Tuesday, September 25, 2012

Marketing Automation Not Just About Revenue (But it's Damn Important)

I've had the following conversation a few times with clients who have implemented marketing automation: "so now that we have marketing automation in place we want to do ROI reporting - TODAY". Jumping into ROI/closed loop reporting right away can be difficult. You need to have the right processes in place including a strong relationship between marketing and sales as well as a focus on revenue metrics to name just a few of the requirements. A recent report by the Lenskold Group and The Pedowitz Group backs this up. Don't try and do everything at once with marketing automation - create a plan that will lead to incremental success but don't stop with just simple automation. Improving your organization's overall reporting structure and focusing on marketing's contribution to top line revenue brings many added benefits.

Show me the ROI?

While companies that have implemented marketing automation demonstrate a higher adoption of ROI type reporting such as sales metrics and revenue metrics, the focus is still on cost efficiency metrics, engagement metrics, lead metrics and response metrics (see the right side of the chart below).

Source: Lenskold Group - 2012 Lead Generation Marketing Effectiveness Study

There is no question that there has been a tremendous improvement in the number of companies that are now using some ROI type reporting (4 out 10 companies according to this report). That said, the biggest improvements with marketing automation are seen in increased quality and quantity of leads. Ensuring that the marketing automation building blocks are in place including automated lead scoring and nurturing help generate trust with sales and the rest of the organization. This can help you buy the influence that is needed when trying to close the loop and gain more insight on leads after they move to sales - especially with the long sales cycles that we see with many B2B companies. ROI reporting requires marketing to create a unified lead management process with sales and to also have support from IT when needed.

Source: Lenskold Group - 2012 Lead Generation Marketing Effectiveness Study

Take it to the Next Level - It's Worth it

The bottom line is that it is worth it to get to ROI type reporting. Those companies that are using marketing automation and ROI metrics are seeing a measurable difference when compared to companies that don't use these similar metrics. For example, companies using marketing automation and ROI metrics have seen a 69% increase in marketing's revenue contribution. I would be rather a CMO at a company where I can demonstrate how my team is impacting sales and revenue growth then a CMO at the other company that has marketing automation but can't demonstrate top line revenue contribution. Marketing Automation gives you the tools to reach the promised land. If you can't see a clear path to get to ROI reporting, talk to your account team with the marketing automation vendor you work with - they should have marketing experts that can help.
Source: Lenskold Group - 2012 Lead Generation Marketing Effectiveness Study
Oh and if that wasn't enough, here are a few of the other key findings from the report for companies using ROI metrics to assess their effectiveness:

  • More likely to be outgrowing competitors
  • More likely to define their marketing as highly effective and efficient
There is no question that there is some tough roads ahead for companies that go down this path. What this report backs up is what I see every day. The companies that roll up their sleeves and go all in get the best results. This requires patience, determination and proper planning. Good luck to those going down this road and congratulations to those that are already reaping the rewards.

Additional Sources:

Wednesday, September 12, 2012

When Lead Scoring Will Fail

Reasons lead scoring fails
Having worked with B2B marketers for many years, it's typically a no-brainer when someone asks me "should we implement lead scoring?". Lead scoring, which is the process of automating the qualification of leads that you generate, is a key stepping stone to get marketers to the next level. Having said that, your company may not be fully ready for it and there are some steps to start moving in the right direction. Lead scoring can't be used as a band-aid for companies that have incomplete processes. I'll outline some items that will prevent your organization from a successful launch of lead scoring. I'm not saying that you need to nail all of these before you start down the lead scoring path. Lead scoring evolves over time. However, you should consider these items.

