1. WHITE PAPER | ENGAGEMENT SYSTEMS
improving crm investments
opTiMiziNG ThE cuSToMEr lifE cYclE wiTh
iNTElliGENT MArkETiNG AuToMATioN
2. WHITE PAPER | 1
InTEllIgEnT MARkETIng AuToMATIon EMPoWERs
CoMMunICATIon THRougH TECHnology
The technology evolution is replacing live human interaction. GpS systems give better directions
than a passenger with a map. Elementary schools have changed their curriculum to better prepare
students for the day computers become smarter than human beings. Many people spend more time
with their cell phones, ipods® and Blackberries® than with other people. And yet most people feel
more connected to their friends and families today, than they did before the advent of mainstream
technology.1
This is also true in today’s business environment, where the basic premise of relationship building
through good communication is growing more dependent on technology. however, people still buy
from people, not from computers. crM systems promise results through improved communication
with prospects and customers, yet most companies are still struggling to figure out how to make that
happen and to realize a return on the investments made in these systems.
read on to discover why crM systems have failed to effectively build customer relationships, and to
learn how to reverse that trend by better utilizing these systems in combination with the customer
life cycle to increase sales and reduce costs.
PART onE: AssEssIng THE CuRREnT sITuATIon
the truth About Lead generation And Follow Up
whether the marketing staff size is one or many and consists of internal employees, agencies or
consultants, their primary responsibility is to be the creator and keeper of the brand. Through the
creation of advertising and marketing materials, marketing staffs focus on consistently getting the
word out about the company, resulting in brand awareness, but not necessarily more revenue.
Typically marketing departments are responsible for lead generation and are routinely measured on
the quantity of leads delivered to sales, with little attention to the quality of those leads. Trade shows
are a perfect example. Small fortunes are spent on booth displays, marketing materials and travel
expenses. The result: a considerable number of “leads” in the form of business cards collected at
the event. however 80% of these leads never receive any follow up.2 The internet has also changed
lead generation by making it easy to collect large amounts of prospect data. using information and
entertainment as bait to capture contact data, masses of leads are dumped into crM systems. The
reality is that the majority of leads today do not go through a formal qualification process and, if not
1
pew internet and American life project, 2008
2
center for Exhibition industry research (cEir)
3. WHITE PAPER | 2
immediately ready to purchase, are deemed unqualified prospects by sales. Buried in all those leads
are qualified prospects who will buy at some point in the future, but they go unnoticed.
As marketing automation platforms become the latest panacea to fix crM systems, marketing
70% of consumers
departments have taken advantage of the opportunity to communicate with prospects and customers
interviewed said they were
using automated methods. for most this means a dependence on email only; sending auto-response
“more likely to respond to
“thank you” emails, or generic email messages that are personalized and “dripped” to the customer
or remember something if
or prospect over a period of time. however, even the best communication makes no impact if it is not
it is communicated by
received. Email appears to be delivering the message, but unfortunately email can be a hit or miss
mail and email.”
medium. That great prospect that is truly interested, or customer who is ready to buy more, is not
Quadrangle always getting the message.
closed sales, not Leads, pay the Bills
for most companies, the sales process does not change after a crM system is implemented, other
than lead and customer information is now being stored in this central repository. Most salespeople
Today, 80% of all sales are feel that adding and updating prospect and customer information is just another administrative task
made on the 5th-12th contact. they don’t have time for, and they perceive crM as one more way for management to keep tabs on
15 years ago it took only an their activities. They don’t recognize any tangible benefit in being able to perform their role more
average of 2-4 contacts before effectively.3 As a result, many companies become frustrated over the lack of adoption by their sales
concluding a sale. staff, and struggle to find a way to persuade them to utilize the crM system. however the underlying
reason for poor crM adoption by sales people is often overlooked: closed sales, not leads, pay their
The National Association of Sales Executives
bills, feed their children, and pay for their new house.
