CEOs continue to demand better ROI measurement and accountability from marketers.
As a result, there’s been a surge of interest in software and tools to manage the process of lead management, lead nurturing and lead generation with a greater emphasis on measurability.
In 2005, I wrote a post predicting that lead generation dashboards would become a hot topic and according to the CMO Council’s 2007 Outlook Report the time for marketing performance dashboards is now.
The report states, “Seventy-five percent of respondents from companies with revenues of more than $500 million plan to deploy a marketing performance measurement dashboard this year, almost twice the number who will invest in the next highest category of system deployment, which is lead generation and qualification. Marketers from smaller companies said lead generation and qualification and email campaign management would be their two top areas of system or service deployment.”
Additionally, a MarketingProfs article from last week, “B2B Demand Generation in the Age of Accountability, Measurability, and Automation” by Mike Zavershnik of Eloqua emphasizes how “new marketing automation systems delivered as a service enable marketers to quickly scale their most successful campaigns to drive a larger flow of qualified leads.”
With that said, I think it is important to remember that buying lead management software and dashboards tools are akin to buying a high-performance stock car. Without a skilled and knowledgeable driver behind the wheel, you may never get out of first gear no matter how great the car is.
All too often companies invest in expensive software before they fully understand the fundamental operational processes that it will be supporting. This is a common theme in sales and marketing automation, CRM implementation being another good example.
To develop a world-class demand generation and lead management operation you’ll need three things:
- Enough of the right people to support the process
- A well thought out process to support the people
- And finally, the right tools and systems to help people manage the process
I think that most sales and marketing professionals recognize that software will not spontaneously generate results, but the allure of easy execution and fast results are difficult to resist. It’s also easy to forget that these systems require a lot of hands-on input and maintenance to be fully appreciated.
Yes, lead management software and dashboard tools are hot now because the pressure for more measurable ROI is greater than ever and these tools can help you, but make sure you take a more holistic approach.
Start by understanding your lead generation requirements and design a suitable process to support it and insert the software into the process where it will be most effective and actually used. Most importantly, don’t underestimate the need for a dedicated team of people that will drive the process and make the inputs into the system.
If we continue to follow this line of thought it’s logical then to ask yourself if the metrics you are getting back out of the system are telling you that you’re getting better?
This morning I talked with Jim Berkowitz, who writes the CRM Mastery E-Journal. When I told him about this post he replied, “With dashboards, nobody ever seems to talk about having the right metrics that help you measure if you’re improving…” I agree.
Most marketing metrics are like driving a car by looking in the rear view mirror (yes, another car analogy!). They tell you where you’ve been but they can’t tell you where you’re going. Ouch! So are you using metrics that actually help you look forward?
I think companies will continue to buy the promise of these tools even though they lack the resources to actually leverage them. What do you think?
One of the causes (or is it an effect?) of this is a de-sync in cycle speed of different stages of the marketing/sales funnel. Thanks to Google, its competitors, and a whole host of web marketing tools out there, marketers have the ability to rapidly deploy and test click-generation messages and vehicles, as fast as they can come up with good ideas (and unfortunately, sometimes faster).
Other things being equal, that’s a good thing. But as you go further into the funnel, forces of inertia and entropy slow you down. If you graphed it, stage in the funnel on the x-axis, effort to make conscious, experimentally sound changes on the y-axis, it would be a rising exponential curve. Changing AdWords copy, very easy. Changing your field sales training and incentives, very hard.
So, when you have a hammer, and hammering nails is easy, guess what everyone does? But now you end up with front-end marketing cycles that are moving very fast, sometimes measured in days or hours, and back-end sales cycles and processes that may take months or years to feedback.
Being aware of this is a good start, but what else can be done? I’d suggest that metrics for audience segmentation and respondent quality earlier in the funnel are as important as click-through rate, conversion rate, and CPA. True, this requires more judgment — what are the right segments? how do we infer them? what proxies can we use to gauge lead quality early in the clickstream? — but it focuses conscious consideration (and measurement, albeit more fuzzily) on factors that are far more important in the final stages of the funnel.
What do you do with leads once you generate them?
