secret sauce for revenue: a practical case study
DESCRIPTION
: Marketo is one of the fastest-growing marketing automation software companies in the US, providing lead management resources that assist the sales and marketing teams in the lead management process. Shared marketing automation resources encourage sales and marketing alignment and ensure that all potential customers experience lead nurturing. Online content marketing resources draw in potential customers, who are seamlessly passed onto sales reps who turn these promising leads into revenue for your company.TRANSCRIPT
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Marketo Secret Sauce for Revenue:A Practical Case Study
© 2011 Marketo, Inc.
Jon Miller, VP Marketing and Co-Founder, Marketo
Author of Modern B2B Marketing blog
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Page 2© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Fastest Growing SaaS Company
Year 0 Year 1 Year 2 Year 3 Year 4
SalesforceSuccessFactorsOmniture NetSuiteConstant ContactTaleoMarketo
All revenue numbers normalized to Marketo Year 1
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Page 3© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Highly Efficient Revenue Engine
• 90 cents in Marketing for every $1 in Sales• 80% of revenue directly sourced by marketing• $1.2M annual recurring revenue quota
Q3-08
Q4-08
Q1-09
Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
0.00
0.50
1.00
1.50
2.00
Productivity (1-year New Customer Bookings / $M+S )
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Page 4© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Buying Has Changed Forever
SALES REP SALES REP
BUYER
OLD DAYS: INFO SCARCITY1960s – Recent
TODAY: INFO ABUNDANCE
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Page 5© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
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Page 6© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Names are just names.
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Page 7© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Meaningful interaction with us.
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Page 8© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Qualified, engaged potential buyers.
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Page 9© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Showing buying signs or significant engagement.
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Page 10© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
Qualified as sales-ready by a human.
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Page 11© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo’s Revenue Cycle
All N
am
es
Pro
sp
ect
&
Recycle
d
Lead
AW
AR
EN
ESS
En
gag
ed
Opportunity
Customer
Sale
sLead
MQLSAL
SQL
Nurturing Database
Marketing SDR
Sales
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Page 12© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Risk Reduction
SEO
Social
Scoring
Popular Blogs Definitive GuidesResource Center Marketo TVWebinars
Benefits of Content Marketing
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Page 13© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Early StageThought leadership and best practices to build brand and awareness
Content: When To Ask For Registration
Middle StageBuyers guides, RFP templates and industry information to help structure research
Late StageCompany-specific information to help evaluate and reaffirm selection
NO
YES
YES+ NO
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Page 14© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Short Forms Outperform Long Forms
Short (5 fields)Conversion: 13.4%Cost per: $31.24
Medium (7 fields)Conversion: 12.0%Cost per: $34.94
Long (9 fields)Conversion: 10.0%Cost per: $41.90
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Page 15© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Problems With Self-Submitted Data
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Page 16© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo Prospect Generation 2H2010Source Prospects Cost % Lead Velocity (Days) Lead to Opp Index
Trade Show – Virtual 3,793 $25.44 17% 81 1.03rd Party Email Blast 3,302 $34.65 18% 43 0.5Trade Show 2,703 $221.30 23% 61 1.9Paid Webinar 1,760 $68.50 21% 60 1.0PPC 990 $158.10 45% 42 1.4Content Syndication 536 $82.84 12% 59 0.3Other Paid 208 $187.50 13% 93 1.3Website 2,871 58% 27 2.6Sales Prospecting 1,888 26% 46 2.2Partner Co-Marketing 903 17% 102 1.1AppExchange 353 78% 37 3.4Referral 80 36% 12 1.0Other Inbound 370 100% 19 9.0
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Page 17© 2011 Marketo, Inc. Marketo Proprietary and Confidential
All N
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LeadNurturing
Why Lead Nurturing: Stay in Touch
“The art of maintaining permission to stay in front of your buyers as they educate themselves”
Building relationships with qualified prospects regardless of their timing to buy, with the goal of earning their business when they are ready.
Lead
OpportunityS
ale
sLead
MQLSAL
SQL
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Page 18© 2011 Marketo, Inc. Marketo Proprietary and Confidential
The Value of Lead Nurturing
Fast Leads ( MQL <1 mo)
Slow Leads (MQL >1 mo)
Total Leads (MQL)
Cost / Lead (MQL)
Without Nurturing 20% 6.67% 26.67% $206.00
WithNurturing 20% 20.0% 40.0% $137.50
Source: Actual Marketo data; assumes $55 per prospect 3x!
Marketo ROI Results
Results: 50% more marketing qualified leads from lead nurturing
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Page 19© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Lead Nurturing Relevance
A
B
C
D
1 2 3Stages
1. BUYING STAGES• Early (Pre-MQL)• Mid (MQL)• Late (Opportunity)• Customer
2. BUYING PROFILES• Industry: 82%• Role: 67%• Company Size: 49%• Geography: 29%
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Page 20© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Content - Don’t Panic!
