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1 White paper TM Marketing to the Sales Funnel An Oceanos White Paper, sponsored by Aprimo The battle between competitors is being won and lost at the top of the funnel. SiriusDecisions, Demand Creation Facts & Figures FOREWORD The following white paper offers a perceptive overview of the changes underway in B2B marketing. Written by Brian Hession, it provides unique insights on the relationship between sales and marketing, the role of marketing throughout the buying cycle and ways to target multiple buying audiences. As President of Oceanos, Brian s pragmatic views on B2B marketing deliver astute advice to marketers across the globe who are struggling with how to approach today s buyers. His observations about marketing at the top, middle and bottom of the sales funnel present convincing guidance on the best ways to drive your marketing and evaluate your success. I think you will find this article both useful and enlightening. Jeff Chamberlain VP, B2B Solutions Marketing THE CHANGING ROLE OF MARKETING The focus of marketing has evolved dramatically over the past few decades. Its earliest incarnation tended to be high cost, broad reach, and low return. But economic pressures, competitive influences, and tighter budgets have meant a change in direction from total reach toward lead generation as the concept of return on investment became the main driver in marketing. This shift also represents a change in the relationship between sales and marketing. By the very nature of lead generation marketing, one of the primary goals is to pass leads to the sales team so that they can be turned into revenue. Unfortunately, when driven to focus on metrics like lead volume, marketers often opt for quantity over quality and pass contacts to the sales team that are not ready or appropriate leads. These unqualified leads do more than waste marketing resources; they also negatively affect the relationship between marketing and sales. When sales teams continually feel that leads passed from marketing are not qualified, they will eventually stop taking action on those leads. How do marketing teams address this challenge? First, they need to increase quality through better segmentation. Then, they need be able to increase lead volume through better targeting and appropriate messaging

2 MARKETING AND THE SALES FUNNEL In the standard vision of a sales funnel, the top of the funnel represents a large number of potential prospects, and the bottom represents a smaller number of contacts who are closest to a purchase decision. Prospects transition from the top of the funnel to the bottom as they are qualified, express interest, engage with the sales team, indicate intent to buy, and finally, purchase. Unqualified leads do more than waste marketing resources; they also negatively affect the relationship between marketing and sales. SiriusDecisions, Demand Creation Facts & Figures Each step in the sales process acts as a filter, so prospects at the top of the sales funnel convert to actual sales at a lower rate than prospects further down the pipeline. As a result, marketing activities aimed at the top of the funnel tend to generate a larger number of responses, while activities targeted further down the sales cycle tend to result in revenue more quickly. HIGH RESPONSE VS. HIGH QUALIFICATION If a company bases their evaluation of a marketing department on the number of leads generated, marketers tend to focus on high response activities. Conversely, sales-led companies can put an inordinate focus on leads that are ready to convert, leading to a great deal of one-time, product-focused marketing. Neither of these strategies on their own will lead to a great deal of long-term value. By ignoring marketing at the top of the funnel, companies potentially lose competitive opportunities before the customer has even made the decision to buy. If you lose the opportunity to form a relationship with your prospect base before the need for a product has been established, you take the risk that your prospect has formed a relationship with another vendor before they even enter the sales funnel. SiriusDecisions, one of the sales and marketing industry s leading research firms, concurs, reporting that the battle between competitors is being won and lost at the top of the funnel. Marketing to the top of the pipeline is also an opportunity to add value in an area where sales cannot typically be as effective: reach. Marketing resources are better able than sales to reach a wider potential audience, moving those contacts through the pipeline until they are at a stage where it makes sense to dedicate sales resources to them. To truly add value to an organization, both short and long-term, marketing teams must generate leads at the top and the bottom of the sales cycle, and nurture leads as they move through the funnel. With this in mind, marketers then need to segment contacts according to their stage in the sales funnel, pass leads to sales at the appropriate time, and tailor messages to contact demographics. Awareness Marketing Lead Gereration & Sales Engagement

