Dec 222009
 
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Hey TLOTL readers: I just posted a discussion question on Focus.com that needs your expert opinion. Bring your A game – A stands for Answer or Advice – and see what leading B2B marketers have to say.

Here’s the question and background (the link to the question on Focus is below):

Question: What are the main barriers to a successful deployment of a marketing automation solution?

Background: By most accounts, 2009 has been a breakout year for the marketing automation space. And while the category itself is not new, we now have a robust and growing ecosystem of vendor solutions, resellers, agencies, consultants, integrators, and marketers with deployment experience. However, as we discovered over the 10-year evolution of the Hosted CRM market, there are always hard knocks and lessons learned on the way to excellence. So as we head into 2010, let’s hear from those who’ve been there and done marketing automation: what are the key issues for marketers to prepare for (and overcome) when implementing a solution?

http://www.focus.com/questions/marketing/what-are-main-barriers-successful-deployment-marketing/

Note to readers: I recommend you answer this question on Focus. (While I’d be honored to see your reply posted in my blog comments, there’s frankly a much bigger audience and more robust conversation over on Focus.) Oh, and full disclosure for our friends at the Federal Trade Commission: I do some work with Tippit, the owner of Focus.com, as Head of their Tippit Consulting group. But promoting/endorsing the Focus.com web property is not part of the scope of my relationship with Tippit.

Dec 022009
 
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Many of us are familiar with the concept (used in manufacturing, software and numerous other business processes) of mass customization.

In my field – B2B marketing – an interesting manifestation of this concept is marketing automation software. This technology allows marketers to customize the manner (content, offers, communication channels) in which they engage a diverse audience of prospects, where each prospect is at a different stage of purchase-readiness. One of the more compelling features of marketing automation technology is how it enables marketers to gain insight into the types of “hooks” (content, offers, and channels) that engage the largest numbers of buyers over time.

Now, seasoned marketers know it is very rare that a *single* offer or piece of content is empirically proven to drive lead conversion or sales. And this makes sense when we consider the perspective of the B2B buyer. How many of us have ever – in a B2B buying context (Engadget salivations don’t count here) – read a single white paper or promotional offer and immediately committed to a purchase or even a conversation with a vendor? It happens, but not very often. Not often enough for marketers to bank on anyway.

So buyers consume a lot of information before they make decisions. And therefore, marketers who want to influence those decisions need to analyze lots of data about buyer behavior.

Among B2B marketers, most of the above is non-controversial. Much has already been written and said about how B2B buyer behavior has forever changed the role of marketing and sales. But there are several emerging and interrelated trends that have a bearing on where we go from here. I’ll loosely classify these trends as follows: high unemployment, tight capital/credit markets, personal branding, social networking, and low-cost/free, self-service publishing platforms (WordPress, etc).

The confluence of these trends is creating an effect that I’m calling “mass expertization.”

I don’t have a rock solid definition for mass expertization yet. For the moment, I’ll define it as a rapidly growing population of people, typically with commercial or status-driven agendas, publishing original content based on their experience.

Note that I’m not passing judgment on mass expertization. If I was I’d be judging myself since I’m one of the self-styled experts. I’m just observing it as an effect that has implications for producers, deliverers, and consumers of content.

For example, one noticeable result of mass expertization is that, increasingly, buyers are not looking to established media brands, analysts, or research firms to inform their decisions. Why should they pay (in dollars or time) for content from these traditional channels when they can “get the CliffsNotes” for free and instantly? Thousands of self-branded experts are hard at work publishing white papers, blog posts, videos, status updates and tweets to showcase their expertise to a worldwide audience. With the help of tools like RSS and TweetDeck, and sites like LinkedIn and Focus, buyers can efficiently consume this content as they move through the purchase cycle.

I’ll be writing some more on mass expertization in the coming months, as I believe it will be an important theme in the 2010 B2B marketing arena. There are many questions to consider for buyers, marketers, media firms, analysts, and experts. Here’s just a few to get us started:

How do buyers identify the good experts/content from the less good?
How do marketers turn the mass expertization effect to their advantage?
How do “old guard” media brands and analyst firms slow or stop the process of disintermediation?
And how do experts separate themselves from the masses?

Your thoughts and expertise are (of course!) welcome on these questions and this topic.

