The Annuitas Group Blog

What Do You Mean When You Say That?

Several months ago I was meeting with a Director of Marketing Operations and we were reviewing their corporate lead qualification process.  As he explained how they qualify leads, I asked him if sales and marketing agreed on the definition of a lead.  He was quick with a “yes” and even showed me a document that listed all of the various definitions.  I was pretty impressed and pleased to see they had progressed to this level. 

My next meeting was with the company’s Director of Inside Sales.  During the course of that conversation, I made mention of the shared lead definitions that they had developed together with marketing.  He responded with “What definitions?” 

This is a scene that plays out all too often with companies:

• Marketing qualifies leads based on their view of the world
• Marketing sends what they define as “qualified leads” to sales
• Sales rejects them, saying they are not qualified

This scenario serves to underscore the importance of Lead Qualification as part of Lead Management. Lead Qualification will be the focus of this 4th post on Defining Lead Management.

Most B2B marketers qualify leads at some level.  However, few have taken the important step of developing and documenting a formal Lead Qualification Model.  Even fewer have developed a Lead Qualification Model jointly with sales. Yet research continues to indicate that companies that do indeed have a documented Lead Qualification Model achieve…

• Marketing and sales alignment
• A higher quality of lead being sent to sales
• Increased close rates
• Overall improvement on lead generation efforts

You don’t have to read too many B2B marketing blogs and websites to determine that “lead scoring” is a hot topic.  More and more companies are looking to implement Lead Scoring models, and the increased adoption of marketing automation systems provides an easy way to develop one.  However, rushing too quickly into developing a Lead Scoring model is putting the cart before the horse.  Lead Scoring is simply a numerical representation of your Lead Qualification Model.

Building and automating Lead Scoring without first building a Lead Qualification Model is like framing a house without blueprints.  If you want to improve your Lead Generation results, then you must first create a Lead Qualification Model. 

The Lead Qualification Model starts with creating Lead Qualification Definitions. In this phase, seek to include all phases of the buying cycle:  Inquiry, Response, Lead, Prospect, Marketing Qualified Lead, Sales Accepted Lead, Sales Qualified Lead Closed Deal, etc.  Conduct joint sessions with marketing and sales to develop and agree to definitions for each of these terms.

Next, develop a profile of your ideal customer.  This is also a joint effort between marketing and sales.  Determine what quantifiable traits make up the ideal customer.  Criteria such as size, location, industry, audience, etc. should be identified and documented.  Once you have the customer profile developed, use the same criteria to develop an ideal prospect profile.  These profiles are the basis of your overall qualification model.
 
Once the definitions and profiles are confirmed, proceed to working to define the criteria that should be used for Lead Qualification. This too is a joint exercise between marketing and sales. The objective is to create standards that will allow everyone in the organization to identify when a lead should be qualified for routing to sales, which leads should be nurtured and which leads should be discarded.

It’s only after these steps are complete that you should begin to develop the Lead Scoring Model (assigning numerical values).  This is where you apply numeric point values to BANT criteria (Budget allocation, Authority or role in the decision making process, Need for product or solution, Timeline), criteria used from your customer and prospect profiles, and behavior or interactions of the buyer. Behavioral components include items such as the number of campaigns prospects respond to, what events they are attending, what assets they download, etc.

So you see, Lead Qualification is more than Lead Scoring. It’s a systematic, defined process developed jointly by marketing and sales.  Companies that develop this kind of Lead Qualification Process as part of their overall Lead Management strategy significantly increase their ROI on marketing and sales activities.

How Much?

According to a Sirius Decisions study, more than 52% of B2B marketers claim that lead generation is their biggest challenge.  This is a staggering statistic!  Lead generation is one of the key aspects for which marketing is responsible.  Yet more than half say it is their biggest challenge. Why is this?

Perhaps one reason is that most marketers don’t have any idea what their goal is when it comes to lead generation. If you don’t know what success looks like, how will you know when you achieve it?  The study conducted by Sirius Decisions indicates a missing element in most B2B marketing organizations: Lead Planning.  As part three of our series in “What is Lead Management?”  we’ll look at the value of Lead Planning within the Lead Management framework.

Most organizations would agree that one of the major roles of marketing is lead generation.  But it’s also true that most marketers don’t plan for what happens once the lead is generated, i.e. how each lead should be managed.  When it comes to lead management, most are charting an unknown course. A well-oiled lead management machine will help marketers  stay on track.  And Lead Planning has to be one of the first aspects of the overall Lead Management equation to be worked out.