A
B
C
D
1 2 3Stages
1. Short content is good! (YouTube)2. Reuse and repurpose3. Stay ahead of the drip
Start small, think big and adapt quickly
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Page 21© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Other Kinds of Lead Nurturing
Accelerators• Move prospects faster with
relevant “nudges”
Recycled• Nurture based on what you find
Reconstituted• AKA “Wake the Dead”
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Page 22© 2011 Marketo, Inc. Marketo Proprietary and Confidential
The ROI of Lead Scoring
• Higher Win Rates• Shorter Sales Cycles• Higher Revenue Per Rep
Source: CSO Insights
How Easy Is it To Get Information About Prioritizing Sales Efforts?
Other Benefits of Fewer But Higher Quality Leads
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Page 23© 2011 Marketo, Inc. Marketo Proprietary and Confidential
A Framework for Lead Scoring
Explicit InfoWhat the prospect tells you
Inferred InfoWhat you observe or infer
FitAre you interested in them?
• Demographics• Firmographics• BANT
• Data quality• Corporate vs. personal
email• Inferred from IP
(geography, ISP domain)
InterestAre they interested in you?
• BANT• Latent behaviors
(engagement)• Active behaviors (sales
readiness)
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Page 24© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Interest Scoring - Examples
• Early stage content +3• Attend webinar: +5• Visit any webpage / blog : +1• Visit careers pages: -10
Latent Behaviors (Engagement)
• Pricing pages: • +10 regular, +15 detailed
• Watch demos: • +5 overview, +10 detailed
• Mid-stage content +8• Late-stage content +12• Searches for “Marketo” +8
Active Behaviors(Buying Intent)
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Page 25© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Closed Loop Refinement: Top Behaviors
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Page 26© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Identifying Marketing Qualified Leads
21+ Super-Target Lead Lead Lead
9-20 Target Lead Lead
2-8 Other Lead
<2
Engagement <20 20-44 45-89 90+
Buying Intent <6 6-14 15-23 24+
Fit
Inte
rest
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Page 27© 2011 Marketo, Inc. Marketo Proprietary and Confidential
The Marketing-Sales Handoff (SDRs)
• Best place for dramatic improvements in business performance are handoffs between functions
• Benefits of a Sales Development function• Faster, more consistent, & better quality follow-up on leads• Better economics• The human touch enhances lead nurturing• Better data and more metrics• Talent development for sales
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Page 28© 2011 Marketo, Inc. Marketo Proprietary and Confidential
No Lead Left Behind
Day 0 Notification
Day 1 If untouched, reminder
Day 2 If untouched, reminder cc boss
Day 3 If untouched, alert executives
Day 7 If stale, reminder
Day 8 If stale, reminder cc boss
Day 9 If stale, alert executives
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Page 29© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Sales Insight
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Measuring and Proving Marketing’s Impact on Revenue
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Page 31© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Revenue Cycle Modeler
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Page 32© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Filter/Drill into data, e.g. by Program Type, Business Unit, Geography, etc.
Key topic areas:• Balance• Flow• Conversion• Velocity
Trends over time
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Page 33© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo Revenue Cycle Metrics
Opportunities 130 / mo($2,000)
New Customers($5,800)
Leads2,000 / mo($137.50)
Prospects3,800 / mo¾ paid ($73)
¼ unpaid ($0)($55 average)
20%Active Prospect
Database
4.0% / mo 75%
Paid Names
($29.33)
10%UnpaidNames
($0)
40%Inactive (Last 6
Months)
40% of prospects eventually become a lead
80%
80% of all deals follow this model Lead to Sales Lead: 7%
Sales Lead to Opp: 80%1.4 people per Opp1,000 Leads = 40 Opps
9,500 / mo
Lead Type VariantsSource
ChannelDivision
Size
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Page 34© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Conversion and Speed By TypeProspect to Lead
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Page 35© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Conversion Over Time
• Predict conversions from one stage to another over time
• Create plans / forecasts about future
3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 780
10
20
30
40
50
60
70
f(x) = 50.7486452521888 x^-0.57138477143868R² = 0.430133719514154
Marginal Conversion
3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 78 -
200 400 600 800
1,000 1,200 1,400 1,600 1,800 2,000
f(x) = 994.202885818322 x^0.135210727928123R² = 0.95505216364088
Cumulative Conversion
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Page 36© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketing Forecasts
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Page 37© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Key Takeaways
1. Grow revenue by making sales more productive, not just by hiring more reps
2. Focus on the entire revenue cycle, not just the top of the funnel
3. Don’t contact a lead before its time
4. No lead left behind / service level agreements
5. Use forecasting to turn marketing from a cost center into a revenue driver
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Page 38© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Marketo, Inc.901 Mariners IslandSuite 200San Mateo, CA 94404
Direct: +1.650.376-2310
blog.marketo.comwww.marketo.com
JON MILLERVP Marketing
[email protected]@jonmiller2
Contact Me
Download the “Definitive Guide to Lead Nurturing”www.marketo.com/dg2-lead-nurturing
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