Sep 232009
 
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In one important way, the marketing department is a lot like college. How so?  Well, because, like college (as my mom once told me):  “it’s an expensive place to play.”B2B marketers (my background) are typically expected to invest an amount between 3 and 7 percent of revenues into marketing programs. Most of this budget is intended to drive new customer acquisition. Like most marketers, I take this responsibility seriously. And I have found through my consulting work that most B2B marketers share this sense of stewardship, and build frameworks to track and manage their portfolio of marketing investments.I have observed that a lot of companies have embraced Cost per Lead as a key metric in the management of their marketing portfolio. This measure can be useful in comparing marketing programs (and/or vendors) against each other provided that the definition of a “lead” can be applied equally to all lead sources.

But there’s the rub.

Having a healthy, diverse portfolio of marketing tactics means attracting buyers from different places, with different offers, and at different stages of the buying process. The fact that everyone filled out the same registration form on your web site (or that a vendor delivered a contact to you matching your lead capture requirements), does not account for this variety.

And so a portfolio management framework that is overly biased to driving down the cost per lead metric can work against you. To illustrate, consider this example:

Metric #1: Pipeline Dollars per Dollar of Investment

pipeline dollars per dollar of investment

pipeline dollars per dollar of investment

This comparison showcases why managing excessively to cost per lead can limit marketers’ ability to help sales build its pipeline. In this example, the leads from LeadSource B are a better value for the marketing investment. The leads convert at a higher rate, and the average deal size is also higher ($2500 vs. $1800). LeadSource B delivers a population of buyers that is further along in their buying process and has a larger budget, on average, than their counterparts from LeadSource A.

<soapbox> BTW, the word investment is used deliberately.  The antiquated term “marketing spend” is not only an example of poor message management (who wants to fund “spend” in this climate?) but it also communicates that the dollars are only moving in one direction: out. Modern marketing is not about spending. It’s about investing and managing investments to predictable returns. </soapbox>

Metric #2: The Rotting Lead Rate

Part of managing better returns on your investment in leads is making sure the lead management system you are feeding creates minimal to no waste. In nearly every B2B sales environment, the old axiom, “time kills deals” applies. By extension, it is also true that time kills leads.

Many complex processes are described colorfully to the uninitiated as “how the sausage is made.”  Whether we’re talking about legislation, product development, or revenue generation, it’s a useful analogy. Applying it to marketing and sales, we can ask the question: how long should our sausage ingredients (leads) be allowed to sit on the factory loading dock before moving down the assembly line? At what point do our ingredients (leads) begin to become unusable?

I call this the “rotting lead” concept. The first time I used that term was in a high-velocity, inbound sales environment. In that environment, a rotting lead was any lead delivered to a sales person that did not have an activity recorded against it (call, voice mail, email) within the first 24 hours after delivery. The “rotting lead” rate is simply the percentage of leads that are past their expiration date (e.g. 24 hours, 3 days, 1 week from lead hand-off) at any given time.

When I first used the term “rotting leads” in a conversation with my counterpart in sales management, I was concerned about introducing unnecessary friction into the marketing and sales relationship. To my delight and surprise, my colleague not only liked the concept, but liked the phrasing, and wanted to see real-time reports in our CRM to help him manage “lead rot” out of his process. This was a great learning moment for me.

Metric #3: Leads (and/or Opportunities) In Process per Sales Rep

Continuing with our sausage factory metaphor, let’s consider a scenario where one or more of the assembly lines becomes overloaded with ingredients (leads). One of several things will tend to happen:

A. the line stops to process the ingredients it already has on the conveyor belt.

B. the ingredients are handled too quickly resulting in defects in the sausage (yuck!)

C. some of the ingredients are not handled at all because they don’t fit on the crowded conveyor belt, so they fall on the floor (double yuck!)

To the factory foreman (Head of Sales), the net result is sub-optimal sausage production due to waste and inefficiency.  The foreman has a vested interest in making sure that his/her factory is “load balanced” or “resource leveled.” The marketer shares that interest because an inefficient sausage (revenue) factory drives down marketing ROI.

Summary

When compared to Cost per Lead, these three metrics are more useful diagnostics of marketing investment performance.  And, more importantly, these metrics measure marketing AND sales as a single unit.

Companies that measure (and manage to) Pipeline per Dollar of Investment, the Rotting Lead Rate, and Leads/Opportunities In Process Per Sales Rep create the right incentives to drive lead management transparency, marketing and sales productivity, and predictable revenue growth.