When it comes to Lead Planning, most marketing departments cannot answer questions such as…

• What percentage of quarterly sales revenue (in terms of leads) is marketing responsible for?
• How many leads does sales need to ensure they hit revenue targets?
• How many overall responses need to be generated in order to arrive at the required number of qualified leads?
• At what rate are we converting
  - Responses to leads?
  - Leads to sales?

The most effective way to answer these and other questions is for marketing and sales to come together  and discuss.  During this all-important step of collaboration with sales, seek to determine the following:

• Overall sales revenue quota (quarterly, annual, etc.)
• The percentage of revenue quota assigned as “marketing  generated”(in other words, what percentage will marketing be responsible for?)
• Average Sales Price (ASP) per product or service
• Conversion rates through the buying cycle.  At minimum, determine the rates for converting…
  - A response to a lead
  - A lead to a marketing qualified lead (sent to sales)
  - A marketing qualified lead to a closed deal 

Once sales and marketing has come to agreement on the conversion rates, marketing now has the data it needs to determine the number of responses and leads it needs to generate. By working backwards from the revenue number, marketing can have a clear picture of what needs to be accomplished.

Look at the following example:  

• A company has a quarterly sales quota of $25M. 
• Marketing is responsible to generate 40% of that quota. So, marketing is responsible for $10M of quarterly revenue.
• The ASP is $50K. So, marketing needs to deliver enough leads for sales to close 200 deals.

Marketing now knows what it has to deliver.  However the work is not completely finished. Marketing still needs to determine the number of marketing qualified leads needed to close 200 deals.  This is a different way of looking at things for most organizations. Traditionally, marketers have focused on filling (or even “over filling”) the top of the lead funnel with responses in hopes they will eventually translate to sales.  However the process based Lead Management approach forces marketing to look downstream at marketing qualified leads, a measurement more closely tied to revenue.

Continuing with the example above, marketing now knows it needs to deliver enough marketing qualified leads for sales to close 200 deals.  Here’s where the work on determining conversion rates comes in: 

• Working with sales, marketing has determined that the sales close rate is 33% on marketing qualified leads.  So, in an ideal world, marketing must deliver just over 600 qualified leads so sales can meet the quota.
• However, marketing and sales have also determined that sales only accepts 80% of marketing qualified leads.  So, that means marketing must now provide 750 marketing qualified leads to sales.
• Moving further up stream, marketing and sales have determined that 40% of all responses convert into marketing qualified leads.  At that rate, marketing now knows that 1,875 responses must be generated in order to meet their goal for marketing qualified leads sent to sales.

Going through this exercise (especially the first time) may take significant time and effort.  However, if marketing truly wants to deliver value to the company, it must be done.  Knowing and tracking these numbers on a regular basis will alleviate a great deal of the pain that most (52%) of marketers feel.   It is virtually impossible to track success or failure if you are not clear on the goals and targets. Marketers who try to do so are simply flying blind.

Data in the Lead Management Equation

A few weeks ago we began the discussion about lead management, what it is and what it is not (See “Much More to It” – October 15th). This is the second post in the series about defining lead management. In this post, we’ll look at the data process that’s needed for successful lead management. 

It should be no secret that the success of any marketing campaign starts with good data.  However many marketers are still struggling with keeping their data up to date.  Two questions that come up over and over again are “Where should I keep my data?” and “What data should I keep?”

Where To Keep The Data - Separating Marketing And Sales Data

Many companies hold to a common practice, using a single database to house customer and prospect data.  Typically, they use the corporate CRM system to do so, allowing both marketing and sales access to the data.  This approach is a poor way for organizations to manage their marketing and sales information.  I allows “too many cooks in the database kitchen”, creating an environment of chaos. 

The everyday reality is that sales and marketing each collect and sort information that that the other doesn’t need.   Yet many companies continue to operate by combining all data, which only increases the chances that it will become contaminated with inaccuracies. 

Instead of keeping all marketing and sales data in one place, best in class companies have moved to creating separate yet integrated marketing and sales databases.  Marketing maintains their data in a marketing automation application, and sales keeps theirs in the CRM system.  Keeping data separate but integrated allows each group to manage their information in a more focused way.  Integrating them allows both groups to share just the data that’s necessary for the other to be effective.  For example, marketing doesn’t need to know about every contact made by sales to a customer, and sales shouldn’t be interested in all the contact names from a purchased list.  Yet, when a prospect from a purchased list becomes a lead that sales needs to follow up on, integration can allow marketing to alert sales, and pass on the appropriate information.

