the future of lead management

Brawn Brains+Marketing Automation Technology

Powered by Lead Management Specialists

A Step by Step GuideLisa CramerCo-Founder & PresidentLeadLife [email protected]

Changing Expectations: The Future of Lead Management

Whitepaper

Brawn Brains+Changing Expectations: The

Future of Lead Management

Table of Contents

The legacy lead management process and its effects on business.........................................3

Marketing effectiveness..................................................................................................4

Sales effectiveness.........................................................................................................5

The costly buying shift.............................................................................................................6

Marketing shift................................................................................................................6

Sales shift.......................................................................................................................8

How to start..............................................................................................................................9

Changing expectations.......................................................................... ................................10

Drive additional revenue................................................................................................10

Reduce sales costs.......................................................................................................10 ROI of lead generation dollars.......................................................................................10

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The legacy lead management process and its effects on businessThere are obviously many processes within any given business, some running more efficiently than others. The reality is that most processes are not formally structured ahead of time; rather they often develop as businesses mature over time. In many areas of business, processes have been studied, re-engineered and re-implemented to maximize operations. This is most commonly found in areas such as inventory control and accounting.

Inquiries/Suspects

Conversions

Sales Ready Leads

QualifiedOpportunities

Closed Sales

Sales

However, in many businesses today, the marketing to sales process - or more specifically the lead management process - is ignored, even though it is highly ineffective and extremely costly.

When we refer to the lead management process we really are describing the process that occurs from the initial attempt to generate a lead to the time that lead results in revenue attainment. This process spans the top of the funnel where inquiries and suspects pour in and are then nurtured into opportunities and closed sales. What’s quite interesting is that even though this process directly affects revenue as much, if not more, than actually hiring more sales reps, it usually has not had a thorough assessment of its efficiency or effectiveness.

Most often the marketing and sales disciplines span multiple departments. Therefore the elements of lead management within each discipline may be efficient, but the entire process which spans both departments is not. And when you look at the amount of money spent on lead generation (and really all demand generation) and the money spent on maximizing the sales team’s effectiveness, it’s incredible that this hasn’t bubbled up to the top of every CEO’s agenda.

Understandably up to now, companies have concentrated their efforts strictly within the sales discipline, focusing on the sales process, team and methodology, which are all critical to overall sales success.

Email | Adwords | Banners | Webinars | Offline Events

While optimizing these components for your business are indeed crucial to high performing sales teams, they no longer are enough. With the buyer shift that has occurred (described in more detail below), the very beginning of sales – marketing – must also shift. In essence, the entire lead generation to revenue process also must shift.

Why?

What’s so ineffective with your current legacy process? This costly process has two main components which we will address:

o Marketing Effectiveness o Sales Effectiveness




Successful lead nurturing is not about sending emails out to everyone who filled in a form off your website or interacted with your company. Nurturing is about sending relevant content to your prospect based on who they are (title, industry, etc), what their interest is (based on digital behavior from your website, such as time spent on a webpage) and what phase they might be in the buy cycle (educational stage or evaluation stage).

The above criterion is ideal for a nurturing campaign, but you have to start somewhere. The end goal is to drive more qualified leads and more revenue. But no matter how mature your marketing department is at this stage, nurturing is critical for marketers who want to start maximizing lead generation budgets.

Back when email marketing first appeared on the scene it was enlightening just to understand who opened and who clicked on each email. These were the only digital metrics that could be tracked to determine interest and engagement. Additionally, when marketing started to drive traffic to websites and we were able to get inquiries to fill in a form to receive something of value (maybe a whitepaper), it was felt that signified real interest.

Well as information on the internet significantly expanded, buyers started spending more time online. It became apparent that it’s not enough to simply assume these metrics (opens and clicks) or actions determine interest. These days, buyers are doing a significant amount of online research and are reaching their own decisions based on the information they find on the Internet. Additionally, salespeople are getting involved much later in the sales cycle, putting more pressure on your online presence (website), on your marketing efforts, on your content and on your sales team than ever before.

Marketing EffectivenessMarketing effectiveness has many components within it, some of which we won’t address in this paper. What we will address are the following items:

o The ability to track and receive an ROI for lead generation dollars spent, o The ability to track metrics that are of value to the business; and o The need for marketing to take responsibility for lead nurturing

“68% of marketers wereunable to determine the ROI

of their initiatives." - CMO Council

“64% of Sales and Marketingexecutives are unhappy with

results derived from theirnurturing programs."

