Remind me again what those quarterly targets are really after… oh yeah, REVENUE! It’s inevitable, at some point the success of Marketing and Sales is measured by one metric, revenue growth. But surprisingly few organizations take the time to really explore the factors that truly influence growth in revenue.
You’ve probably heard of dozens and dozens of different marketing metrics that are “essential” to marketing and sales. Seems overwhelming - well, not exactly.
In fact, research over the last decade has actually identified a tiny handful of metrics that EVERY organization should be measuring to optimize the lead lifecycle (from lead to prospect to customer). How do we know? Well, Top Performing organizations that consistently achieve as high as 6x industry standard revenue growth are sharing their secrets.
2. About the Research Findings
Top Performers: Respondents that achieved
Top Quartile performance in key KPI’s
TODAY’S STATS Everyone Else: Everyone Else
Total survey responses: 432
Qualified survey responses: 321
Lead Marketing
Prioritization Automation
Gleansight Gleansight
(Nov 2011) (Dec 2011)
Growth in: REVENUE
AVG CLICK-THROUGH
LEAD-TO-SALES CONVERSION
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3. Agenda for Today…
• Managing by Revenue by the numbers:
– Buying Cycle
– Sales Cycle
– Lead Lifecycle
• Define how to actually measure the sales
pipeline?
• Lead Lifecycle Dashboard
• 3 Tactics You Can’t Succeed Without
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4. In a world…
“The Board wants to
raise our sales targets
this year…
I think we need to beef
up our Marketing!”
We need more leads.
Mr. CEO Mary, what will it take
to increase sales by 2x
year-over-year?
“How about we
raise the marketing
budget by 1%.”
“Can we do it?”
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5. One woman fights for success…
Mary
VP of Marketing
What are my
options?
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6. Option 1: Tell Him Yes, and Hope We Can
Mary Marketing Spend + Sales Effort = ?
VP of Marketing
I’m not sure exactly
? how effective my
marketing spend was
? last year?
?
?
# But, we reached
our targets.
“I just don’t know…”
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7. Option 2: Go Check the Numbers
I’ll check my Lead Lifecycle Analytics Dashboard!
Mary
VP of Marketing
It tells me:
• Exactly how many leads I need to reach 2x sales growth.
• Exactly what it will cost me to generate those leads.
• Exactly how I can set realistic expectations with sales
about meeting our targets… If we both deliver on our
plan.
And I can make a tangible
case for why I need a 10%
increase in budget and not
2%.
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8. First the Groundwork
• A basic understanding of key concepts…
• What do Top Performers measure?
• What should you measure?
• What are the best practices for measuring the lead
lifecycle?
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9. Hope Is Not a Strategy
Gleanster Research :
9 out of 10 B2B marketers use
“revenue growth” as the
primary metric for measuring
marketing success.
62% of Top Performers measure
MQL to SAL conversion
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10. What’s MQL and SAL?
…Let’s dive into some key concepts
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11. Demand Generation Concepts
• Buying Cycle What’s with
all the cycles
and circles?
• Sales Cycle
• Lead Lifecycle
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12. The Birds Eye View of Lead Generation
Psst… that’s the Customer
Lifecycle
Leads Prospects Customers
An inquiry into a A qualified A person or
product, a decision making organization that
potential individual with has purchased
prospect. budget and goods or services.
authority to
Expressed interest influence a sale.
in solving a
problem.
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13. The Birds Eye View of Lead Generation
Leads Prospects Customers
Customer Lifecycle
Buying Cycle Sales Cycle Service
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14. 1) Buying Cycle
Email Social Media Banner Ads PR Re-Targeting
Website Video Webinars Advertisements Microsites
Search Mobile Events Direct Mail Affiliations
MARKETING
Attention
Interest
• Known Desire
Problem? • Recognized
need • Seek solution Action
to need
Goal #1: Become a trusted advisor – DON’T SELL!