Business rules should be put in place for both marketing and sales so that the integrity of the data can be maintained.  For example, rules should be developed to determine…

• Who will be able to change  and append data
• The frequency at which the data will be updated and appended by a third party (data hygiene)
• What fields will be synchronized between the marketing database and sales database

Whatever rules and agreements you develop, it will be vital to your lead management success to have them documented and adhered to by both sales and marketing.

What Data To Keep - Data Profiles

In order to develop communications targeted to your prospects, it’s imperative to have as much data on them as possible. The B2B buyer continues to change and become more complex.  Marketers must understand that communication can no longer be conducted in mass.  Conversations must be in a 1-1 context to effectively build and develop the relationship with the B2B buyer.  The first step in accomplishing this is to begin the data profiling process with the goal of creating an ideal customer/prospect profile.

So, how is this done?  The first step is to make sure that marketing and sales come together to participate in developing the profile.  Then, together, determine exactly what criteria and information will make up the profile.  Find the answer to questions such as, “How do I know if a prospect is good, medium or bad?”  Next, compare your criteria to your current data, looking for similarities and consistent attributes such as revenue range, common verticals, buying patterns, etc.  Build those into your profile.   Also, remember that the profiling process is a continual practice, not a “one and done” endeavor.  As you continue to communicate with your prospects and customers, collect more and more information.   As your profile is built, you’ll be able to use it as your “filter” for targeting prospects, and for marketing to and cross selling your customer base.

Data is the key.  Good data is the key to success; bad data is the key to failure.  Taking these and other steps toward solid data will help you achieve success.

Much More To It!

Lead management continues to be written and spoken about by thought leaders and vendors throughout the marketing world.  Many automation vendors have gone so far as to say that they provide lead management software.  While the articles and papers have provided good content, the majority seem to be addressing only a few pieces of the puzzle.  The prevailing thoughts points out that lead management is primarily lead scoring and lead nurturing.  But as important as these elements are, they only make up a portion of the entire lead management process.

In this first in a series of blog posts, I will seek to identify and describe the practice of lead management and all of its components.   This first post will provide a summary of each component, and subsequent posts will elaborate on each component in detail.

So, what exactly is lead management?  In short, it’s the PROCESS of receiving, qualifying, routing, and closing sales leads. Companies looking to develop and implement a holistic lead management practice must include the following elements to ensure a fully developed process:

• Data:  Marketing and sales data should be appropriately segmented. Data should be managed effectively to ensure integrity.
• Lead Planning:  Questions such as “How many responses, leads and qualified leads are needed from marketing in order to allow sales to meet their revenue goals?” should be asked, answered and documented.
• Lead Qualification:  A written definition of a qualified lead should be developed.  And marketing and sales should come to agreement with this definition, as well as other terms used in the lead management practice.
• Lead Routing:  Process mapping to determine how qualified leads will be routed to sales and how sales will send not-ready-to-buy leads back to marketing must be developed.
• Lead Scoring:  A numerical ranking system must be developed to aid in determining the point at which leads will be sent to sales.
• Lead Nurturing:  A documented plan for all leads that don’t immediately go to sales must be enacted.  This included processes for what will be done at both the marketing and sales level to engage and build a relationship with prospects and customers.
• Metrics:  Determine what to measure and why it should be measured. From there, implement a plan on how to utilize these metrics for shaping future marketing and sales planning.
• Automation:  All of the above should be automated as much as possible to ensure there are no cracks in the process.

So, as you can see, Lead Management is more than just nurturing and scoring.  It’s a cohesive process filled with several components that each affects the other.  Diminishing the importance of any one of these components could negatively disrupt the entire process.

One more thought:  As the development and implementation of these components are considered, it must be stressed that they cannot be created and implemented by marketing only. Sales must be part of the discussion.  The sales team has much to offer, and their valuable input will serve to speed adoption and buy-in. 

Check in next time for an in-depth look at lead management data.

Human Element of Change

A few weeks ago a client asked if I would make a presentation to their sales staff. The subject of the presentation was the lead management process changes we had made at their company after implementing the Silverpop Engage B2B Marketing Automation Solution.  The changes that were made were put in place to improve lead quality, make marketing more effective and ultimately help sales become more productive.