Because of the monthly or quarterly sales cycle, salespeople still cherry pick the leads that will close
in time to hit the next commission check. prospects that are not buying in the immediate future
fizzle away in the abyss of the crM system, untouched by sales and receiving occasional, if any,
communications from marketing.
the Battle Between sales And marketing
optimizing any crM system requires aligning sales and marketing to function as a team. however,
lack of agreement on metrics, what makes a lead qualified, the amount and types of marketing
material needed, and who is responsible for executing marketing communications tends to drive
them in different directions, instead of bringing the two departments together. This becomes even
3
“The challenge in crM is really specific to the sales and marketing applications. Much of the (crM) software on
the market today helps automate process, but doesn’t necessarily provide incremental value back to the user.
Salespeople often complain that crM or SfA is just an administrative burden, and does little more than prove
to their boss that they are doing their job. So adoption wanes, and users go back to using familiar tools like
spreadsheets, databases or even just rolodexes.” -robert Bois, research director for AMr research
4. WHITE PAPER | 3
more complicated when consultants, agencies and contract employees provide all or a portion of the
company’s marketing.
finger-pointing between sales and marketing begins with the lack of agreement on shared metrics. in
times of significant growth, both sides claim victory, and in challenging times, it’s easy to assign blame
to the opposite party because there’s no clear end result that measures mutual success.
As often occurs, marketing successfully generates a large quantity of leads, but sales stops following up
on the leads when the majority are not ready to buy in the near term. without agreement on specific
qualification criteria, both teams become disenchanted.
The battle rages on as sales and marketing can’t agree on what marketing methods and materials
are needed. Traditionally, some companies get bogged down creating the materials to be used in
conjunction with a crM system. white papers, emails, descriptions of products and services, case
studies, websites, blogs… the list goes on and on as sales demands more from marketing, while
marketing can’t possibly provide materials for every unique situation.
one of the core principals of customer relationship Management is maintaining consistent
communications with prospects and customers. Yet neither team can afford to spend valuable time
to deliver personalized, non-automated marketing communications. As a result, marketing creates
generic materials to promote the company and generate more prospects, often with little thought
about nurturing those prospects and retaining current customers. The battle between sales and
marketing escalates over who should be responsible for lead nurturing and customer retention.
Healthy investment, Unhealthy results
The investment in crM and marketing automation systems is both strategic and financial. Strategically,
it signifies a commitment to fostering prospect and customer relationships, and creates a central data
repository for data-driven decisions. financially, the purchase decision is tied to an roi figure that must
be met.
There are reasons why 50% of business and iT executives are not satisfied with their crM applications.
it didn’t meet initial expectations and didn’t quickly return the value they had planned for.4 upon
introduction of a crM system, the focus often becomes getting marketing to generate leads to put in
the system, and finding a way to make sales actually use the system. The outcome quickly reflects the
lack of focus on the end game: an effective lead process that generates more sales. The result: sales
don’t go up, costs increase, and finger-pointing between the two departments becomes prevalent.
4 forrester research Best practices: Getting the Most from your crM Deployment - July 2007
5. WHITE PAPER | 4
companies become focused on making the crM system work for them, forgetting that the real value
The real value of a crM system of the system is making it work for potential buyers and current customers.
is making it work for customers
and potential customers.
PART TWo: HoW To gET MoRE FRoM youR CRM sysTEM
Define And Understand the customer Life cycle
Just as businesses go through a life cycle, prospects and customers also follow a life cycle in their
interaction with a company. Not all customer life cycle stages are the same. Depending on the
product or service being sold, the stages and length of time in each stage can vary. Generally there
are five stages to a customer life cycle:
CoMMon CusToMER lIFE CyClE sTAgEs
sUspect An unqualified lead who is an information gatherer. This prospect has
unknown potential.
QUALiFieD is qualified to become a customer and needs information throughout
prospect the buying process to guide a purchase decision.
neW has made an initial purchase and needs to be assimilated into a partnership
cUstomer to avoid returning to the previous vendor or suffering from buyer’s remorse
that could impact long-term sustainability. This adjustment period builds the
foundation for rapid growth and repeat business.
estABLisHeD has made repeat purchases over time and is in the growth and maturity
cUstomer stage of the relationship. has a need for education on new products and
services, and may have unmet needs; potential for up-selling and cross-
selling. May be a key target for competitors.
