INCREASING REVENUE THROUGH AUTOMATED DEMAND GENERATION
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1 INCREASING REVENUE THROUGH AUTOMATED DEMAND GENERATION Five Best Practices Top Business-to-Business Marketers have Implemented to Increase Revenues and Sales Success. February 2007
2 Increasing Revenue Through Automated Demand Generation Introduction For as long as marketing has existed, business-to-business marketers have faced a constant pressure from corporate executives to identify new sales leads and improve the quality of leads that are passed on to sales. Top B2B marketers have begun to take a holistic approach to generating demand by developing repeatable processes that can continuously be improved for marketing success. Yet today, meeting these demands is still more of an art than a science. While marketer s counterparts in sales are inundated with a wide array of sales processes and techniques, marketers lack a little red-book of lead generation. A quick search on Amazon.com backs up this fact, showing 293% more books on sales processes as opposed to lead generation process. The lack of marketing processes is reflected in the large number of individual technology point solutions that marketers employ to implement programs and generate demand including , PPC ads, web analytics, content management, and list management, to name a few. With recent advances in marketing automation technology and the proliferation of software-as-a-service (SAAS), top B2B marketers have begun to take a holistic approach to generating demand by developing repeatable processes that can continuously be improved for marketing success. This whitepaper looks at five best-practices that top marketers have successfully implemented to generate a constant flow of qualified leads for increase revenues and sales success. 1 Clearly Define the Combined Marketing & Sales Pipeline At first glance, to many readers this may seem like a no-brainer. Yet at many companies, if this question was asked to various people across the enterprise, each player would define the stages of the pipeline differently. In order to work towards a repeatable process, it s critical that sales, marketing, and other key players in an enterprise share a common definition of the combined sales and marketing pipeline and the characteristics of each stage. For example, a typical sales & marketing pipeline may look like this: LEAD > SUSPECT > PROSPECT > OPPORTUNITY > DEAL Key factors to consider when defining the stages include: Firmographic details (size, sales model, revenue) Level of interest and purchase intent Budget Availability Decision maker involvement While pipeline stage definitions may vary greatly from company to company the premise should remain the same. Develop crystal clear definitions of each pipeline stage and the trigger events for conversion from stage to stage. Be sure to implement a level of granularity that will allow for effective tracking, but don t get caught up in minute details as you can quickly be inundated with information and create a pipeline that s too bulky to manage. page 2
3 2 Implement an Integrated Marketing & Sales Platform One of the factors contributing to minimal communication and cooperation between sales and marketing has been the disparate data management systems that each has used. Sales have been linked to their CRM system for some time while marketers have used a wide array of technologies to execute and track programs. These disconnected applications have made it virtually impossible for marketing and sales to share information and enhance communication. With the birth and proliferation of software-as-a-service (SAAS) technology over the past five years, the ability to integrate sales and marketing efforts on a unified platform has become widely available. CRM companies like salesforce.com and marketing automation companies like Manticore Technology have tightly integrated their solutions, creating a virtually unified platform, allowing for increased communication and cooperation. The capabilities of integration are impressive. With a clearly defined pipeline marketers are in an ideal position to implement robust pipeline measurement a best practice of top marketers. In the past, communication between sales and marketing was often verbal and the details were vague something like an or direct mail campaign was sent out to 10k leads. Please follow-up. Today, SAAS demand generation technology provides sales with instant access to powerful marketing response behaviors, arming them with insight for increased sales efficiency. They have immediate access to marketing response behavior for leads, including web pages viewed, collateral downloaded and webinars attended, providing insight into their interest. alerts can notify reps when a lead is on the web site gathering information, allowing for timely follow-up. A coherent sales and marketing platform also enables powerful pipeline reporting the next best practice. 3 Pipeline Measurement You can t improve what you can t measure. With a clearly defined pipeline and integrated sales and marketing systems, marketers are in an ideal position to implement robust pipeline measurement a best practice of top marketers. There are two types of metrics to understand about your pipeline. First is how many leads move from one stage to another (the conversion rate) over a defined period of time. For example, from month-to-month, how many leads became prospects; how many prospects became opportunities, etc. With these conversion rates you ll gain powerful understanding of how leads move through your pipeline, allowing you to identify drop-off rates and bottle necks in the conversion process. Once you ve established baseline drop-off rates and conversions you can target particular areas to work to improve the rates. The second type of measurement you want to understand is the thickness of the pipeline in other words the raw number of leads moving through each stage. Use this data to model the results you want to achieve. If you know it takes 200 leads to generate a deal, it s a piece of cake to understand how many leads you need to generate 5 deals. Top sales and marketing execs live and breathe their pipeline report. Make it a top priority at your weekly meeting and continuously look for ways to improve it. page 3