During the course of the presentation I was able to show the sales reps how these changes would benefit them, how they would have more insight into the leads they would receive, and how they would potentially be able to increase their sales numbers.  Sales management backed up my presentation by letting the reps know that they had been part of developing the new process and that they were excited about the forthcoming changes.   It was not long into the discussion when the reps began asking questions.  One rep seized the opportunity, leaned over to a colleague and said loud enough to be heard “but this is NOT how we currently do things.”  And there it was . . . the fear of change!

Most people do not like change.  Most will balk when presented with the challenge to do something different. And even though process changes and implementing automation will improve sales outcomes and marketing effectiveness, many a sales/marketing executive don’t see that as a big enough benefit to warrant changing their behavior.   So, it’s important to understand that the component of human change management cannot be overlooked when it comes to developing new processes and implementing new technologies. 

Organizations that decide to develop or improve their lead management processes to become best-in-class marketing and sales organizations need to prepare for the inevitable initial resistance.  One way to reduce the resistance is to make sure that BOTH sales and marketing are part of developing the new processes.  Doing so will allow them to endorse the process and lead the way in their respective organizations as evangelists.  Conversely, companies that embark on process change via a one-sided approach (sales or marketing only) will experience an uphill battle when introducing the changes, and will risk not having long term effectiveness.

Gartner Interviews The Annuitas Group

How to Improve Lead Quality
By Richard Fouts
http://blogs.gartner.com/richard-fouts/2009/07/30/how-to-improve-lead-quality/
 
It’s tempting in any economy, but especially one where demand is soft, to cast a wider net in hopes of generating more leads. But with sales costs soaring, it’s more important than ever to keep lead quality high. Nothing can burn dollars faster than chasing down unqualified opportunities.

In this interview, lead management consultant Carlos Hidalgo of The Annuitas Group talks about several best practices in managing lead generation - from how lead quality can close the gap between marketing and sales - to when and how providers should get serious about lead scoring.

Interview with Will Schnabel, Silverpop VP of International Markets

This month marks the three-year anniversary of the partnership between The Annuitas Group and Silverpop. Starting back when Engage B2B was known as Vtrenz up until now, the partnership has taken on many forms, but we have been fortunate enough to work a great company, who has great solutions and understands the values of solid process.

I had the opportunity to recently speak with Will Schnabel, Silverpop’s Vice-President of International Markets and ask him a few questions about the partnership over the last few years.

 

AG:  From the Silverpop perspective, please provide a brief overview on your relationship with The Annuitas Group.

 

WS: Having met Carlos and Jay back in 2006, it was clear from our first meetings that both Silverpop and The Annuitas Group had a similar approach to serving the needs of B2B markers. We quickly connected on the concept that it takes more than just innovative technology to solve the day-to-day challenges of a marketing professional and agreed that the right process can either make or break a successful marketing automation implementation.  

 

From the beginning, we have worked closely to ensure both organizations understand and trust the other as we go to market.  The trust factor is, in my opinion, one of the biggest hurdles in any partnership relationship.  To build trust takes time, and The Annuitas Group understood this, and spent the time necessary to become both experts in the technology, but also in understanding the people and process behind the technology.  They are one of the few organizations that I’ve seen that effectively marry the capabilities of technology with the process and organizational change of the marketing organization.  They are strong marketers themselves, but have a great ability to facilitate and explain new concepts in a way that clients can understand.

 

AG: What value does the process development work that Annuitas provide bring to the Engage B2B customers and prospects?

 

WS:  EngageB2B is a key technology enabler for modern lead management. However, in order to gain the highest benefit from the solution, marketing organizations should look to adjust their current business practices and approaches (i.e. campaign approaches, lead definitions, rules of engagement with sales, etc).  By looking at implementations as more of a change initiative rather than just moving to a new tool, clients derive an even higher return on investment and long-term success. The correct process development can help to optimize the technology capabilities by working within the boundaries of the solutions. Rather than working in a vacuum, The Annuitas Group has a strong understanding of the EngageB2B solution and can develop processes that make best use of key features within our solution bringing a better experience to our customers.

 

AG:  What role do you believe process has in the future of marketing automation and lead management?

 

WS:  I believe that there will be continued emphasis on process best practices around B2B marketing and sales.  Without companies like The Annuitas Group to fill a much needed void, Marketing Automation could go the way of CRM solutions of the 80’s and 90’s . . . . big promises, but mediocre results.

 

AG: As the market continues to grow in the understanding of the need of marketing automation and process, what value do you see in the partnership between Silverpop and The Annuitas Group?

