The New Formula for Generating High Quality Leads in 2011
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1 PRESENTED BY The New Formula for Generating High Quality Leads in 2011 Marketers Shifting Focus to Web-Based Formats for Higher Conversions SPONSORED BY
2 The New Formula for Generating High Quality Leads in 2011 Executive Summary 3 Quality Over Quantity 4 Generating Qualified Leads: What is Working 5 Tapping Into the Power of the Web 6 Counting on Lead Conversion 8 The Emergence of Interactive Mediums 9 Segmentation Strategies 9 Conclusion
3 Executive Summary: In the early stages of demand generation programs, most marketers are understandably focused on gathering as many leads as possible. The common logic for newcomers to this discipline is lead volume is critical in order to fill the pipeline and feed a hungry sales team. However, as demand generation best practices have matured, many experienced marketers have found that simply pouring leads into the top of the funnel doesn t always filter down to real sales opportunities. In fact, many firms have learned the hard way that simply focusing on a high volume of leads can be inefficient for marketing and sales. As part of this shift, most marketers are moving from broad outreach to high numbers of untested names to a strategy of engaging qualified targets. For those progressive firms that have adopted this targeted approach, most have found that profiled, cultivated leads convert faster often at substantially higher deal values. Research bearing out the shift to quality over quantity has been mounting over the past 12 months. In its 2011 B2B Benchmark Report, Marketing Sherpa found that generating high quality leads is the top priority of marketers. The need for quality leads was cited by 78% of respondents, a gain of 9% over the previous year. Further corroboration comes from a recent DemandGen Report survey which found that 82% of its readers rank increasing the amount of qualified leads as their number one priority for 2011, compared to only 46% who said increasing lead volume is their top initiative this year. As marketers shift their focus from quantity to quality, industry insiders point out that this approach requires greater emphasis on enabling online and interactive tools that can precisely target and engage the right prospects. Tapping into the new market research, as well as firsthand insights from power users in the online marketing space, this E-book will showcase the strategies, tactics and tools that leading BtoB marketers are employing to improve their flow of quality leads. 3
4 Quality Over Quantity Study after study is finding that lead quality is now considered an imperative for BtoB companies. In the Marketing Profs report titled B2B Marketing Today, respondents said their two top priorities are: Reaching the right decision-makers (46%) Improving lead quality (43%) Yet many organizations have been slow to acknowledge and deal with lead quality snags. The concept of volume alone and the false sense of accomplishment it can breed is among the first things to confront in pursuit of quality leads. We only look at prospects, and a prospect is someone who fits our internally agreed-upon definition, said Maria Pergolino, Director of Marketing for marketing automation provider Marketo. A prospect has to match our profile which includes titles, roles, company sizes, revenue and a number of other key criteria. When stringent rules are applied near the top of the sales funnel to separate genuine leads from window shopping web visitors, long-range inquiries, downloads by non-sales ready individuals, robotic Internet traffic and the like, one outcome is predictable fewer leads. While it s unwise to contradict rigorous qualification, a sharp drop in lead quantity can cause unease among marketers and salespeople accustomed to higher volumes. But experts from top market research firms, marketing consultancies and automation providers say the fear is unwarranted. Awareness about the need for lead quality is definitely there, said Carlos Hidalgo, CEO of BtoB marketing and lead management consultancy The Annuitas Group. The conversations I m having now revolve around people knowing they need to transform but not knowing how to get there. That s why at Annuitas we re such big proponents of developing a process. Part of the struggle that organizations face is aligning sales and marketing, which leads to another set of questions about how to do that. Elle Woulfe, Senior Marketing Programs Manager for marketing automation provider Eloqua, offers a comparable view. Sales often doesn t trust marketing because the quality of the leads passed over has historically been poor, she said. When marketing begins scoring, nurturing and focusing on quality over quantity, they start passing along A-1 and B-1 leads. The challenge for marketers at that point is behavioral, because they have to overcome long-standing trust issues with sales. 4
