¼ unpaid ($0)

Active Prospect DatabaseNames

($29.33)

10%Unpaid

40%Inactive

80%

($55 average) 10%Names($0)

Inactive (Last 6 Months)

Conversion and Speed By TypeProspect to LeadProspect to Lead


Conversion Over Time

Predict conversions from one stage to another over time

Create plans / forecasts about futurep /

Marginal Conversion Cumulative Conversion

y = 50.749x-0.571

R² = 0.430140

50

60

70

y = 994.2x0.1352

R² = 0.95511 000 1,200 1,400 1,600 1,800 2,000

0

10

20

30

-200 400 600 800

1,000

3 13 23 33 43 53 63 73 3 13 23 33 43 53 63 73


Marketing Forecasts


Key Takeaways

1. Grow revenue by making sales more productive, not just by hiring more reps

2. Focus on the entire revenue cycle, not just the top of the funnelnot just the top of the funnel

3. Don’t contact a lead before its time

N l d l f b hi d / i l l4. No lead left behind / service level agreements

5 Use forecasting to turn marketing5. Use forecasting to turn marketing from a cost center into a revenue driver


Contact Me

Marketo, Inc.901 Mariners Island

JON MILLER901 Mariners IslandSuite 200San Mateo, CA 94404

VP Marketing

[email protected]@jonmiller2

Direct: +1.650.376-2310

blog.marketo.com

@jonmiller2

blog.marketo.comwww.marketo.com

Download the “Definitive Guide to Lead Nurturing”k t /d 2 l d t i

www.marketo.com/dg2‐lead‐nurturing