- Marketing Sherpa

When budgets are allocated and specific dollars are spent on lead generation efforts, it’s important to understand what determines the success of those lead generation efforts. How do you know whether lead generation dollars were used most effectively for your company’s growth?

In a vast majority of companies, we have found a truly antiquated approach. They either have no documented way of understanding whether their lead generation budget was used most effectively to help grow the company, or they are still using old metrics that don’t really account for the end result of revenue or even “sales ready” leads. They no longer are enough to determine lead generation success in today’s market.

In fact, a study conducted by the CMO Council found that 68% of marketers were unable to determine the ROI of their initiatives. How can a business apply money to initiatives where you can’t determine ROI?

If sales people are getting involved later in the process, then how do companies engage those prospects until they are ready to buy? They need to nurture those leads. The concept of nurturing is still new in most companies with the vast majority of nurturing still being done by the sales team.

As a matter of fact at a recent Sales 2.0 conference, it was stated that 72% of nurturing falls under the responsibility of the sales department. And Marketing Sherpa research found that 64% of Sales and Marketing executives were unhappy with the results derived from their nurturing programs.




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When you understand the money spent in the sales department and its associated return, it becomes easier to see why companies struggle to make their numbers.

Sales effectiveness also has many elements that we won’t address in this whitepaper, such as training, the use of CRM systems, sales methodologies and more. However, there are two areas that we will focus on which greatly impact the effectiveness of your sales teams.

o First, the unnecessary time spent by sales reps generating and nurturing “leads” instead of selling. Sales teams are spending 20% of their time generating leads (CSO Insights). Additionally, as stated above, in most companies the task of nurturing falls on a sales rep’s shoulders.

o Secondly, the lost revenue associated with sales reps spending time trying to cultivate low return inquiries and suspects versus high return leads could be substantial. According to MecLabs, only 4 – 7 raw leads per 100 are ready to buy. Now consider all the costs you’ve applied to your sales team and the waste having that expensive resource sift through all those leads just to get to that small number that might actually buy.

Companies, and their bottom line, would be better served if sales teams could focus their efforts on leads that have shown interest in the company’s products or services. For example, leads who have attended an event, clicked on an email or spent time on “important” pages on the company website. It would behoove the company if this lead generation and “warming” could occur within the marketing department (as well as with some other group such as inside sales), before the leads were sent to sales. Obviously sales teams need to feel confident that the leads from marketing can help them achieve their assigned quota. What would happen to revenue, and other critical financials such as revenue per rep, revenue per employee, etc., if we could make sales teams 20% more productive?

Not sure how it’s affecting your company? Check out some of these stats:

o According to a Gartner study on sales effectiveness, sales people spend fewer than 45% of their time actually selling. o According to CSO Insights Sales Performance Study, 2010, the majority of companies surveyed reported that their sales people are able to turn a lead into an initial sales discussion less than half the time. In order to drive the revenue needed, this early stage (initial sales discussion) of the funnel needs to have a higher conversion rate. Sales people need more times at bat, meaning they need more initial sales discussions with more leads.

o On average, only 50% of sales reps are meeting their quotas, according to the 2010 Inside Sales Metrics and Compensation Report

Sales Effectiveness

“Only 4-7 raw leads per 100are ready to buy."

- MecLabs

Let’s break each one of these points down further. According to CSO Insights Sales Performance Optimization Report, sales teams spend 20 percent of their time generating leads. That means that instead of focusing on moving qualified leads or Marketing Qualified or Sales Accepted leads (whatever your definition is) through the buying stages to revenue, sales reps are making cold calls to untouched leads, researching possible contacts and much more. Although none of those activities are bad, we are suggesting that the return on those items are significantly lower if a high priced sales person is spending that much time doing them – instead of selling.

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So you are probably asking yourself: Is this new? Why all of the sudden is this something that needs a close look? Could your sales and marketing operations be that ineffective? Well the answer is now that the majority of buyers do their research, investigation, evaluation and more online, our approach to marketing and sales has become outdated, and therefore, ineffective. The legacy approach of a lead being generated by marketing and handed off for sales to call is no longer effective, and not to mention incredibly costly. With the internet, buyers are now in control of the sales cycle, or more aptly, the buy cycle. They are equipped with the information, comparisons, reputations and more before they are interested in engaging a sales person for next steps. There are lots of ramifications to this buyer shift.

Not only are your prospects in more control over the buy cycle, but decisions are also getting slower. With the state of the economy, resources are scarce, evaluations are taking longer (also fueled by more information available via the Internet), more people are involved in decisions and CEOs, CFOs, and COOs are actively involved as financial purse strings are no longer disseminated down. So in the end there is even more work to sell a prospect than ever before, putting a greater burden on a sales person and their skills.