This question is overlooked by almost everyone. It is often the cause of failure in what would otherwise be effective web marketing campaigns. The common-sense answer is easier said than done: Have your best employees respond to them quickly and consistently to qualify them into prospects.
Many companies spend thousands of dollars every month with Google, Yahoo, and MSN to generate clicks to their website. These same companies invest tens of thousands in building a web site to attract visitors. They even use analytical tools like Omniture, WebSideStory, or WebTrends to track these visitors and turn them into leads, only to let those leads sit in some sales manager’s inbox for 48 hours before they are contacted.
One elegant solution is to embed a web-form onto a website that captures the lead and pushes it real time into a database. It then quickly routes the lead to the best suited sales rep, a telephony tool immediately gets the rep on the phone and automatically calls and connects the lead to the rep.
Our research shows that the average salesperson only makes four to five attempts to contact them the first week. This means only 55% of a company’s web leads will actually get contacted.
It goes back to Lead Response Management: Acquire a system that immediately and systematically pushes the leads to the best qualified salespeople. A system that also allows the salespeople to immediately and frequently respond to leads and turn them into prospects. Again, this simple but overlooked approach can boost net results by 20 to 200%.
I think that the problem has a lot to do with the mindset of marketing and sales, especially in B2B. There are still a lot of folks in this business who are doing things the same way, with slightly different technology in the last 20 years.
Some CMOs deserve their limited stay because they haven’t changed their practices. There are some Sales VPs (except for those who have migrated to Salesforce.com perhaps)that deserve a similar fate.
Marketing in particular needs to be singled out because ROI is still a foreign concept to many there. Spray and pray is still the order of the day.
So in summary, marketing can be measured. But not until marketing understands that they need to change.
Thanks for your comments. I agree with you. I think our “instant gratification” culture is the main culprit. We’re a “Fast Food Nation” after all.
For example, most CEOs feel that they aren’t getting enough activity at the top of the sales funnel. Marketers are constantly reminded that more leads are needed…now!
So here’s the challenge that most marketers face… they want to think long-term but keep getting sucked in by the more immediate and pressing issue of a not having enough high quality sales leads.
We all want our ROI and we want it now! So who’s to blame? The CEOs who cower to the will of their investors, boards, analysts and media? The investors who applaud short-term returns in their portfolio? The analysts who predict the future success of a company and then punish them for falling short? The media who criticizes leaders for thinking long-term?
In addition, we can’t ignore research showing the average tenure of a CEO is six years. But for a marketing leader it’s less than 24 months. So I think fear plays a role too. What do you think?
Measuring the ROI of lead generation isn’t the same thing as full accountability. If marketing is a profitable activity it still doesn’t mean that what it is communicating to the universe of buyers is building the business. I’ve seen lots of marketers sacrifice early and middle stage buyers because they had to show an immediate ROI on each campaign they ran. Who is accountable for all the potential business they lose by saying the wrong the thing to the right people at the wrong time?
I want to respond to your question why so many organizations avoid developing the people and processes to support lead management dashboards and nurturing programs.
Having worked for many such organizations and currently employed by one, I can only say that in my experience the lure of instant gratification, magnified by pressure from Wall St. and facilitated by the Internet’s ability to deliver immediate results are what cause this kind of myopic thinking.
The problem is exacerbated when the players making decisions and calling the shots do not fully understand the medium, the technology or the process.
As a result, all the attention gets paid to leads, but not necessarily what to do with them. A sales organization accustomed to lead nurturing and relationship building might understand, but not organizations with little experience beyond awareness-building advertising campaigns.
Those companies that get it and can see beyond spending big to generate leads in attempts to meet quarterly targets will have a much better chance of seeing a return on their investment if they also invest in the infrastructure to support that strategy.
You have really focused on a big gap that we have been able to resolve. In B2B, there were two sides to the revenue equation.
1. In the Marketing world, automation systems are good at providing a smaller number of higher quality leads that are “passed” to sales.
2. In the Sales world, Sales methodologies and CRM systems focus on measuring activities once a lead has been qualified, or generating a QSO – Qualified Sales Opportunity.
As you can see, its not just about demand generation and lead generation, its the next step… Lead Qualification. Here is an example: http://acrelic.typepad.com/david/2007/04/what_is_a_lead_.html
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