 

WS: The Annuitas Group partnership allows us both to focus on our core strengths, while at the same time sharing knowledge and insights into the best process, technology and organizational changes necessary to gain lead management excellence.  The more marketers look at lead management and marketing automation as a process change program, the better results they will see, and the more strategic our relationship with them becomes.  Ultimately, lead management is a journey, and The Annuitas Group act as our clients ‘guide’ to understanding where they are today, and where they want to be in the future.

We look forward to continued success in this partnership and delivering this kind of value to our customers.

One Half Down...

We all know the old adage “if you can’t beat ‘em, join ‘em.”  While in some circles that may be true, in the world of marketing and sales “if you can’t beat ‘em, complain about them until it seems like you are beating them” seem to be a more common sentiment.

Yes, the ever present gap between marketing and sales isn’t going away. It continues to plague a number of companies.  For example, 59% of attendees at this year’s Sirius Decisions Summit said they do not believe their marketing and sales teams are aligned.  Another of the many statistics that indicate the great divide between marketing and sales.

In thinking this through and even writing about it in the past (see We Don't Talk Anymore! – June 2008) I have come to believe that lack of alignment between the two groups is not really the core issue.  Lack of alignment is only a symptom of a greater problem.  The fundamental problem that creates the misalignment is lack of process.  Marketing and sales groups are misaligned because they lack common understanding, definitions and protocols.  As a result we have a modern day Tower of Babel in most organizations with each group speaking their own language and following their own plans, regardless of what the other thinks.

The first half of 2009 has already passed us by.  If you want to improve the value of your marketing and sales investment for the second half, start now by looking at any broken marketing and sales processes that currently exist.  Bring marketing and sales together to identify the gaps and fix them. Develop a process based approach where common terminology and standardized methodology is used.   Do all of this and perhaps by the end of 2009, you’ll be poised to hit 2010 with an aligned marketing and sales team that will lead to greater productivity.

The Best Practice Mamba

It goes without saying that following or adhering to lead management best practices is a good rule of thumb, especially when you want your marketing and sales organization to be top-notch.  Adhering to lead management best practices will help companies achieve tighter alignment between marketing and sales, improve lead conversions and ultimately improve revenue.  However, a word of advice:  make sure that you don’t fall into the trap of implementing best practices without a thorough understanding of your company’s unique culture and environment.  Best practices are developed to be used “across the board”, and often “tweaking” them to fit into a specific company situation is needed. 

Let me give an example.  One of our clients wanted us to develop and implement a best practices lead management process that included lead qualification and lead scoring.  We went through the disciplines of reviewing their products and services, developing a customer profile, and segmenting their database.  We then developed qualification and scoring criteria based on all of the above.  When we tested the lead scoring model, it failed.   Why?  Well, not because there was anything wrong with the model per se.  It failed because a lead scoring process applied to their complex selling model was creating more confusion than clarity.  So, instead of forcing the model, we opted for a detailed “rules based” qualification process that yielded the sales team the highly qualified leads for which they were looking.

Often times marketing and sales executives become so enamored with “best practices” that they fail to see the forest for the trees.  They seek to adopt a new process without any regard for their under riding corporate culture, their relationships with their customer base, or their customer buying cycles.  As a result what was supposed to yield great benefit turns out to be a colossal failure.

Now you may be asking, “Shouldn’t best practices drive process change?”  Yes, in many cases they should.  But only when the case can be made that adopting the new practice will indeed improve productivity.  If it doesn’t, then alter the process, or abandon it altogether. No one wants a new practice if it’s not going to improve productivity or help to better achieve results.

Remember, adopting lead management best practices is a good thing.  Adopting the “best” best practice is even better.

SIRIUS DECISIONS SUMMIT 2009

Two posts ago I spoke about the Silverpop 2009 conference (See Silverpop Client Summit – 2009 – May 17).  In that post I also mentioned the 2009 Sirius Decisions Summit I attended.  Having finally dug out of being away from the office for two weeks, and being able to sift through the content and notes I had taken, I am now taking the time to briefly comment on it.

As is commonly known in the industry, Sirius Decisions provides some of the richest content available regarding sales and marketing alignment. At this summit they definitely delivered yet again.  From the Sirius personnel sessions to the corporate case studies provided, each presentation was an education on how to improve on marketing and making your marketing dollar count.

During these sessions though there was one theme that came up repeatedly:  the need for process. While there was talk of marketing automation, CRM, and other technology, by and large the prevailing theme was that process is key to success.  I couldn’t agree more!