The Marketing and Sales Shift

The next section of this paper will outline how to shift your marketing and sales process to meet the needs of the buyer, thereby increasing marketing and sales effectiveness. Of course if you are happy with your current sales productivity numbers, your revenue per employee, revenue per sales rep ratios and marketing ROI, then I would suggest that a shift need not occur. But for the rest of us, a shift needs to occur to drive more net revenue.

The Costly Buying Shift

The Marketing ShiftMarketing really must change their approach and mindset. No longer is simple lead generation enough, where inquiries and suspects flow to sales teams. It’s not about the volume of inquiries and suspects – it’s about the volume of “sales ready” leads. If your marketing department/CMO is measured on the number of names that are in your lead database, you are certainly missing the mark. Marketing should be measured on quality – leads that turn into sales, not just the volume of raw inquiries. Remember the numbers above – only 4 – 7 raw leads out of 100 are ready to buy.

Take A Content Approach

To Marketing


“80% of marketers said theypass unqualified leads to sales."

- Marketing Sherpa

(1) Take a content-driven approach to marketing – It’s no longer enough to send out an offer and hope for the best – well at least not for complex sales, or any sale that is not transactional in nature. Marketing today is about providing value to the prospect, establishing credibility through thought leadership, understanding where the prospect is in the buy cycle, sending content that the prospect finds interesting, helping to move the prospect - when they are ready - through the buy cycle…. oh and doing all this digitally with the same limited resources available today.

Without getting into too much gory detail, the reality is that with the correct technology and strategy, marketers can absolutely do the above, maximizing their outbound and inbound marketing campaigns. Today, with the dearth of information available on the Internet, marketers must start understanding content marketing in order to keep up with the demands of their prospects.

This is a known issue among marketers themselves. A Marketing Sherpa study conducted in October 2010 showed that 78% of marketers listed generating high quality leads as their top challenge. And in a 2011 Marketing Sherpa study, 80% of marketers said they pass unqualified leads to sales.

How can marketing shift their approach to drive more qualified leads to sales, versus the volume of inquiries and suspects sent today? There are 3 primary changes marketing must start embarking on:

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(3) Be metrics driven – Marketing has not been traditionally driven off metrics, or should we say they haven’t been driven by the metrics that feed the bottom line of a company’s financials. The metrics that marketing has historically focused on are really about engagement. Simple opens and clicks on emails. Website activity is measured based on visitors, where they came from, where they go, how long they spend. But putting together this anonymous activity with purchase intent, and ultimately sales, can now be done with the enhanced tracking available with Marketing Automation technology. Now marketers have the ability to see the volume of leads they generated per campaign, the quality of the leads, the number that turned into opportunities and the amount of revenue. These statistics can then be compared to the amount of money spent per lead generation campaign, finally giving the company visibility into the return on their marketing investment.

Reach FurtherInto The Sales

Funnel

Become MetricsDriven


Segment Problem Recognition

Information Search

Brand Evaluation

Objections/Obstacles

Purchase Decision

Segment 1 Industry stats/reports

WebinarsWhitepapers

Blog

Case StudiesDatasheets

TestimonialsFree demos

PricingHow to get

started

Segment 2 Industrystats/reports

WebinarsWhitepapers

BlogCase StudiesDatasheets

TestimonialsFree demos

PricingHow to get

started

Move Your Prospects through the Buy Cycle with Relevant Content

(2) Reach further into the funnel – Instead of sales either spending time trying to nurture early stage leads or trying to make outbound calls to inquiries and suspects who won’t take the call, task marketing with reaching further into the funnel. Marketers should be handing off “sales ready” leads to sales. There are many names and methodologies for what this is (Marketing Qualified Lead, Sales Accepted Lead, etc.). Whatever you call it or whatever your process is, the reality is that marketing must start measuring the quality of their leads before promoting them off to sales.This definition of “sales ready” should be agreed upon by both marketing and sales – otherwise, it will be flawed from the start. Marketing can provide “sales ready” leads by taking responsibility for nurturing inquiries, suspects and unqualified leads until they are deemed ready.

