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).  :)

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  4 Responses to “Why We Nurture (and Score) Leads”

  1. Hey Tom,

    Thanks for this great post. I think you bring up some really good points. We also encounter many people that are not using Marketing Automation solutions to their potential. There are very few companies (recent study was 5%) using marketing automation, and many that are either simply don’t have the resources, or the education / training to really use the systems successfully. Either way, posts like this are beyond valuable to that education!!

    • Barbra-

      Thanks for your thoughts. Even as this is an established product category, there are a number of factors that explain the low adoption rates you mentioned. For example, I think the degree to which lead scoring has not been a feature of M.A. deployments is ultimately a symptom of the perennial difficulties in the marketing and sales relationship. Lead scoring is an inherently collaborative endeavor between marketing and sales. I suspect we would find that in companies where scoring has been implemented, there are, generally, higher levels of cooperation between the two functions.

      Thanks again!

  2. Tom, thanks for the interesting post on why companies should score and nurture leads. It’s a great educational piece. You’re right, I believe the lack of adoption in the full feature set is for a few reasons.

    First, the “chinese wall” between sales and marketers. Second, a misconception of “marketing automation” by sales. When a tool is called a “marketing automation” tool, as a sales person you think to yourself, well, that’s a tool just for marketing. Sales develops psychological resistance to adopting the solution. In reality, marketing automation is a feature of revenue generation. Most companies would agree that revenue generation is a common goal shared between sales and marketers. Maybe a name change is necessary. Instead of calling it “marketing automation software” call it “revenue generation software”, maybe that will drive change? I agree with your comment on the one-and-done-sales-call-all strategy. Additionally, I’d like to comment on the other concerns:

    1) Haven’t hired the right person to drive the lead scoring effort. I’d argue you don’t have to higher anyone for this role. Marketers can assume the responsibility as part of their current duties. Lead scoring technology, in particular UIs, have matured. Most companies are using some flavor of drag/drop technology for the UI resulting in easy to use interfaces.
    2) Challenges in obtaining buy-in from the sales team. I’d recommend companies start slowly with their lead scoring programs. The biggest challenge gaining adoption from sales is that sales and marketing don’t agree on the definition of lead. Use lead scoring as an opportunity to define a lead. If sales sees marketing make a stronger effort to understand the “sales world”, they might open up more. Sit down with the sales team to understand their definition of a qualified lead. Keep it simple, such as scoring based on 3 or more page visits. Implement the “micro” scoring program and see how it works.

  3. Hi… …revenue generation solutions.

    I appreciate the thoughtful comment on my post. The funny thing about lead scoring is that, to me at least, it’s the main reason to go to the trouble of automating this process in the first place. But it often is the place where implementations fail. And not because it doesn’t work, but perhaps because it works too well.

    Marketers who’ve been trying to measure their efforts get a wild look in their eye because they’ve finally found a way to measure their efforts in a non-bulls#!t way. But when sales sees a marketer getting excited about measuring the sales process, they (quite understandably) get their hackles up. It’s hard enough to work under the watchful eye of sales management. Now marketing wants to come in and score my leads? And no matter how much marketing tries to assure sales that their 73-factor lead scoring model is really straightforward…. you get the idea.

    BTW, since your comment was clearly generated by a human and not a machine, why not use a real name?