DecLining purchases are in decline or time between purchases lengthens. holds potential
cUstomer for defecting to a competitor or going out of business.
Figure 1.1
6. WHITE PAPER | 5
figure 1.2 displays what a common customer life cycle looks like for a company with multiple repeat
purchases throughout the life of the customer.
THE CusToMER lIFE CyClE
lead generation lead nurturing Assimilation growth/Maturity Recession
suspects qualified prospects new customers established customers lost/declining customers
revenue
Figure 1.2
realign sales And marketing efforts to enhance custom growth
Breaking down the stages of the customer life cycle and then identifying where sales and marketing
efforts are being applied, highlights where efforts are misaligned and can lead to a revised strategy
regarding resource allocation. Not all companies apply resources in the same manner, but for
most companies figure 1.3 demonstrates where sales and marketing efforts are being focused in
comparison to the customer life cycle.
7. WHITE PAPER | 6
THE CusToMER lIFE CyClE
Comparing Revenue to Sales and Marketing Effort
lead generation lead nurturing Assimilation growth/Maturity Recession
suspects qualified prospects new customers established customers lost/declining customers
marketing
effort
sales effort
revenue
Figure 1.3
To make any crM system a revenue-generating machine, communication must match the needs
of prospects and customers. figure 1.3 highlights that marketing efforts and budgets are typically
focused on the front end of the cycle – generating leads – often leaving only a small investment
remaining for building trust and an ongoing relationship through the critical life cycle Stages of lead
nurturing, establishing new customer relationships, and fostering customer retention. loading up the
front end of the cycle, only to lose revenue at the back end, sets up a stagnant cycle that results in flat
sales and disappointing growth.
THE CusToMER lIFE CyClE
Comparing Revenue to Marketing Effort
lead generation lead nurturing Assimilation growth/Maturity Recession
suspects qualified prospects new customers established customers lost/declining customers
marketing
effort
Majority of Marketing Resources Lack of Marketing Resources
Lack of Marketing Resources
revenue
Figure 1.4
8. WHITE PAPER | 7
reallocating marketing resources to give better, more focused attention to prospects and customers
throughout the customer life cycle results in a shorter amount of time to turn a qualified lead into a
new customer, faster assimilation of new customers, and a much longer growth and maturity phase.
(figure1.5)
THE CusToMER lIFE CyClE
Reallocated Marketing Resources
lead generation lead nurturing Assimilation growth/Maturity Recession
suspects qualified prospects new customers established customers lost/declining customers
Marketing Effort
Moved To
improved Entire Customer
marketing Life Cycle
effort
Shorter Lead
Nurturing & More Time in
Assimilation for Growth &
New Customers Maturity
improved
sales effort
improved
revenue
Figure 1.5
Although not all prospects and customers behave in the same way – nor do all customer life cycles
look the same – the knowledge and application of identifying and mapping the stages, and then
applying resources to best develop customers, is a worthwhile effort. By identifying the critical
communication points for each stage of the life cycle, and then allocating resources to focus on those
critical points, the crM system can become a viable tool to achieve increased revenue.
9. WHITE PAPER | 8
The final step in aligning sales and marketing efforts with the customer life cycle is to determine
the objective, strategy, tactic, timing, message and offer for the communications to be applied at the
various stages of the cycle. Developing a solid communication plan begins with common principles:
What today’s • WHo wants or needs to hear from us?
buyer is saying: • HAt do they need to see or hear to make a decision?
W
• ducate me when I’m
E o WHAt are they trying to decide? it is not necessarily just a purchasing decision.
ready to learn, not when other information may be needed to take the next step in the buying process.
you want to teach me. • Hen do they need to see or hear the information?
W
• on’t hound me if I’m
D • Here would they like to receive the information: in the mail, via personal visit,
W
not ready to buy, but telephone, email or internet?
keep in touch. • nderstand WHy they want or need the information to make sure the communication is
U
• e there for me when I’m
B relevant and speaks to their situation.
ready to buy, not when
• oW should the information be conveyed: conversation, chart, graph, research paper,
H
you want to make a sale.
product brochure, demonstration, etc.?
