Jun 302011
 
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My friends over at Focus asked me if I wouldn’t mind sharing an infographic they recently published on marketing automation. The infographic has some interesting metrics and data points from leading research and analyst firms covering the MA and CRM space. For anyone wanting a quick intro or an updated “lay of the land” in this category, it’s a good read.

[Attention all Federal Trade Commission hallway monitors: no money was exchanged and no other quid pro quo took place here, ok? Sheesh….]

Now, since this is a blog, I feel obliged to add some perspective on this topic. So, on top of the ones in the infographic, here’s two more metrics for you to consider. The good news: assuming you have some basic tracking tools like Google Analytics and/or a CRM system  you can pretty easily apply these metrics to your business.

Metric #1: Your fresh leads who don’t buy. This is the basic “lead nurturing” scenario, and the subject of many marketing automation discussions. Let’s say you generate 100 leads per month and 8 of them end up buying your product. There’s up to 92 more leads that still need attention in some form. Sure they may have bought from your competitors. Or they may have shelved the project. Or they may have just been kicking tires in the first place. Marketing automation can help you stay connected to these 92 leads per month – that’s a run rate of 1104 leads per year for anyone who is counting —  in a way that is cost-effective, scalable, and branded.

Metric #2: Your web site visitors who don’t become fresh leads. A lot of people don’t realize how  marketing automation can help improve lead conversion. Here’s just one way: let’s assume those 100 leads per month above are derived from 15,000 unique visitors to your web site each month. Marketing automation can help you track and score those 15K “uniques” from the moment they reach your web site, which may occur well before the lucky 100 become known to your sales team. The benefits of this are two-fold:

a)      Sales-effectiveness. Your sales people can better understand the prospect’s motivations and interests, as shown by the keywords used, and the pages/content viewed by that person before contacting your sales rep. This allows your sales team to use precious “talk time” more efficiently, presenting the benefits of your product or business that matter most to the prospect. And with the help of lead scoring (a point system that reflects the expected commercial value of a web visitor or lead), your sales team can further optimize talk time by calling out first to the highest scoring (hottest) leads.

b)      Marketing effectiveness. Your marketing expert(s) can easily optimize landing pages, phone trees, email templates and other assets by analyzing the rich website and CRM data that are “married” to your leads and orders. And as powerful as Google Analytics is, most companies either don’t or can’t use it to answer important profit-related questions about your sales process. Questions like, “how do we attract, convert, and close more law firms with between 5 and 50 employees in major cities?” A smart implementation of a marketing automation process can answer questions like this.

Enjoy the infographic! (and click it to enlarge)

Marketing Automation Infographic

If you find the original post of this infographic on Focus.com, there’s some good banter in the comments section about marketing automation products being over-hyped and ultimately too hard to deploy (i.e., “shelfware.”). For the record, here’s my take:

Over-hyped = YES

Shelfware = NO, at least not with my clients.

Note: I’m hereby adopting a new policy on this blog. There will be a minimum of one self-promotional plug required in each post. There’s a limit to this all-you-need-is-love marketing, you know.  Just ask the evil geniuses at Coca-Cola, who with one brilliant TV ad released about 40 years ago, heralded both the death of 60’s idealism and the birth of Gen-X cynicism.

But I non-sequitorize, or, something….

Anyway, most of the deployment issues with marketing automation occur when companies realize (typically, and unfortunately, post-purchase) that they lack the commitment required to do it right. There are other issues too. The products still need to mature, and the talent pool of implementors still needs to grow. There will be a shakeout in the marketplace for sure, and perhaps soon. But the basic building blocks of marketing automation are here to stay.

Jan 162010
 
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Over the past year, I’ve had the good fortune to speak with 80+ B2B marketers at leading U.S. companies. I’ve taken extensive notes during each of these discussions and have learned some interesting things. Here’s a few highlights:

1) In nearly all of those conversations, the topic of marketing automation and lead nurturing has come up.

2) About 50% of the marketers I’ve spoken with have already purchased a marketing automation solution. (This figure is not a proxy for overall market adoption of these solutions. The population I spoke with is generally in the “early adopter” category.)