5 The quality focus means there will be fewer leads, but those leads will be more likely to close. To zero in on the number of sales qualified opportunities delivered by marketing to sales, Woulfe said Eloqua reverse-engineers its own pipeline to assign a revenue figure that marketing is responsible for, and how many sales-qualified opportunities marketing needs to generate to reach a certain revenue target. Compensation is based on achieving this, she added. Amy Bills, Bulldog Solutions The quality focus means there will be fewer leads, but those leads will be more likely to close, said Amy Bills, Director of Marketing for BtoB demand generation consultancy Bulldog Solutions. Everyone s got business goals, Bills added. We ve got to drive in a certain amount of revenue. If you deliver too few leads, no matter how great they are, it won t be enough to achieve goals. For our clients, we sketch out the pipeline. You want a good volume of leads going into the top of the funnel, but you really want to have a tight aperture in the middle. By the time you re handing off a marketing qualified lead, it needs to be of the highest quality. Bills said marketing must back up its activity all the way from revenue by knowing: The business goals of the company with an emphasis on revenue How many inquiries are needed to generate enough marketing qualified leads How many marketing qualified leads it takes to deliver opportunities to sales How many opportunities must convert to meet revenue goals While metrics and lead definitions vary between companies, revenue impact is the deciding factor. I measure effectiveness in two ways: one is cost per prospect, said Marketo s Pergolino. The other metric and one that my pay is actually based on is how many opportunities the sales team creates from the leads marketing generates. I have no control over what opportunities they create, but there is a definition, and they re not allowed to keep working a lead if they don t create an opportunity. I m always driving things from the perspective of where I can find leads that will create the most opportunities for sales. 5
6 Generating Qualified Leads: What is Working Once sales and marketing have reached accord, buyer personas have been developed and content is mapped to prospect roles and funnel phases, tactics come into play. There should be more data about which marketing mediums that are effective in generating higher percentages of qualified leads than about any other part of the new marketing equation. For example, the Marketing Profs report previously cited found the highest-ranked digital marketing vehicles in terms of effectiveness are: Webinars (36%) Search Marketing (33%) Company web sites (28%) The 2010 Lenskold Group / emedia Lead Generation Marketing ROI Study reveals a similar media mix. According to the report, Tactics that engage and educate are considered most effective in driving quality leads, but balancing these with sales-driven offers shows high potential. Asked to rank marketing vehicles based on their ability to drive high value leads likely to convert to sales, respondents gave above-average ratings to: Webinars & seminars (52%) e-newsletters (42%) Product trials (42%) E-books & white papers (35%) Jim Lenskold, CEO of marketing and ROI measurement firm The Lenskold Group, said, The first part of lead management is acquisition; the second part is influencing. If you can take an average lead and, by bringing them down a certain marketing path make them more likely to convert at a higher value, that s managing and driving lead quality. Educational initiatives like webinars are great both in terms of nurturing, and in conditioning leads to achieve a higher value. Tapping Into the Power of the Web According to the 2010 Lead Generation Optimization Key Trends Analysis from CSO Insights, more than 91% of companies worldwide reported increasing new customer acquisition was one of their top strategic marketing objectives for Based on the quantity and quality of leads generated, companies said was their best lead generation source, followed by live events, web site registrations and webinars. The effectiveness of online channels, events and tools coupled with the fact that prospects indicate the web is the first place they look for information makes a strong business case for companies to 6
7 We do response management for a few clients. Where you have more technical users they tend to be really strong consumers of webinars. They generate a lot of activity, and that activity converts at a higher rate. We re seeing responses rates somewhere in the range of 8%-11% on webinars. It s a very content-driven approach. Dan McDade, PointClear increase their investments in webinar software, web page optimization, high-value downloadable content, marketing and search engine optimization, among other core tactics. Optimized company web sites and referrals from partner web sites are widely reported to be very low cost forms of online lead gen. Pay-Per-Click ads are also categorized as being relatively low-cost, although PPC leads can require the more nurturing than other lead types. In the balance, the main thing that online media have in common is cradle-to-close trackability, increasing their appeal. Business consumers are really ripe for interactive now, said Dan McDade, Founder and CEO of prospect development firm PointClear. That includes , web site optimization, social