3 SEGMENTATION: THE KEY TO FULL FUNNEL MARKETING Before you identify the contacts you want to target, you need to first identify potential accounts. An easy way to think about your marketing targets is in three major categories: new prospects, existing customers, and lapsed customers. For existing customers and lapsed customers, developing these segment lists is fairly easy you should already have them in your CRM system. For new prospects, you ll need a little more information to develop a list of targets. IDENTIFYING PROSPECT ACCOUNTS For most companies, there is a finite range of accounts that will purchase your product or service. Contacts outside of this profile will never enter the sales funnel, and as a result, will always be a waste of marketing resources. So, the first step in developing any marketing plan is establishing a profile of your target account. This can be as broad or as narrow as your product requires. It may include demographic information such as industry, company size, geographic region, number of employees or annual revenue, or even more specific information such as type of software or hardware installed. Ideally, you can then work with a data partner to convert this list of demographics into a list of actual account names and domains. IDENTIFYING TARGET CONTACTS Once you have your three categories of potential accounts identified, it s then time to think about target contacts at each of these account types. It s helpful to think of your contacts as falling more or less into three categories: buyer/decisionmaker, executive/influencer, and end user. For example, if you are a provider of engineering software, your end user might be an engineer, your buyer/decisionmaker might have an IT title, and your influencer might be the CFO. Generally, for each of these three buckets, you will have multiple titles and roles. Current customers are ideal sales prospects because they are, by their very nature, at the bottom of the sales funnel they ve already made the purchase decision. CURRENT CUSTOMERS: SECURING YOUR BASE The current customer segment is often ignored by marketing because they are seen as the domain of sales. In fact, current customers are ideal sales prospects because they are, by their very nature, at the bottom of the sales funnel they ve already made the purchase decision. It is important to market differently to current customers than to new prospects, since sending generic marketing messages to current customers can make them feel unappreciated. Customers want to feel like they have a relationship with you, beyond a revenue transaction. CURRENT CUSTOMER BUYER/DECISION-MAKERS Typically, current customer contacts in your house list fit one profile: buyer/ decision-maker. Marketing to current customer/buyers should be very specific and strategic, focusing on new features, new products, and high-value assets, like analyst reports and industry trend webcasts. When existing buyers respond to ongoing marketing campaigns, relaying this information to sales is very important, as response to certain campaigns may indicate an opportunity to up-sell new products or services. Depending on the size of your customer, there may be buyer/decision-makers outside of your primary contacts that are not in your house list. Working with your data provider, you can identify new contacts at existing accounts that meet your target demographics. These could be buyers at different divisions or departments, or depending on the breadth of your offering, buyers of different products or services. Widening your contact base at an account also helps solidify a long term relationship with that customer. Communicating across an organization to other divisions or departments can also have the added benefit of uncovering new

4 opportunities in other areas of the account. Especially in larger companies, where reorganization and restructuring often accompanies turnover, a wider footprint can mean both retaining and growing business if yours is the product or service of preference. Finally, lateral contacts are often much more likely than upper management or lower level contacts to share new buyer information if your primary contact is displaced. Customers want to feel like they have a relationship with you, beyond a revenue transaction. CURRENT CUSTOMER EXECUTIVE/INFLUENCERS The next segment to consider is executive/influencers a segment that isn t generally found in most organizations house list. These contacts aren t typically your primary buyer. Yet, even though they re not signing the check or opening the PO, they are usually involved in the purchase decision, which often can t be made without their approval. Continuing to establish value with these executives helps them to see your product as valuable to their organization not just an expense item on a budget sheet. When reaching out to executive/influencers, it s important to understand that you re not necessarily expecting a response from them, and to adjust your metric goals (and forms, if you re using them) accordingly. Executives are also not good candidates for sales follow-up they don t always know the specifics of the opportunity or investment, and may perceive direct outreach negatively. Tailor your messages to show value like an ROI study rather than specific features and functions. When looking to add executive contacts to your database, you may need to look for data sources that are targeted to the executive function. CURRENT CUSTOMER END USERS Finally, think about end users at your current customers. End users influence both purchase and adoption, as investments in products and services will be wasted if end users resist using them. It is always a good idea to have end users on your side. Marketing can help end users at existing customers adopt products by giving them opportunities to get as close to the products as possible. Demonstrations, hands on workshops or trials, and tips and tricks webcasts are all high value marketing promotions to end users. Building a relationship with end users can also have unexpected benefits, particularly in economic times when turnover is more frequent. Organizational changes can mean that user-level employees have the opportunity to expand into new roles and responsibilities when vacancies occur above them. For the marketer, making an impression on these contacts before their roles change is crucial. Not only does it give you a leg up on your competitors, but contacts in a new role, eager to prove themselves, are likely to reach out to you if they feel that you can increase their perceived value to management. For this reason, expanding your reach to contacts below your typical buying authority and continuing to reach out to nonbuying prospects, can lead to unexpected gains in a volatile market. Again, the best sources for end user data may be different from that of your typical buyer contacts. Often, end user contacts can be acquired through role-based data sources, which your data partner can help you identify.