Goal #2: Relevant communications
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15. 2) Sales Cycle Engagement
• Traditional “funnels” are less useful in the
context of sales these days
– Prospects are educated beforehand
– Sales performance can be predictable
• 71% of Top Performers implement Lead
Scoring to increase sales productivity
– Sales enablement is the name of the game:
• Meaningful value added dialogs
• Marketing shares responsibility
• Minimize sales qualification
• The input and output matter most, not
what happens in-between.
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16. 3) Service
• Marketing tactics used to acquire new
prospects should be applied to existing
customers
• You probably have LOADS of info on your
customers, use it for micro-targeting
– Earn their loyalty with relevant
communications
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17. Lead Lifecycle Management
Metrics and Measurements
Revenue Growth
BUYING CYCLE
MAXIMIZE REVENUE
Cost per Lead
# of qualified leads generated
Close rate on marketing-sourced leads Nurture
Opportunities
Conversion rate
“Not Ready to Buy”
Marketing-sourced deals as share of pipeline
Response rates
SALES CYCLE
Marketing cost per revenue dollar
Cost per lead
Cross-Selling and
Incremental revenue from marketing efforts
Up-Selling
Marketing-sourced revenue
Click-Through Rate
CUSTOMER
Open Rate SERVICE
Bounced Emails
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18. What are the levers that impact revenue?
Hint: There’s more than one.
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19. It’s Not a Handoff… It’s a Team Effort
Leads Prospects Customers
Customer Lifecycle
Buying Cycle Sales Cycle Service
Marketing Marketing Marketing
Sales Sales Sales
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20. Follow the Revenue
Leads Prospects Customers
Customer Lifecycle
Buying Cycle Sales Cycle Service
Revenue
PROSPECTS
Revenue
DROP OUT OF PIPELINE
CUSTOMERS
Revenue
UP-SELLING / CROSS SELLING
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21. There is no Golden Metric
• Revenue is a byproduct of marketing
• Lead Lifecycle Analytics measure the levers that impact revenue
Leads Prospects Customers
Customer Lifecycle
Buying Cycle Measurement SalesMeasurement
Cycle Service
Measurement
Revenue
PROSPECTS
Revenue
DROP OUT OF PIPELINE
CUSTOMERS
Revenue
UP-SELLING / CROSS SELLING
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22. What should you measure?
Leads Prospects Customers
Customer Lifecycle
Buying Cycle Sales Cycle Service
When the prospect
Inquiry. Sales Accepted Lead (SAL)
purchases they become a
(Unknown buying intent) = Prospect
customer , requiring ongoing
service and support.
Customers can also be
Marketing Qualified Leads Sales Qualified Lead (SQL) nurtured to encourage up-
(MQL). = Valid Opportunity selling and cross-selling.
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23. Back to Mary
Mary
VP of Marketing • Exactly how many leads I need to reach 2x sales
growth.
• Exactly what it will cost me to generate those
leads.
• Exactly how I can set realistic expectations with
sales about meeting our targets… If we both
deliver on our plan.
• How do I justify more budget?
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25. Lead Lifecycle Analytics Dashboard
Period of Measurement: _____________________
Spend / Channel Cost per Marketing SQL to Closed Sales Ratio
Qualified Lead
SALES SUCCESS METRICS
MARKETING & SALES ALIGNMENT METRICS
Use as basis for optimization
MARKETING SUCCESS METRICS
# Inquiries / Channel Total # of Sales Accepted Average Deal Size
Leads (SALs)
Automate with technology Track in CRM
Total # of Inquiries
Ratio of MQL to SAL Sales Cycle-Time
Track with: web
analytics, marketing
automation, search Use as basis for optimization Average sales cycle length
analytics, etc.