networks like LinkedIn and Twitter, video and other online tactics. In his new book, The Truth About Leads, McDade devotes an entire chapter to the topic, Why Your Sales People Need Fewer Leads, placing himself squarely in the lead quality camp. We believe in multi-touch, multi-media, multi-cycle marketing, meaning that you don t ever use one medium, McDade said. You use multiple media and incorporate those assets into multiple touches over a period of time. To illustrate, he uses the case of a PointClear client who is currently embedding video in its marketing s and getting substantially higher open and click-through rates than they ve ever achieved before. Using another example McDade said, We do response management for a few clients. Where you have more technical users they tend to be really strong consumers of webinars. They generate a lot of activity, and that activity converts at a higher rate. We re seeing responses rates somewhere in the range of 8%-11% on webinars. It s a very content-driven approach. 7
8 I always start with my cost per prospect. For example, to get someone to actually attend a webinar and sit through the entire thing can be difficult, but the return is phenomenal on those that do. Attendees who devote an hour to you are people who are going to buy. Maria Pergolino, Marketo Counting on Lead Conversion Where the rubber meets the road in the lead quality realm is conversion. Again, certain strategies and tactics stand out from the rest. I always start with my cost per prospect, said Marketo s Maria Pergolino. For example, to get someone to actually attend a webinar and sit through the entire thing can be difficult, but the return is phenomenal on those that do. Attendees who devote an hour to you are people who are going to buy. Pergolino added that the cost of a well-executed webinar can be on the high side when promoted through a third party marketing partner site, and if it features a speaker from name-brand research firms. But those who attend are very high quality prospects. Marketo conducts two webinars per month and Pergolino said, It s one of our most effective programs. We also find that someone who watches a webinar is ready to buy sooner rather than later. Industry benchmarks have shown that webinars can convert as much as 10% of registrants into qualified leads, versus only 1-2% for campaigns. No discussion of conversion is complete without including the enormous impact of lead scoring and nurturing through marketing automation platforms. Marketing automation allows access to and information about behavioral lead scoring, said Bills of Bulldog Solutions. You can now a score based on a lead s behavior on your website, what materials they are downloading, what webinars they are attending and so on. Multi-dimensional scoring allows much finer insight into leads, which in turn enables the focus on lead quality. Instead of launching an enormous bucket of leads over the wall to sales, you re launching just those that marketing has determined as high quality, Bills said. Like her peers in the BtoB automation space, Bills says behavioral scoring drastically reduces wasted sales effort and encourages a tighter relationship between the departments as lead credibility becomes a consistent deliverable. 8
9 The Emergence of Interactive Mediums Many marketers are now going to the bleeding edge of interactive to drive qualified leads. For example, a company called ThoughtLead recently presented The Influencer Project: The Shortest Marketing Conference Ever, which took the form of a webinar featuring 60 Speakers in 60 Minutes. The organizers of that event said they generated more than 4,500 new leads and more than 1,000 Facebook fans. In addition adding new twists to interactive web platforms, more marketers are turning to video to engage qualified prospects. Forrester Research has reported that the use of video in campaigns can increase click-through rates by as much as 2-3 times. BtoB video companies including VisibleGains, among others, are removing obstacles to producing engaging BtoB videos for s, corporate web sites or YouTube channels with packaged App-driven tools. Joe Eldridge, VP & Co-Founder of Visible Gains has benchmarked video success as follows: Opt-In rate of greater than 40%; Bounce rates less than 10%; Completion rate greater than 80%; Conversion rate greater than 40%. The 2010 B2B Technology Collateral Survey Report conducted by Eccolo Media found that video use is rising steadily. It states, Video use increased 82% from 2008 to The trend continues with video chalking up a 16% increase in [2010]. We ve anecdotally seen video more widely adopted as a collateral tool in the past 12 months, and we predict that use will continue to grow, both in terms of consumption and in the ways in which it can be creatively applied for marketing communications. Segmentation Strategies Structuring interactive resources to address different stages in the buying cycle has made vast strides in recent years. Specifically, segmentation is the clear discipline of choice for matching content to funnel phases and buyer personas. At the crossroads of segmentation, third party, information-rich content can be positioned to appeal to buyers earlier in the cycle. Further along, messaging and mapped content can be used to help educate buyers who are supporting a decision and want more technical and information specifics on how to use a product. These prospects represent the high quality, high-conversion leads that savvy BtoB marketers are after. 9