5 The goal is to get executive/influencers to make positive associations with your brand before the purchase decision is on the table. NEW PROSPECTS: DRIVING GROWTH New prospects are the bread and butter of the marketing department the opportunity to add value by introducing new potential accounts to sales. NEW PROSPECT BUYER/DECISION-MAKERS Marketing to buyer contacts at new prospects comes with challenges. One of the primary challenges is trying to understand where these contacts are in the sales cycle. Contacts that are too high in the sales funnel, if passed to sales prematurely, may seem unqualified, even if they may eventually turn into active buyers (especially because they ve been pre-qualified by account and contact demographics). For these contacts, use the marketing campaigns themselves to qualify the contacts as ready for sales outreach. Think about your marketing campaigns relative to the sales funnel. Education or thought leadership campaigns related to industry trends, with little focus on actual product, are at the top of the sales funnel. Product and feature/function oriented campaigns are at the bottom of the sales funnel. Once you have associated your campaigns with a linear process of moving prospects through the funnel, you should execute them to new prospect buyer contacts in that order. Top of the funnel campaigns can be sent to the widest number of prospect contacts these campaigns also make good candidates to drive response from third party lists. Campaigns that map to the bottom of the funnel should be sent only to those contacts who have repeatedly responded to upper and mid-level target campaigns. Once these prospect buyers have responded to a campaign mapped to the bottom of the funnel, they can be passed to sales as a qualified lead. NEW PROSPECT EXECUTIVE/INFLUENCERS Executive/influencers at prospect accounts play a similar role to executives/ influencers at customer accounts: they are involved in and need to approve the purchase decision. At prospect accounts, the goal is to get executive/influencers to make positive associations with your brand before the purchase decision is on the table. Again, a response, and sales follow-up, should not be the primary goal. NEW PROSPECT END USERS Finally, prospect end users can actually drive a purchase decision from within. Free product trials, free limited function, or free complimentary end user products can actually establish your product or service as the incumbent at a prospect account, before any revenue has passed hands. Even a preference for, or a perceived understanding of, a product or service by end users can help drive a decision to purchase. In general, prospect end users, like customer end users, are best suited for a marketing engagement only, as opposed to direct sales follow-up. LAPSED CUSTOMERS: WINNING THEM BACK The challenge with marketing to lapsed customers is that customers leave for many different reasons a better offer from a competitor, displeasure with your product or service, or a faulty perception of your value. This means that they often have some reason to be negatively biased against you unlike most prospects. Because of this, target to lapsed customers very specifically. For buyers/decision-makers, focus on we want you back messages that stress your previous relationship and offer compelling reasons to switch. For buyers/decision-makers and executive/ influencers, highlight competitive wins or benchmarks, third party evaluations, and any new features or products that add substantial value to your offering. Finally, for end users, give them as many opportunities as possible to interact with your product or service without risk free trials, free products, and high-value engagements that might help get them familiar with your product and advocating from within.

6 CONCLUSION Carefully targeting both traditional and non-buying contacts at mid-funnel accounts, in addition to prospect marketing activities, can help you both build a pipeline for the future and realize revenue now. REALIZED REVENUE: FOCUSING ON THE SALES FUNNEL Marketers can create effective short and long-term revenue strategies by understanding and mapping to changes in sales strategies. The top of the sales funnel represents a large number of less qualified prospects, and the bottom of the funnel represents a smaller number of customers who are closest to a purchase decision. As a result, sales and marketing activities aimed at the top of the funnel tend to generate a larger number of deals over a longer period of time, while activities aimed at converting prospects further along in the sales cycle tend to result in revenue more quickly. ABOUT OCEANOS Oceanos creates innovative, metric based data strategies for demand generation marketing, guided by our vision of List Intelligence. Powered by our proprietary List Optimizer, they assemble custom lists, comprised of multiple data sources that precisely align to a prospect definition. Their approach provides logistical and cost efficiencies ensuring a competitive marketing advantage. Oceanos works with consumer and business-to-business clients of all sizes, including companies in the software, manufacturing, retail, business services, education, healthcare, electronics, and information services industries. Their success has placed them on the Inc. magazine fastest growing private company list three consecutive years. ABOUT APRIMO Aprimo s integrated marketing software enables B2C and B2B marketers to successfully navigate the changing role of marketing by taking control of budget and spend, eliminating internal silos with streamlined workflows and executing innovative multi-channel campaigns to drive measurable ROI. Through the use of Aprimo s modular and on demand software, Aprimo Marketing Studio for B2C and Aprimo Marketing Studio for B2B, marketers can integrate marketing organizations, manage, deliver and track the right message targeted to the right audience over the right channel and translate marketing efforts into measurable business impact and revenue. Hundreds of thousands of marketers trust Aprimo to revolutionize their marketing. Aprimo customers include over one third of Fortune 100 companies, and nearly one quarter of Global 100 companies. Aprimo, Incorporated 900 East 96th Street, Suite 400 Indianapolis, IN main fax aprimo.com

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