Leads, Leads, Leads

In previous posts, we talked about the difference between Web and Lead metrics and how you can fill the gap by using cookies to attach Marketing channel information to the lead record that gets sent to your CRM and ultimately, to the sales rep.

Success will depend greatly on the quality of your offer, but let’s assume you put something interesting out there and you’ve got traffic coming back to your Web site. Once we get traffic to the site, we know from industry averages that 1-7% will be willing to fill out an online form.

You can and should track form completions in Google Analytics or another Web analytics system, but as far as quality goes, these records aren’t even close to being ready for delivery to a sales rep. They might include test registrations from your Web technicians, duplicates – which we define as the same person performing the same activity on the same day, and depending on your audience, false identities ranging from Fred Flintstone to French Fries, fully equipped with 555 phone numbers and email addresses that do not resolve.

However, what’s left behind is starting to look interesting. It’ll be a mix of re-contacts, tire-kickers and the true gold, net new prospects.

All of this latter group needs to get to Sales at some point, but it could be that you’ll have to put them through a nurturing program first. That’s where you hold some leads back from Sales and remarket to them through email or more online advertising. The amount of nurturing you’ll do has a lot to do with Sales needs. If you’ve got a mature product and seasoned Sales leaders, it could be they’ll want the filters set to high. If you’re in a startup mode or table model, you might have a larger number of less experienced reps willing to make 100 calls or more per day.

Nurturing programs are particularly critical to B2B marketing programs where sales cycles are longer. They’re also dependent on the nature of the asset that solicited the registration. If someone fills out your “Have a Sales Rep Contact Me” form, it’s probably best not to send that person to a nurturing program, right?

On the other hand, if the prospect signed up for a white paper designed to build awareness of an enterprise-level, platform-level, high-cost-of-switching product, you might want to hold off before have a sales rep contact that person. Instead, you want to make related content offers to that person until they start to think of your company as an information provider in that space and register for something more targeted.

Leads

High-quality, net-new leads are like revenue – you can’t generate enough. You’ll see slightly different definitions all over, but in general, Marketers agree that a lead is a registration record where the prospect provided enough valid information for:

1. The CRM to route the lead record to the correct sales rep
2. The sales rep to respond through the contact information provided

Our friends in Sales might say that those are very Marketing-friendly definitions and they would be right. The fact that the prospect gave us valid information doesn’t mean she has any interest in buying our product.  White papers in particular generate this type of activity. Many people just want to keep their knowledge up-to-date by reading. If you decide to send white paper leads to Sales instead of Nurturing, be prepared to hear back that the leads are of low quality. Most of the respondents don’t want to talk to a sales rep because they’re just researching industry trends.

For this and other reasons, we’ve found it helpful to use the following sub-types when talking about leads:

• MQL – Marketing Qualified Lead. These records meet the bare minimum we discussed earlier; the CRM can route the lead to the correct sales rep, who has the information he needs to follow up.
• SAL – Sales Accepted Lead. Think of this as the accepted handoff from Marketing to Sales. This status indicates that the Sales rep has reviewed the information and agreed that there is enough information to contact the customer.
• SQL – Sales Qualified Lead.  Expect a big drop-off form SAL to SQL. Depending on your industry, it might be as high as 90%. SQL means that the sales rep has agreed that there is a legitimate chance at a sale and that he or she will now focus on determining the value of it. You may also hear SQLs referred to as Opportunities.

Pipeline

An SQL might also be referred to as an Opportunity. They typically mean the same thing; that the sales rep has contacted the customer, evaluated the situation and is willing to estimate the size of the potential deal. In total, the sum of all those estimates is your current Pipeline; all the money that your sales team believes is there for them to go after.

Finance is going to be looking at aggregated pipeline across sales teams and using past conversion models to estimate revenue in upcoming quarters. As a business, your ability to hit those revenue targets will determine shareholder success and ongoing investment.

Depending on the rules your company has in place for managing pipeline – and how late you are in the quarter – that estimate might be very low, very high, or right on target. It’s hard to say until the deal is closed, the most critical and usually toughest task in business.

We’ve covered significant ground in this review so far and have traveled well down the sales funnel. We’re left with the people most likely to convert and even have estimates on what those deals are worth. What’s left? Revenue, of course. As a wise friend once said, “You have to ask for the money.”

Revenue

Revenue is of course the final measure by which any successful business is managed. Under-report and you’ll be in big trouble with the Board of Directors. Over-report at a public company and some of your Board of Directors might go to jail, which will also be seen as an unsatisfactory outcome.

From a Marketing perspective though, we have to think of Revenue as an outcome of Marketing activities. When you’re reporting on Marketing Success in quarter or in-year, it can prove difficult to tie Marketing campaigns to revenue, especially when – as is the case in our B2B software industry – sales cycles are longer than a quarter or a year.

We solved this dilemma by identifying two methods of Revenue attribution:

• Opportunity Closed. Just as it says, this method allocates revenue to the quarter in which the opportunity closed business. If you’re reporting on in-quarter or in-year success, Opportunity Closed tells you specifically which deals closed in that year or quarter. This method is fine if you have a relatively short sales cycle of less than a quarter or less than a year.
• Opportunity Opened. This method allocates the revenue to the quarter in which the opportunity was opened. It does a better job of allocating revenue to Marketing activity over time, but requires constant updates and the willingness to continue looking backward at closed quarters. For example, if a deal opens in Q3PY (Previous Year), but closes in Q2CY (Current Year), the Marketing Contribution to Revenue (MCtR) for Q3PY will increment in Q2CY by the amount of the closed deal.

We switched to the Opportunity Opened model because it does a better job of tracking the true contribution of Marketing campaigns to Revenue. It does require the patience of your Sales and Marketing leadership teams to trust that campaigns that ran over a year ago are influencing current deals. Moving to a data-driven Marketing model will help you build that trust.

Phew! That’s enough for one day. Thank you for commenting, liking and sharing.