Effective nurturing must be built on that first change that marketing must engage in - content marketing. Effective nurturing is about relevant contact. Relevance is based on what each prospect finds interesting. So, again with technology and a strategic process, marketers now can track digitally what leads are interested in, how often leads engage and when they are ready to move to sales. These same technologies allow businesses to set up business rules specific to their sales cycle, their products and their services, to automatically send leads to the sales team in real time, when appropriate. Additionally, the wealth of additional sales intelligence provided in the form of digital tracking (what pages a lead visits and for how long and over time) gives sales much more background on the lead’s true interests. Marketing should also be prepared to “rescue” leads that have been promoted to the sales team but haven’t gone anywhere in the sales cycle. They didn’t die (i.e. weren’t lost to competition) and they didn’t become opportunities on the forecast. These leads are considered to be “leaking” out of the pipeline. This leakage costs you money. Therefore a process and supporting technology must be established for these leads to be pushed back into marketing for additional nurturing and evaluation to see if they raise their hand again.

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Adapting to the buyer shift – Sales people need to adapt their style, sales process and knowledge to this new buyer shift. As described above, with the Internet providing so much valuable information to the buyer, often anonymously, the leverage has now shifted in the sales cycle. The buyer comes to sales when they decide they’re ready. The buyer now has researched and created their own foundation of need, value, options, etc. So, when the buyer approaches sales they have the preconceived notion of what they need, why and what your company can provide.

At this point, sales people need to be prepared and flexible in their approach to the buyer. Spewing the traditional feature/function pitch probably will not do. Sales must adapt to understanding what the buyer has shown interest in (often via their digital behavior), understanding how to use that information/intelligence when making the outbound call and utilizing that knowledge to their advantage.

Since sales people will be brought into the sales process later than they had been previously, they will most likely need to be much better prepared to answer tough questions. Today’s prospects will ask questions about how you compare to a competitor, ROI, business justifications, and much more. The sales person has to be more prepared to drive the conversation where needed. Because the reality is that your buyer is now much more prepared by the time they engage with the sales person.

Sales people will also need to adapt to warmer, higher quality leads but potentially less of them. This is particularly true if marketing “holds” inquiries and suspects that aren’t “sales ready” for further nurturing before putting them into the sales person’s queue. Sales management will have to adapt to measurements beyond number of calls (especially if that metric is not qualified by quality prospects and it’s just a raw number).

Lastly, sales cycles are extending. According to the 2010 B2B Sales Pulse Survey, 59% of respondents said their sales cycles were longer than the previous year. More people are involved in decisions and the C-suite is closely guarding the purse strings for even seemingly small monthly payments. More time and effort will need to be applied by the sales person to continue to stay engaged with opportunities, helping to move them through the sales cycle. This will give them even less time to engage with colder leads than ever before.

The Sales Shift


With all the tools available today, CEOs should expect marketing to provide an ROI for lead generation dollars received. They should expect marketing to understand the pipeline (particularly at the top of the funnel), and understand the changes that need to take place (from a marketing perspective) to make the numbers happen. Obviously there are components that need to mesh with sales. In these components of the lead process, both marketing and sales will need to work hand in hand to outline an effective process for the organization. A few examples of these components are: definition of when a lead is “sales ready”, the process for sending leads back to marketing for further nurturing and the process for re-promoting these leads back over to sales.

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Latent opportunities – As marketing starts working the nurturing process, sales teams will start receiving opportunities that have gone through the early part of the funnel. These opportunities could actually close quicker than previous leads because they have been effectively nurtured and moved through a number of stages of the pipeline – without even engaging sales.

However, it is up to the sales person to understand and take advantage of the new digital tracking and sales intelligence that is now part of the lead record when they receive it in the CRM system. Associated with each lead and/or opportunity, that now flows from marketing, should be information about what that lead is interested in. There should be information about what pages they viewed, what content they downloaded, what events they attended, what emails they engaged with and much more. That can all be used by the sales person as fodder for the outbound phone call to engage prospects. Additionally the sales person will be better prepared for questions or the later stage conversation that they have with the prospect. They’ll know (at least from their company’s marketing efforts) all the information the lead has read.



It’s not the objective of this whitepaper to walk through the definition of revising your lead management process. However, you do need to know that it’s do-able without completely disrupting your current processes or changing the entire culture of the organization. The most important criterion is to start small. Mapping out a strategy is essential, understanding what makes sense for your company is key, but work to implement these changes in phases. We all must deal with the reality of existing resources and limitations. Starting with a few critical components, you can make great strides towards the ultimate objectives. There are multiple strategies to start refining your lead management process for marketing, sales and the bridge between. Again, take it slowly. Maybe start with one department at a time, implement some of the phases, test the effectiveness, iterate until you get to your desired results and more on. There are organizations that can help guide you on this path and make it easier for you to do this effectively without potentially wasting time and resources trying to figure it out yourself.