3) Most of these marketers are, by their own admission, using only a portion of the robust capabilities available in these solutions. Essentially, these companies are using MA software to automate email blasts to current customers and prospects.

4) None of the marketers I’ve spoken to have implemented the lead scoring functionality available in these solutions. The reasons for this are several. Some have found that they have not identified or hired the right person to drive the lead scoring effort, because a specific skill set is required to do scoring right. Others have cited challenges in obtaining buy-in from the sales team – whose support and collaboration is essential to building an effective lead scoring model. And still others have said “sales is going to call all the leads anyway, so we don’t see a need to score them.”

5) Despite the limited scope of their existing deployments, all the marketers I’ve spoken to are still very committed to the category of marketing automation. They are just in first gear at the moment and planning their ramp-up strategies.

As a result of these conversations, I’ve been working on a visual aide to succinctly explain why I believe it’s critical that marketers and sales leaders commit to the lead scoring process as a part of any marketing automation project. I offer it up here as a contribution to the conversation.

Some explanatory “companion text” follows below the graphic.

 

Why We Nurture Leads

Companion Text:

  • The blue bars represent the universe of leads acquired through any marketing effort. Let’s put the number at 1000 leads. The red/pink shaded area represents the effort the Sales team will make trying to move those leads into the sales funnel.
  • The Y-axis represents a hypothetical lead score range of 1 to 100 (for what it’s worth, it’s not considered best practice to use a 100-point scale in lead scoring, but I’m simplifying here for the benefit of newcomers to marketing automation).
  • In the chart on the left, we look at the Lead Score (sales-readiness) of this 1000-lead universe in the timescale of one month after their lead capture date. In the chart on the right, we look at the Lead Score of the same population 9 months after their lead capture date.
  • According to Brian Carroll, author of Lead Generation for the Complex Sale, 70% of buyers you attract to your web site will eventually buy from someone. However, most of them are not ready to engage at the moment they appear in your CRM system (you are using a CRM system, right?). An important premise of Carroll’s argument is that the sales-readiness of these leads will increase, whether or not your company nurtures them. But only by nurturing do we have the opportunity to shape the preference of the buyers in that population of leads. And only by scoring do we have the opportunity to measure the relative levels of sales-readiness of one lead versus another.
  • But what about the argument that “sales calls all the leads, so why should we score them?” In my experience, Sales will always make an effort to call all of the leads. But it sometimes is worth repeating to ourselves that Sales is ultimately hired to one thing: sell. Not calling all of the leads is actually, really, truthfully, at the end of the day, a “venial sin” in the sales department. Not closing business is a “mortal sin.” [Or for those who prefer a more secular interpretation. Not calling all the leads will merely put the sales manager on his/her boss’ “Hurt Me” list. Not closing deals will put him/her on the “Kill Me” list.] So marketers should assume that the Sales team’s follow-up effort will result in a single touch (call, email, or voice mail) against 70% of the leads at best. Because when given a choice between calling a lead of unknown quality, and calling a prospect in the middle or bottom of the sales funnel, any successful sales person is going to do the logical thing and focus on closing business. [It’s also worth mentioning that another habit of successful sales people is to allocate 20% of their time to prospecting / pipeline development. But even the aggregate effect of that time allocation, if it’s happening across the sales team, will typically not be as effective in keeping leads warm, and certainly not as measurable, as a well-executed marketing automation program.]
  • The 1-month timescale (the chart on the left) illustrates the inefficiency of the “call ’em all” approach to lead development. Lots of calls are made and emails sent to prospects who are not yet ready to buy. The non-responsiveness of these pre-mature buyers is a contributing factor to the oft-heard judgement of the sales manager: “these leads are s#!+. We need the good leads!”
  • The 9-month timescale (the chart on the right) illustrates the benefit of a well-integrated lead nurturing program. If marketing and sales work together to define a solid lead scoring model, the effect is that sales will be spending more of their time speaking to more qualified buyers.
  • An ancillary (but very significant) benefit of this approach is that over time, marketing can actually spend less money buying impressions, clicks, and leads. This is because, over time, patterns emerge in the data to show what fish are biting, where they’re swimming, and how you can hook them.
  • Where should all that money go that you save on demand generation? Here’s a few ideas:

