lead to-revenue management: marketing's new strategic role, as presented by andre pino at the...

© 2010 Forrester Research, Inc. Reproduction Prohibited2 © 2009 Forrester Research, Inc. Reproduction Prohibited

Lead-To-Revenue Management: Marketing’s New Strategic Role

Andre Pino

Principal Analyst

Forrester Research

October 14, 2010


Marketers striving for a more strategic role, must shift from a lead generation mentality

to a lead thru revenue management mentality


Agenda

The state of B2B marketing

A revenue-focused approach to marketing

Lead-To-Revenue Management

Case Study

Recommendations


Today, a business outcome mentality occupies the executive suite

Revenue and bookings are all that matter.

“Will we meet the numbers for this quarter?”

“How does the sales pipeline look for next quarter?”

“What do we need to do to make sure we meet the numbers this quarter?”

“What is marketing’s contribution and cost?”


Marketing SalesFocus Generating Leads Selling

Org. Visibility Low Visibility Highly Visibility

Contribution Difficult to Judge Easily Judged

Measure Lead Volume & Brand Closed Deals & Revenue Quota

Lead Generation

Deals

But as marketers focus on more leads, the marketing-sales divide widens


Harmful effects of marketing and sales divide

Wasted resources– Marketing leads, collateral, sales tools

– Sales time spent outside of the sales process

– Organizational energy drained

Limits revenue and profitability– Revenue targets missed

– Ineffective marketing spend

CEO and board– Marketing’s value questioned

– Additional investment needed


Root Cause: A Lead-To-Revenue Process Gap

Marketing generates leads

Sales cherry picks and complains about not having enough leads

Marketing compensates by generating more leads

Lead generation Sales process RevenueProcess GapMore lead generation

$$

And even more lead generation

$$$


Agenda

The marketing-sales divide


The Lead-To-Revenue Management model

Case Study

Recommendations


The key to transforming marketing - REVENUE

Deals and revenue are all that really matter– Your CEO is accountable.

– Take the board point of view.

Move from generating demand to actually managing it.

– Lead scoring and nurturing

– Close the loop with sales.

Focus on the continuum from lead to revenue– It will drive the proper actions from marketing.

– The only true way to integrate marketing and sales

– Measure marketing’s contribution and ROI.


A Lead-To-Revenue Management approach

Focuses all processes, metrics, goals, and actions on revenue generation.

Aligns marketing, sales, and company goals.

Defines the continuum from lead to revenue.

Establishes goals and measures progress along the continuum.


Agenda

The state of B2B marketing


Lead-To-Revenue Management

Case Study

Recommendations


What’s needed to transform marketing to a Lead-to-Revenue Management organization?

A Lead-to-Revenue management model that defines the key stages across marketing and sales

Use nurturing processes and analytics to help understand customer buying behavior and nurture prospects not yet ready to buy

Marketing-led sales dashboards to share results and collaborate with a wide audience



• Describes the lead through revenue process• Open and transparent• Organization defined• Establishes the requisite goals to meet the revenue target• Tracks the progress against goal at each point

Nurturing database

Process Stage Lead generation process

Metrics Inquiries and responses

Marketing qualified leads

Definition

Responses to marketing campaigns, activities, and other inquiries

Leads that meet the marketing-defined qualification criteria

Goal

Conversion factor

Revenue

Nurturing Process Sales Process

Nurturing Interactions

SalesQualified Leads

Pipeline Opportunities

Closed Won Deals

Interactions with the marketing qualified lead pool

Leads that meet the sales defined lead qualification criteria

Leads that meet the sales defined opportunity qualification criteria

Closed won deals required to meet revenue goal


Building the modelStart here

Then work backwards

1. Build it with the sales leader.2. Agree on steps, metrics, definitions, and average deal size.3. Calculate goals based on conversion factors.4. Start tracking metrics (LMA and CRM).

Process Stage Lead generation process

Metrics Inquiries and responses

Marketing qualified leads

Definition

Responses to marketing campaigns, activities, and other inquiries

Leads that meet the marketing-defined qualification criteria

Goal

Conversion factor

Revenue

Nurturing Process Sales Process

Nurturing Interactions

SalesQualified Leads

Pipeline Opportunities

Closed Won Deals

Interactions with the marketing qualified lead pool

Leads that meet the sales defined lead qualification criteria

Leads that meet the sales defined opportunity qualification criteria

Closed won deals required to meet revenue goal


Lead-to-Revenue management requires left brain marketing techniques


Left Brain Marketing: A quantitative approach


Data analytics drive the process improvement


And demonstrate marketing’s contribution across the Lead-to-Revenue process


Benefits of Lead-to-Revenue Management

Represents a road map to revenue success.

A vehicle for collaboration and SLA commitment between marketing and sales

Is easily understood by all stakeholders

A data driven approach to:– track progress and predict success (or trouble)

– Provides a simple way to identify areas for improvement.

– Demonstrates marketing’s role in revenue success.