Steps for ImplementationPart of the success will be your ability to take small, digestible chunks of a new process and implement them. Below are some specific items to consider. Set Realistic GoalsThe first step is to define some goals - short-term, mid-term and long-term. This way you’ll have some measuring stick to use as you progress. Short-term goals can be as simple as increasing click thrus or conversions of better targeted email campaigns. Or they could include implementing a nurturing component on an existing campaign and see what effect it has on quality of outbound calls. Get Sales Buy In – Maybe…In theory, you’d want to make sure you have sales buy-in before starting your implementation, however, the reality is sometimes that’s not going to happen. If not, don’t worry, you can implement marketing automation in phases. You can continue to send all the leads you do today to sales but with additional sales intelligence, alerts and other items that provide more information for warmer calls. Then as time progresses and you get sales buy-in, you can start sending only “sales ready” leads to sales. Identify Initial CampaignIt’s important to evaluate where to start. Where can you get some immediate value without consuming the entire marketing department or missing current planned activities? We have found this decision to be very company specific. It depends on what you are currently doing, and what you can facilitate moving forward. Some companies simply start by better segmenting and targeting their prospects with their e-newsletter. Some companies implement an approach to track and nurture in-bound leads from their AdWord campaigns. It’s important to keep it simple, yet focus on a benefit you can realistically achieve.

Lead to Sales Process ConsiderationsHow do you want leads to pass to sales – initially and over time - as you grow into your lead management process and system? Some companies choose to keep their process the same initially – for example – moving all leads to sales. Some companies choose to implement basic scoring and only move those leads to sales that meet a basic set of criteria. The important factor is to start simple, measure and adjust.

Metrics Now and LaterUpgrade your thinking about analytics and visibility to what’s working and what’s not. Now you can track not just opens and clicks but ongoing behavior and marketing effectiveness. Maybe you start by tracking the increase in conversions by campaign. Later you start tracking the number of sales ready leads generated by campaign and revenue by campaign. You’ll need to test, measure and refine.

Marketing automation systems aren’t a silver bullet. You can’t just implement them and hope they will work. They do require some planning and process to make them work. But don’t feel that you need to reorganize your entire organization to gain some initial value. Plan and implement in small phases and over time, there’s no question, you’ll start seeing the inherent benefits.

How To Start




It is definitely time for CEOs to have different expectations from marketing and more specifically their lead management process. The reality of today’s business environment is that metrics should drive your entire lead management process. This process can help ignite new business initiatives that drive revenue. And in the end full visibility and accountability should be applied. The following are three expectations CEOs can have when revising their lead management process:

Changing Expectations


Drive AdditionalRevenue

Drive Additional Revenue

Marketing can have a direct impact on revenue if they spend time and effort to implement a lead management process that drives better qualified leads to sales. This means that marketing needs to start accumulating data (tracking digital behavior and capturing lead information) about the prospect and driving interaction with the prospect. This gives marketers the ability to pass sales teams leads that have shown some level of interest in the products or services they offer. Marketing must also take on the responsibility to nurture leads who are not quite ready to buy. Instead of passing over inquiries and suspects straight from a website for sales teams to ignore or waste time with, marketers can nurture those unqualified prospects until they are ready to buy.

GenerateROI from Lead

Generation Dollars

ROI of Lead Generation Dollars

CEOs (and CFOs) often view the marketing department as a cost center, rather than a revenue engine, because they can’t quantify a return on investment. Marketing needs to start gaining visibility to additional metrics that go beyond traditional opens and clicks. They need to start tracking the number of qualified leads passed to sales and where those leads flow through the funnel into opportunities and sales. Marketers are often unable to gain that visibility due to a lack of systems and processes. Providing the technology (thereby visibility) and revising the lead management process should be a basic component of gaining ROI expectations.

Reduce SalesCosts

Reduce Sales Costs

Maximizing sales resources, or more specifically maximizing revenue per sales rep and revenue per employee, are two important metrics for any company. Marketing can directly help drive these numbers up by helping sales people focus their efforts on prospects that are most likely to buy, rather than spending their time calling inquiries and suspects that are either not qualified or not ready to talk to a salesperson. In today’s internet-driven society, most prospects gain some amount of information online without the “help” of a salesperson. With this digital behavior now available, marketers must take the responsibility of tracking those insights and interpreting them as best as possible to give prospects the information they need, when they need it. This digital behavior, coupled with additional data about the prospect, will help sales reps determine the best time to call these prospects. Additionally, sales teams will now have added intelligence available about the prospect when they make their outbound calls. This should make for a “warmer” call, helping to increase conversion rates and reduce time/costs that sales was wasting chasing unqualified prospects.

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