• on’t forget that I have
D
needs after i’ve become using the data within the crM system, companies can refocus their marketing communications
an established customer. strategies on the buying process of prospects and the entire customer life cycle. Marketing activity
• want to feel like I’m
I should support long term sales growth by nurturing relationships among qualified prospects and with
important to you. current customers. This allows sales to focus more effort on prospects that are immediately ready to
buy to successfully create new business revenue and protects the organization’s investment in the
current customer base.
marketing And sales: partners in revenue growth
What sales and marketing
staff want from Getting sales and marketing to work together seems like an obvious solution. however, historically
a CRM system: their differing incentives, goals and metrics have often created an adversarial relationship resulting
• lerts when someone
A in inadequate utilization of the crM system. To align these two teams, create shared goals, and break
needs to be contacted so down the preconceived ideas about their roles in supporting one another.
guesswork is eliminated
• limination of excess
E Traditionally, marketing is measured on the quantity of leads generated as reflected by the
administrative work misleading metric of “cost per lead generated.” Salespeople often ignore or inaccurately
• way to automatically
A disqualify leads, resulting in two thirds of disqualified leads making a purchase from someone
deliver our relevant, else.5 Determining what makes a prospect qualified must become standardized, so all subjectivity
personalized is eliminated. with the appropriate add-on technology, prospect behaviors can be analyzed and
communications matched to different stages of the buying process to help determine how close the lead is to making
• etrics and reporting
M
5 70 percent of all incorrectly disqualified leads purchased the product or service from another vendor. - wendover
that supports a
corporation
unified goal
10. WHITE PAPER | 9
a purchasing decision. however, it is critical that these criteria be agreed upon by both sales and
marketing in order to gain buy-in from both parties.
Buying processes are longer today, and for complex products and services it can take months to
more than a year to close a sale. however, 90% of companies that implemented a structured sales
process in their crM system didn’t match the steps to their customers’ buying process.6 poorly timed
sales processes that force a prospect into a premature purchasing decision will cause the prospect to
become annoyed with the communication. They will assume future communications are irrelevant
and will eventually “tune out” all attempts at engagement. Aligning both sales and marketing efforts
to the customer buying process is critical for success.
An attentive, correctly-timed approach to nurturing prospects until they are ready to purchase is a
change for both sales and marketing. This requires the reallocation of the marketing budget to focus
on creating and delivering communications to qualified prospects. Nurtured through automated
marketing touches, prospects “raise their hand” by demonstrating behaviors that indicate they
are ready for a live discussion with a salesperson. This makes the salesperson more efficient and
better converts marketing dollars into sales dollars, thereby improving roMi (return on
Marketing investment).
Both sales and marketing should agree upon what marketing support is needed to achieve their
shared goals. it is important not to alienate the marketing team by suddenly demanding multitudes
of new programs and support materials that they are not adequately prepared to create. lack of
expertise or general lack of resources should be taken into consideration and a plan developed to
provide training or additional resources to develop the required materials.
Developing trust and rapport between sales and marketing begins by holding both accountable for
a common desired result: continual sales growth. in essence, sales and marketing must share the
common goal of increasing revenue and become one voice to the prospect or customer. The crM
system becomes the data collection and analysis point to determine what the prospect or customer
needs to see or hear next, and when that communication should take place.
implement intelligent marketing Automation to Deliver personal touches
A crM system becomes a very expensive and resource intensive data collection device if the data
is not used to impact a company’s growth and profitability. To put crM into action, a marketing
automation solution must be integrated for every stage of the customer life cycle. leads are
nurtured through the buying process with relevant, timely information that naturally moves them
toward a purchasing decision. customers are informed and given the attention they need to increase
6 robert J Schmonsees - “Escaping the Black hole,” Thomson, 2005
11. WHITE PAPER | 10
the amount of time they spend in the Growth and Maturity stage. And finally, lapsed customers are
quickly identified for immediate win-back initiatives.
Marketing automation comes with a variety of bells and whistles, but certain functionality must be
present to improve sales efficiency, increase effectiveness of marketing campaigns, and earn the trust
of both sales and marketing.