LIFECYCLE REVENUE
Total # of Marketing Cost per SAL # SQL Not Ready to
Qualified Leads (MQLs) Purchase
Add Sales overhead to
METRICS
marketing spend Sent back to marketing
Ratio of Inquiry to MQL Total # of Sales Qualified Cross-Selling & Up-Selling
Leads (SQLs) Revenue Growth/Decline
Use as basis for optimization Track in CRM
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26. Lead Lifecycle Analytics Dashboard
Period of Measurement: _____________________
Spend / Channel Cost per Marketing SQL to Closed Sales Ratio
Qualified Lead
SALES SUCCESS METRICS
MARKETING & SALES ALIGNMENT METRICS
Use as basis for optimization
MARKETING SUCCESS METRICS
# Inquiries / Channel Total # of Sales Accepted Average Deal Size
Leads (SALs)
Automate with technology Track in CRM
Total # of Inquiries Ratio of MQL to SAL Sales Cycle-Time
Track with: web analytics,
marketing automation, search
Use as basis for optimization Average sales cycle length
analytics, etc.
LIFECYCLE REVENUE
Total # of Marketing Cost per SAL # SQL Not Ready to
Qualified Leads (MQLs) Purchase
Add Sales overhead to
METRICS
marketing spend Sent back to marketing
Ratio of Inquiry to MQL Total # of Sales Qualified Cross-Selling & Up-Selling
Leads (SQLs) Revenue Growth/Decline
Use as basis for optimization Track in CRM
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27. Lead Lifecycle Analytics Dashboard
Period of Measurement: _____________________
Spend / Channel Cost per Marketing SQL to Closed Sales Ratio
Qualified Lead
SALES SUCCESS METRICS
MARKETING & SALES ALIGNMENT METRICS
Use as basis for optimization
MARKETING SUCCESS METRICS
# Inquiries / Channel Total # of Sales Accepted Average Deal Size
Leads (SALs)
Automate with technology Track in CRM
Total # of Inquiries Ratio of MQL to SAL Sales Cycle-Time
Track with: web analytics,
marketing automation, search
Use as basis for optimization Average sales cycle length
analytics, etc.
LIFECYCLE REVENUE
Total # of Marketing Cost per SAL # SQL Not Ready to
Qualified Leads (MQLs) Purchase
Add Sales overhead to
METRICS
marketing spend Sent back to marketing
Ratio of Inquiry to MQL Total # of Sales Qualified Cross-Selling & Up-Selling
Leads (SQLs) Revenue Growth/Decline
Use as basis for optimization Track in CRM
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28. Lead Lifecycle Analytics Dashboard
Period of Measurement: _____________________
Spend / Channel Cost per Marketing SQL to Closed Sales Ratio
Qualified Lead
SALES SUCCESS METRICS
MARKETING & SALES ALIGNMENT METRICS
Use as basis for optimization
MARKETING SUCCESS METRICS
# Inquiries / Channel Total # of Sales Accepted Average Deal Size
Leads (SALs)
Automate with technology Track in CRM
Total # of Inquiries Ratio of MQL to SAL Sales Cycle-Time
Track with: web analytics,
marketing automation, search
Use as basis for optimization Average sales cycle length
analytics, etc.
LIFECYCLE REVENUE
Total # of Marketing Cost per SAL # SQL Not Ready to
Qualified Leads (MQLs) Purchase
Add Sales overhead to
METRICS
marketing spend Sent back to marketing
Ratio of Inquiry to MQL Total # of Sales Qualified Cross-Selling & Up-Selling
Leads (SQLs) Revenue Growth/Decline
Use as basis for optimization Track in CRM
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29. Lead Lifecycle Analytics in Action
• Exactly how many leads do I need to reach 2x sales
growth?
Assumptions:
• Using predictable marketing channels: web, search, email
• Average Deal size is known
• Average SQL to Close Ratio is known
Period: Quarterly Period: Quarterly
Formula Formula
Inquiries 1000 Inquiries 2544
Ratio to MQL 40% Ratio to MQL 40%
MQL 400 1000*.40 MQL 1018 2544*.40
?