Six things you can do with the money you save implementing marketing automation:

  1. Tell your  CFO / CEO to hire more sales people so your company can drive more revenue. [Some marketers may accuse me of heresy for daring to suggest that they offer up any portion of the marketing budget to hire more sales people. I would just reply that the goal is to make money. And good stewardship of the marketing budget means maximizing the efficiency of spend not maximizing spend.]
  2. Spend more money on the lead sources you (now) know are *really* working.
  3. Invest in thought leadership driven content creation (webinars, white papers, social media contributions).
  4. Conduct research on your current, live, in-market prospects to better understand what makes them buy.
  5. Send yourself and/or your team to a MarketingSherpa or SiriusDecisions conference.
  6. Negotiate a raise for yourself (preferably bundled with a promotion).  :)
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.

Jul 282009
 
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This is the christening entry of a blog dedicated to the category of Business to Business Demand Management. B2B Demand Management encompasses or relates to a number of functional marketing and sales disciplines. Among these are Customer Relationship Management, Business Media, Social Media, Lead Generation, Direct Marketing, Web Marketing, Lead Management, Lead Nurturing, Cost of Acquisition, Marketing Automation, Funnel Optimization, Marketing Portfolio Management, the 4 (or 5) P’s framework, and Revenue Forecasting.

The author of this blog is me: Tom Scearce.  I was originally assigned the moniker “The Lord of The Leads” when I served as Vice President of Market Development at a business communications company called Speakeasy, which is owned by Best Buy. I never asked why I was given the “LOTL” handle. It would be nice to think that the title (“The Lord”) implies a certain level of mastery over my subject matter (“the Leads”). It would be just as correct, however, to apply a more humbling definition instead. For like the various ring-bearers in the epic Tolkein trilogy of a similar name, I became (and remain) subject to a certain unhealthy obsession with the Precious… …er, with the topic of B2B demand management.

Why the obsession? The reasons are many but I’ll choose just one for purposes of illustration. It has something to do with the chance to solve a business problem that was articulated so well by John Wanamaker, nearly a century and a half ago. Here is his oft-quoted pearl of wisdom, which every modern marketer knows by heart.

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

We have finally reached an age where the convergence of technology, capital investment, and skills available in the labor pool have combined to make the previously unknowable (e.g., what is really working in my marketing mix and what is not?) knowable.

Knowable enough, anyway. Knowable enough to drag the mysterious black box in a dark corner that has heretofore been called “the marketing department” out into the daylight where it can be opened, examined, and improved.

(By the way, I refer to the marketing department as a mysterious black box not because I have a disdain for marketing, but because a lack of transparency has been an unfortunate side-effect of Wanamaker’s quandary. Most marketers, this one included, would actually like not to live and work in a mysterious black box. It’s cold and uncomortable in there. And it’s hard to see what you’re doing.)

Every other function in the modern enterprise has, for decades, been subject to time-honored and refined measurement practices and optimization regimes. Finance, Operations, Human Resources, and Sales can all be measured and managed ten ways to Friday. Marketing, however, has largely seen evaluations of its performance simply rise and fall with the success of the Sales team.

Is it a bad thing that Marketing and Sales be evaluated as a unit? Not necessarily. To be sure, if Marketing is not adding value to the Sales function, and Sales is not meeting its objectives, then changes are probably due in at least one of those departments. But change without deeper inquiry into root causes still leaves John Wanamaker’s problem unsolved. And since most companies spend between 3% and 10% of revenues on marketing, ignorance is expensive. Said differently, the business case for demand management competency can be compelling.

Sam Shepard once said, “Right in the middle of a contradiction, that’s the place to be.”

So, here is the great contradiction that (partially) explains my obsession with the demand management category.

  1. Through a convergence of technology, venture capital, and human capital, we now have within our reach the solution to a generations-old business problem: marketing effectiveness.
  2. The stakes in this game are high – $161.4B will be spent on advertising in the U.S. this year. That means a lot of CFOs, COOs, and CEOs will be asking, especially this year, what that $161.4B paid for.
  3. Most companies have not yet invested in demand management competency.

Now your turn: Why does this contradiction exist? What explains it? And what will it take to change the status quo?