Triggers are the rocket science behind marketing automation. identifying prospect and customer
71% of sales and marketing activities and behaviors that indicate the need for more or less contact. Triggers are the intelligence
executives have no process that make everything else happen. They detect when a prospect has moved further into the buying
for identifying lost or inactive process and when a current customer’s purchasing pattern has changed. These triggers can be simple
customers and 68% have or complex depending on your business, industry and capabilities. Some common triggers include:
no process to predict how
customers behave before • a prospect changing to a customer
switching to a competitor. • a customer requesting a new product demonstration
• a prospect’s status changing from “cold” to “warm” as identified through predetermined behaviors
customer Sat 2007 Survey
• a customer missing a regularly placed seasonal order
• a prospect visiting your website multiple times within the same week
• online shopping cart abandonment
• algorithms and predictive models that indicate probability of purchase
with programmed business rules, triggers can then automatically initiate the appropriate
actions, including tasks for personal attention from sales, and automatic electronic and printed
communications from marketing.
intelligent marketing automation eliminates clerical activities for both sales and marketing. No licking
stamps, stuffing envelopes, or sending emails the old fashioned way. The latest technology does all of
that and more, by creating personalized web pages, surveys, dynamic content and imagery specific to
the needs of each individual prospect or customer. intelligent marketing automation then delivers the
information via the medium that is most effective for a particular phase of the life cycle or based on the
recipients preferences: mail, email or online content.
The best marketing automation solutions take efficiency one step further by creating affordable,
personalized communications, delivered to one person at a time. literally sending one mail piece, one
email, or creating one web page, allows relevant content to be delivered at precisely the correct time
for each individual. These targeted and personalized communications connect with each prospect or
customer by only conveying what they want to see or hear at that moment, and eliminate the expense of
emails, mailings and phone calls that go to untargeted individuals.
12. WHITE PAPER | 11
finally, intelligent marketing automation builds trust through information. All prospect and customer
Questions to Ask When behaviors, marketing touches and sales activities are automatically written back to the contact record in
Determining Triggers For the crM system. This provides a 360 degree view of each contact across the organization, along with a
your CRM system: history of exactly what has occurred over time. This allows simple analysis by users, more complex analysis
• hat makes a lead ready for
W for data mining, and data modeling to optimize ongoing efforts. Sales is able to review the marketing
immediate attention? touches that have been delivered to individual prospects and clients, while marketing can use the results
• hat information do our
W of the campaigns to determine changes to the messages, offers, timing and medium. And management
prospects need to see or finally has a tool to measure the impact of the crM system.
hear to make an informed
buying decision?
suMMARy: sIx kEys To EMPoWERIng CRM
• hen do they need to
W
hear it?
using technology to build customer relationships requires six key elements to be in place and working
• hat mediums are
W
together to maximize the investment. Because these strategies are synergistic, one missing piece
most effective for direct
impacts the effectiveness of the other parts. The six critical components to lead an organization to a
communication?
profitable crM solution are:
• Phone Calls
• Email
1. Build a solid communications plan and budget allocation based upon the entire customer life
• Mail
cycle and prospects’ buying process, not the organization’s selling process.
• Online Interaction
2. foster a single unified sales and marketing team charged with mutual short- and long-term
• Personal Visits
goals and metrics to support achieving those objectives.
• hat behaviors indicate
W
3. implement a truly automated marketing solution based on programmed triggers to initiate
a current customer is
and manage communications.
unhappy?
4. Match communications to the needs of the customer or prospect for their stage in the
• hen does up-selling
W
customer life cycle by using personalized multi-channel communications to deliver marketing
make sense?
messages via direct mail, email and website landing pages.
• hat can be done to
W
5. Adopt a system that makes it possible to automatically deploy 1:1 communications, one person
turn current customers
at a time, with individualized content for maximum relevancy without adding administrative
into advocates?
work for sales and marketing.
6. find an affordable add-on solution that allows you to be confident the additional investment
will create a positive roi.
people buy from people, not from computers. At the heart of any business transaction are real,
live people. intelligent marketing automation utilizes technology to communicate personally with