Agenda




Case Study

Recommendations


The tale of a transformed marketing organization

B2B division of a large telecommunications company

Forrester marketing audit

Measured five key areas

L2R best practice deep dive

98% to 8.8%1% to 8%10% to 33+%


Their Lead-to-Revenue management journey

2010200920082007

Chaos

2011 Future

ForresterAudit

Epiphany Pilot Build Execute Evolve & Transform

Lead Management Automation Pilot

LaunchMktg Reorg& Demand

Centre Virtual Team

Vendor SignedRollout begins

Full LMA launchand training

• No Lead Definition or scoring• No Lead tracking• Excel based ‘ad hockery’• 95-100% of ‘leads’ un-actioned

“Houston,We have a problem”

• Proof of concept

• Marketing Automation

• Pilot Demand Centre Concept

• Training• Full Launch• Building

‘Lead Stages”

• Building assets• Launch and

integrate CRM• Lead

Management Program

3.51.0?

• Predictive modelling

• ROI based contention models for contact strategy

• Advanced profiling and data integration

SFAIntegration


Demand management, not just lead generation

The old way

HAND OFF TO SALES

GENERATE

LEADS

CLOSED/WON BUSINESS?

The L2R way

CLOSED/WON BUSINESS.

Total number of handraisers, scored and pre-qualified

Definition agreed upon by Sales & Marketing

Marketing nurtures and hands offto sales when qualified

Sales agrees to work leads Reports progress in SFA

Opportunity identified Now part of pipeline

Booked revenue IDs top-line contribution

SALES QUALIFIED

LEADS

SALES ACCEPTED

LEADS

MARKETING QUALIFIED

LEADS

INQUIRIES

Closed Loop

Tracking

Lead Nurturing

Lead Scoring

TeleservicesWebsite

Community

campaigns

events

e.mailsSEO

Inter-channel


Lead ScoringHow leads are scored Every time we generate a lead, we

gather information about the inquiry

Scoring is built to reflect both behavioural and demographic attributes of the inquiry

Behavioural Clicks Opens Downloads Site visits

Demographic Contact info BANT – Budget, Authority, Need,

Timeframe

Customer Name/Title/Role

Company Email Current Service

Provider Number of units Time of Purchase Notes

Dimension 2009 2010

No quantitative, progressive scoring

No qualitative or behavioral component to score

No way to return leads if they go “cold”


Scores translate to SFA Grades

At or above Marketing Qualified Lead ( >100 points )

GRADE SCORE LEAD GUIDELINES

A 200+ Acquired additional contact information or recorded behaviors indicating a strong bias for action

B 150-199

C 100-149 Acquired basic contact information for a Sales review+

may have asked for a callback or indicated ‘ready now’ to purchase or may have downloaded assets and/or event registrations

Needs further marketing/nurturing activity (<100 points)GRADE SCORE LEAD GUIDELINES

D 79-99 Lead has provided data and/or actioned a campaign, but is not yet deemed a ‘marketing qualified lead’E 50-79

F 1-49


Lead Nurturing and Closed Loop Tracking

• Campaign Flows built to automate campaign processes

• Mapping content to ‘Educate, Consider, Evaluate’

• Score degradation to return stale leads

• Key Learning – we focused on building nurture flows first, before having a critical mass of contacts.

• Now driving hard at acquiring contacts and leads to begin filling the nurture flows that were developed

Dimension 2009 2010No nurturing; no marketing to continue the dialog with prospects

No way to return leads to marketing if they go “cold”


The payoff“Move from generating demand to actually managing it...”

0

2000

4000

6000

8000

10000

12000

Closed

Qualified

Unqualified

Open/Pending

Unread

Inbound Leads Marketing Qualified Leads Touches Sales

Qualified Leads Opportunities Closed Deals

Raw leads from campaigns and

inbound inquiries

Achieved Score threshold or

customer requesting follow

up

Automated nurturing interactions

Sales has accepted lead for followup

Forecasted sales opportunity

Closed won deal

8,000 4,940 4642 3333 1244 402

61% 67% 37% 32%


The “Monday L2R” Report

Based entirely on SFA data Sent to all stakeholders Allows comparison to goals Action oriented & game changing

98% to 8.8%

1% to 8%

Supported Funnel currently at 10%, committing to 33% in 2011

Close Rate has improved from 1% to 8%

Unread Leads have dropped from 98% to 8.8%

The business value

9.6% to 33+%

A Sales – Marketing partnership in the making


Agenda




Case Study

Recommendations


Recommendations to transform your organization

Re-evaluate marketing’s charter– Align marketing outcomes with management expectations and align the

marketing team around one singular “revenue is king” theme.

Build a Lead-To-Revenue Management model– Establish key processes, metrics, and goals spanning the entire process

from inquiry through sales close.

Invest in lead nurturing and analytics– To access, expose, and monitor the lead through revenue process– Close the process gap

Validate and report on marketing’s influence on revenue– Consistently use a single set of reports to run operations and

communicate results to sales, CEO, the board, and other stakeholders.


Summary — be a factor!

Focus on revenue — it’s all that matters to the CEO, board, and company success.

Seize the opportunity to take a leadership position in the revenue generation process.

Take ownership of the end-to-end revenue process.

Commit to the step-wise goals that will make sales successful and ultimately secure the company’s success.

Marketing’s traditional lead generation mentality will no longer cut it in today’s outcome-oriented enterprises.


Andre Pino

+1 617.613.8894

[email protected]

www.forrester.com

Twitter:@apino114

Visit our marketing blog at:http://blogs.forrester.com/marketing/

Thank you

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lead to-revenue management: marketing's new strategic role, as presented by andre pino at the...

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