Ratio to SAL 80% Ratio to SAL 80%
SAL 320 320*.80 SAL 814 1018*.80
Ratio to SQL 89% Ratio to SQL 89%
SQL 285 285*.89 SQL 725 814*.89
Ratio to Close 12% Ratio to Close 12%
Closed Sales 34 34*.12 Closed Sales 87 87*.12
Average Deal Size $23,000 Average Deal Size $23,000
Expected Sales $786,048 Expected Sales $2,000,000
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30. Lead Lifecycle Analytics in Action
• How do I justify more budget?
If Marketing and Sales performance
remain consistent then:
Period: Quarterly Period: Quarterly
Formula Formula
Inquiries 1000 Inquiries 2544
Cost per MQL = $345
Ratio to MQL 40% Ratio to MQL 40%
MQL 400 1000*.40 MQL 1018 2544*.40
Ratio to SAL 80% Ratio to SAL 80%
To reach $2M in Sales, I need 320*.80
SAL 320 SAL 814 1018*.80
$345 x 1018=SQL
Ratio to 89% Ratio to SQL 89%
SQL 285 285*.89 SQL 725 814*.89
Ratio to Close 12% Ratio to Close 12%
$351,210… aSales increase in34 34*.12
Closed 9% my Closed Sales 87 87*.12
budget! Deal Size
Average $23,000 Average Deal Size $23,000
Expected Sales $786,048 Expected Sales $2,000,000
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31. Awesome, but does anyone do this?
• Yes… almost
• Check out the stats on Top Performers
# Marketing Sourced Leads (Inquiry) 79%
# Marketing Qualified Leads 71%
Conversion Rate from Inquiry to MQL 62%
Marketing Sourced to Pipeline Ratio 54%
Response rates 49%
Marketing Cost per Revenue Dollar 42%
0% 25% 50% 75% 100%
Top Performers
Source: Q4’11 Marketing Automation, n= 378
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32. How do Top Performers Calculate Metrics
Currently Using Tool
100% 96%
85% 82%
75%
59%
50% 43%
24% 23%
25% 16%
0%
Web Analytics Stand-Alone Email Marketing Microsites
Marketing Tool Automation Tool
Top Performers Everyone Else
Source: Q4’11 Marketing Automation, n= 378
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33. Top 3 Critical to Success Factors for
Top Performers
(Tactics you can’t succeed without…)
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34. 1) CRM Integration is Key
*38% *29%
*Percentage of Top
WEB LANDING Performers that integrate
ANALYTICS PAGES technology with CRM
*58% *46%
EMAIL MARKETING
MARKETING AUTOMATION
CRM DATA
WAREHOUSE
Other Channels (Less frequently integrated)
DIRECT MAIL DIGITAL SIGNAGE
BUSINESS
FULFILLMENT MOBILE MARKETING INTELLIGENCE
SOLUTION
DIGITAL SIGNAGE
WEB CONTENT
MANAGEMENT DIGITAL ASSET
MANAGEMENT
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35. 2) Standardize Definitions for Measurement
• 83% of Top Performers document the definitions for:
– Marketing Qualified Leads
– Sales Accepted Leads
– Sales Qualified Leads
• Lead Scoring with Marketing Automation tools is a form
of standardizing definitions
• Be consistent about measurement and calculations
– You can’t benchmark on a moving target
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36. 3) Let Technology do the Heavy Lifting
• Turn to technology for multi-channel measurement
– More channels = more measurement
• Email, Website, SEM, Webinar Integration, Social Media Integration
• Keep as much of the measurement in a system as
possible
– 2 out of 3 Top Performers adopt standardized out of the box
metrics from Marketing Automation
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38. Guide to Lead Lifecycle Analytics
Deep Dive: Lead Lifecycle Analytics
Download for free on
www.gleanster.com
http://www.gleanster.com/reports/reports/lea
d-lifecycle-analytics
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