10 The technologies that are available today to customize the user experience are incredible, said The Annuitas Group s Carlos Hidalgo. Let s take webinars. They re very effective. And how much more effective are they going to be if I segment my database so I know who I m targeting; that all of the people I m inviting to a given webinar are interested in its topic; so that a segment becomes a microgroup that are more likely to buy? In that scenario, I ll take 20 webinar attendees over 300 any day. What I m going to say to a CMO at the top of the funnel is very different than what I m going to say to a Marketing Manager at the top of the funnel, said Eloqua s Elle Woulfe. At that level our content is often educational and doesn t relate to marketing automation. It s more theoretical, using white boards and thought leadership webinars on topics such as, Why Lead Nurturing is Like Dating and The Habits of Successful Marketers. It s designed to get someone to click and enter our funnel. At Eloqua s Sales Qualified Opportunities phase, content becomes very business case oriented. It s information to help the person at this stage purchase marketing automation, like How Making a 2% Improvement will Impact Revenue it gets very specific. Woulfe said at the bottom of the funnel, Eloqua emphasizes three points: How is marketing automation going to benefit your career? How can you build a business case for this engagement form? How are you going to sell it internally? Relational segmentation is another promising method. In its white paper, How Relational Segmentation Techniques Help Achieve Higher Sales at Lower Cost, PointClear recommends a hybrid model combining Regression Analysis, Tree Analysis and Cube Analysis for optimal results. Pointclear says a hybrid segmentation model makes it possible to: Identify discriminating characteristics among databases and lists Segment into small homogeneous layers (cubes) of like companies Conduct tests to profile and uncover opportunity in those cubes Analyze cubes to find high-return segments and rank them as separate mini markets Use that intelligence to fund the right model for future programs 10
11 Conclusion In a business environment where buyers are making decisions about what companies to engage with using interactive tools, lead quality has become essential. The tools and tactics used to sift through and turn suspects into high-conversion prospects is enabling this fundamental shift. A key feature of the change will be a concentration on fewer more profitable deals. Fortunately there is a clear roadmap emerging to help companies make this transformative journey. A growing body of reputable research quantifies the strategies and tactics that work. Depending on the survey source Marketingprofs, Marketing Sherpa, CSO Insights and DemandGen Report to name a few new customer acquisition with a lead quality focus is the top 2011 priority of up to 91% of BtoB organizations. Meticulous lead qualification is being achieved in innovative ways. These include tighter sales and marketing alignment; transparency and agreement as to what a qualified lead is; the development of an internal process that fosters conversion; and revenue contribution being assigned to marketing. Marketers are on the front lines of this changeover. They are refining the media mix, selecting the most cost-effective forms of engagement targeted s, content-rich webinars, optimized web site landing pages, video, social media and other methods with proven cost/benefit value to capture and nurture leads to meet demanding new revenue expectations. 11
12 About DemandGen Report DemandGen Report is a targeted e-media publication spotlighting the strategies and solutions that help companies better align their sales and marketing organizations, and ultimately, drive growth. A key component of our coverage focuses on the sales and marketing automation tools that enable companies to better measure and manage their multi-channel demand generation efforts. For more information, visit About Citrix Online Citrix Online offers easy-to-use tools that enable people to quickly and securely connect online from anywhere, with anyone: GoToMyPC for remote access, GoToAssist for remote support, GoToMeeting for online meetings, GoToWebinar for web events and GoToTraining for online training sessions. GoToWebinar GoToWebinar is an easy-to-use do-it-yourself webinar tool designed to increase market reach by enabling presenters to connect with up to 1,000 attendees online. With GoToWebinar, you can reduce travel costs, generate more qualified leads at a lower cost and enhance communication with customers, prospects and employees. All You Can Reach for one low monthly flat fee. For a free evaluation of GoToWebinar Corporate, please visit 12
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