4 4 Automate Lead Nurturing Legacy marketing solutions including web analytics, and content management solutions have each typically focused on a single piece of the marketing puzzle. These fragmented solutions have made it virtually impossible for marketers to take a holistic view of marketing efforts. Let s look at a couple of typical scenarios: 1. A direct mail piece is sent out to 10,000 leads by marketing and one week later a call center calls each lead two times. The contact rate is 10%. Therefore, 90% of the leads are dropped from the pipeline 2. An campaign is executed with an online registration form. Sales calls into the 10% of recipients that register. 90% of the leads aren t re-engaged until the next campaign. Automating these marketing processes allow top marketers to conserve valuable marketing resources while improving lead conversion rates and increasing revenues. The neglected 90% from either scenario offer a huge, untapped opportunity. New demand generation applications have enabled top marketers to tap into this sea of opportunity. Demand generation applications enable marketers to take a programmatic approach to generating leads while virtually eliminating the need for the wide array of point marketing solutions. These solutions allow marketers to automatically re-engage leads based on their behavior. For example, if a lead were to register for a webinar, an introductory from the sales rep that owns the account can be sent to the registrant and a follow-up task can be added to the sales reps calendar automatically. recipients that fail to register can automatically be re-targeted in several days with pertinent material to continue to engage them and move them deeper into the pipeline. Automating these marketing processes allow top marketers to conserve valuable marketing resources while improving lead conversion rates and increasing revenues. 5 Drive Demand from the Top of the Funnel When companies talk about growing their pipeline they have a tendency to look towards sales to evaluate what s in the pipeline and then take action on those leads that are already deep in the pipeline to try to drive them towards closure. While admirable, this is the least efficient way to impact the top line. This is why top marketers focus on the top of the funnel to drive revenue. A quick example will illustrate this. Let s take a look at a typical pipeline below. A company starts with 1,000 leads. By the end of the pipeline, 12 deals close with an average selling price (ASP) of $100k, for total revenue generation of $1.2M. The conversion rates through the pipeline are as follows: Example 1 Lead Suspect Prospect Opportunity Deal Companies Conversion Rate to Next Stage 1,000 20% % 60 40% 24 50% 12 Deals Close Total Revenue $1.2M page 4
5 Now let s assume that the word has come down from top management that target revenues for next quarter are $1.8M 18 deals. If a company were to focus on improving conversion rates near the bottom of the funnel (prospects and opportunities stage) conversion rates would need to look something like this: Example 2 By continuously communicating, educating, and engaging leads with a automated demand generation solution, you ll be Lead Suspect Prospect Opportunity Deal Companies Conversion Rate to Next Stage 1,000 20% % 60 50% (40%) 30 60% (50%) 18 Deals Close Total Revenue $1.8M * Percent in parenthesis is baseline conversion rate. Conversion rates from product to opportunity and opportunity to deal would need to increase by 10-points to reach the goal. An added challenge is the fact that sales is working with a limited number of prospects and opportunities to convert. Now let s focus on the top of the funnel to achieve the $1.8M goal. Here s what the conversion rates would look like. able to increase lead generation and conversion without significant investment in additional marketing programs. Lead Suspect Prospect Opportunity Deal Example 3 Companies Conversion Rate to Next Stage 1,000 26% (20%) % (30%) 94 40% 38 50% 19 Deals Close Total Revenue $1.9M * Percent in parenthesis is baseline conversion rate. To reach the revenue goals, the conversation from lead to suspect and suspect to prospect needs to be increased by 6-points, which is 40% lower in conversion rate as compared to a bottom of the funnel focus. Additionally the pool of available targets is much higher at the lead and prospect levels making the conversion rates more easily attainable. The downside of focusing on the top of the funnel is the timeline to move leads through the pipeline. If a company has a sales cycle of 6-months and they need to improve revenues over a 3-month period, fattening the top of the pipeline will have little impact in the short term. While it s more effective to focus on the top of the pipeline, it requires disciplined planning and execution. How s it possible to fatten the top-part of the funnel without investing significant instrumental capital in lead generation programs? Best Practice Four automated lead nurturing! (best practice four) By continuously communicating, educating, and engaging leads with a automated demand generation solution, you ll be able to increase lead generation and conversion rates by focusing on companies already in your pipeline. page 5
6 Conclusion The days of black-box marketing are over. With the wide availability of SAAS demand generation solutions, B2B marketers now have the tools to develop customized processes for increasing the pipeline through automation. By implementing these five best practices you ll be in a strong position to drive revenues through a combined sale and marketing effort. More importantly, you ll have established a framework for optimizing your marketing efforts and developing the next generation of best practices. About Manticore Technology Manticore Technology is the provider of Virtual Touchstone, a market leading on-demand lead-nurturing solution. Virtual Touchstone enables marketers to effortlessly move sales prospects through the pipeline and feed their sales team invaluable insight in the interests of each lead, thereby reducing sales cycles, increasing productivity, and driving revenue for an organization. Manticore Technology has more than 30 enterprise customers, including The Kellogg Company, International Truck, Riverbed Technology and Net Forensics. Headquartered in Austin, Texas, Manticore Technology is a privately funded company. For more information please visit the company s web site at or call (512) Jollyville Road, Suite 225, Austin TX sales Manticore ( ) tel fax Manticore Technology The Manticore Technology logo, Virtual Touchstone and all other Manticore Technology products and technology names are trademarks or registered trademarks of Manticore Technology. All other products or services mentioned herein are trademarks of their respective companies.
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