Top Five Reasons Lead Scoring Will Fail

  1. Not enough leads. I read a recent Marketing Sherpa article about a company that was able to produce some awesome lead gen results without a CRM or lead scoring. You can get away with this if your a small company starting out and your still ramping up your demand generation efforts. You really need a large supply of leads to justify lead scoring. Lead scoring is disruptive for organizations as your automating the prioritization of how leads should be followed up on. If there are not enough leads then sales or the tele-prospecting team will jump on every lead regardless of the best lead scoring system put in place. People need to make their quotas.
  2. There is no end goal. Lead scoring can't be something that you setup just to cross it off your marketing automation checklist. It must be setup with a goal in mind. Typically it has a dual purpose: it helps sales prioritize the follow up of qualified leads and it helps marketing determine the type of offers that should be sent as lead scoring is tied to the different stages of a buyer's journey. Possible goals can include increasing the velocity of leads through the sales funnel, increasing the overall revenue generated by sales, launching a specific lead nurturing campaign that is geared to leads with a low lead score etc...  You also should consider the emotional side (have you read Switch?)- making sales people happy and giving more power and respect to marketing. These aren't as flashy to the CEO but they make things more enticing for both sales and marketing. Besides winning a Markie (special award for marketers), the biggest award I've seen given to a marketer was receiving recognition from the sales team of a job well done.
  3. Unrealistic expectations. Lead scoring at the moment is still not a science. It will not slice bread. It will not make your product more attractive. It will not generate more leads (it may reduce the number of leads). Many marketers and sales teams see it as the bright shiny toy on the shelf that they have to have. They think it will solve all of their problems. It won't. It will promote some great conversations and it can help you improve your lead generation engine but this will take time. Because lead scoring is not a science it will require some tweaking and fine tuning. Don't expect it to move mountains after a few days.

    I also see sales teams that want to take over the lead scoring discussions and build out very elaborate and complicated lead scoring models that use some of the traditional BANT criteria that sales teams have used for years to qualify leads. I don't recommend that lead scoring be used for that purpose and I'm not alone (See: Why BANT No Longer Applies for B2B Lead Qualification).  Automated lead scoring is best used or doing an initial qualification of leads that meet a minimal level of an agreed upon definition between sales and marketing of a "qualified lead: and then having a tele-prospecting team do further qualification to see if a real sales opportunity exists. At that stage, there are different tools that sales can use to determine if a prospect is really engaged or not.
  4. Too many lead scoring criteria at the beginning. I recommend using five criteria to track the profile of an individual (job role, industry, company size etc...) and five criteria to track engagement (recency and frequency of web visits, social media activity, email responses, form completions etc..) to start off with. Test out the criteria and see if it's working after three months. You may find that you can add some additional criteria based on discussions with your sales team. Build in a schedule for a regular review of your lead scoring criteria.
  5. Not enough data. I still help review about one lead scoring model each week on average and one of the biggest issues I see is lead scoring programs that are scoring on data points that don't exist. Your lead scoring criteria can't be created in a vacuum. For example, if your going to score leads based on industry, review your web forms to determine if you are collecting that data. Review your live events to see if you ask that question at booths and/or roadshows. The score is only as good as the data you are collecting. You may even require some additional data tools to clean your data and append additional information.

    In addition, you need to review your lead scoring model every 3-6 months to ensure that it's still producing enough quality leads. If you don't do this, sales will ignore the lead score and you will be back to square one.
Another  top reason that lead scoring typically fails and a common thread through these five items is the lack of alignment between marketing and sales. These two teams need to work together and have common goals to get the most out of lead scoring. I have seen lead scoring work when the end goal was to help marketing segment their database and serve up different pieces of content but you can only get so far without having a good relationship with sales. The success of your business depends on a close tie between these two groups.

This is not meant to discourage you but it's something to keep in mind when thinking about a lead scoring project. Many companies I work with will concentrate on getting their database in order first as well as creating nurturing paths to help enrich their database before tackling scoring. It comes down to your priorities.

Articles to consider: Lead Scoring Has Drastically Changed – How do You Measure up?

Image courtesy of Beachhead Marketing


Monday, September 03, 2012

Improving Your Upsell/Cross Sell Conversions

I was recently asked about approaches to take for creating a cross-sell nurturing program - what are the best practices? I could highlight a few examples of some well crafted emails and messaging but getting a good conversion rate goes well beyond a good email design and an engaging call to action.

Amanda Hinkle wrote a great a simple yet powerful article over at MarketingProfs "Three Cross-Sell and Up-Sell Tactics to Improve Email Marketing Results". Her first point "Take Advantage of Available Data" really hit home with me. If you have a marketing automation tool that can track the digital behavior of your web visitors, then you can review which pages your customers have visited on your website. Take a first pass at some of the products your looking to cross sell to existing customers and review which customers of other products have browsed those pages. That simple step can provide you with a seed list for contacts to add to your first cross-sell campaign.

You can also rely on traditional methods such as truly understanding the sweet spot of who buys your products and looking for similar customers in your database. Try this - instead of just firing off campaigns to anyone who matches your criteria, start with those who are actively engaging with you. This includes those that are responding to your emails, visiting your website regularly and/or agreed to be customer advocates (references). Segmenting based on behavior has proven to be a major contributor to marketing success,

A lot of this all comes down to data - start small and focus on who you are targeting. The list and not the email creative is more important in executing a successful campaign. Thoughts?



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