2011 Lead Generation 2011 Lead Generation

Trends and ChallengesTrends and ChallengesJ. David GreenJ. David Green

Director of Best Practices, MECLABSDirector of Best Practices, MECLABS

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• Audience Poll

• Challenges and Trends

• Economics of Demand Generation and Lead Management

• Sales costs and a cost-avoidance argument

• A revenue capacity argument

• Metrics

• Summary – Key Takeaways

Agenda

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Today’s speaker

J. David Green – Director of Best Practices, MECLABS

• Case study: $1B pipeline in 20 months

• Author and co-author of numerous white paper, blog posts, articles, and

the book, The B2B Refinery®

• Speak at MarketingSherpa, DMA, and other events

• 25 years of wide ranging B2B lead generation experience

• Working with large Cisco partner on lead nurturing projects

• Consultant on technology channel marketing

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By J. David Green &

Michael C. Saylor

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MECLABS: A science lab with a consultancy

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• More than 10 years of research

• 1,300+ major experiments

• Over 1 billion emails

• 10,000 sales-paths tested

• Hundreds of publications and

conferences

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Audience poll

• How many direct or indirect sales full time employees do you support with

leads?

• 500+

• 100-499

• 50-99

• 20-49

• Less than 19

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Audience poll

• On a scale of 1-5, how advanced would you say your lead generation

practices are today? (5=best)

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Challenges & Trends

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What is the biggest worry of

innovative B2B marketers?

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• In 2009, 68% of marketers saw generating high quality leads as their

number one business challenge.

• In 2010, the percentage rose to 75%

Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report

The challenge

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For the last three years, marketers have focused increasingly on lead quality.

This focus, in turn, has placed greater emphasis on:

• Data hygiene and enhancement

• Lead nurturing

• Lead scoring

• Funnel metrics

• Alignment

The current economy intensifies C-suite demands on marketing for ROI

The challenge

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What are the content implications

of lead nurturing and lead scoring?

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• More segmentation for relevance (personas, stage of consideration,

verticals)

• Low-production value content (e.g., blogs, raw video)

• More employee writers/thought-leaders

• More re-purposing/multi-purposing

• Content aggregation services through web-crawling and linkage/summary

• Integration of social media into lead nurture streams (as well as a demand

generation tool)

Based on trends in 2010 and projected for 2011,

nurturing and scoring depend on content

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What are data implications of lead

nurturing and lead scoring?

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• Less-end user data capture at the top of the funnel

• Incremental, optional, conditional end-user data capture

• Great focus on data hygiene

• Data appends (account, contact, triggers)

• Account-level modeling (propensity to buy and buying

potential)

• Content extrapolation of problems, function, level, depth

of interest

Based on trends in 2010 and projected for 2011,

relevant content-nurturing requires data

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Economics of demand gen:

The cost of sales follow up

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How does sales leadership see the

economics of lead generation?

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Eight out of ten marketers hand

raw leads straight to sales

Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report

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Decline in lead population through

the funnel’s early stages.

@ up to 5 attempts/lead

& @ 10 dials/hour

Sales-ready leads

Lead scoring, tele-qualifications4 - 71.6 – 2.8

hours

New leads

Filled out web form, called toll-free number, visited booth,

attended webinar, etc.

10040

hours

Valid leads

Insufficient info, bogus info,

not in target market

70 - 8528 - 34

hours

Mountains of leads, molehill of sales

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So what should those funnel

numbers mean in terms of expense?

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Assumes 1,960 hours per year and 19,600 dials.

“Cheap” leads cost a lot of money

Annual cost Hourly cost

Loaded cost/ Field sales rep $ (200,000) $ (102)

Leads Hours Cost/Hour

New leads 100 40 $ (4,082)

Valid leads 70 34 $ (3,469)

Sales-ready leads 7 2.8 $ (286)

100

70

7

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Economics of demand gen:

The cost-avoidance argument

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What financial yardsticks exist in

your company for measuring lead

generation effectiveness?

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• How much time do your

sales people spend

prospecting?

• How much is that

prospecting time costing

your company?

Sales prospecting costs more than a CFO might expect

Source: CSO Insights “Sales Performance Optimization” report, 15th edition: over 1,800 companies surveyed. Copyright © 2009 CSO Insights. All Rights Reserved.

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In this example at 20%

of time spent on sales

prospecting, the entire

marketing budget

equals the portion of

the sales budget

allocated to

prospecting.

Sales prospecting cost ≥ Marketing budget?

Sales prospecting

scenario

Revenue $ 1,000,000,000

Profit $ 100,000,000

Marketing budget $ (50,000,000)

Sales budget $ (250,000,000)

Other expenses $ (600,000,000)

Sales budget

line item

Time prospecting $ 1,000,000,000

Prospecting allocation $ 50,000,000

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Given that $50m budget allocation to sales prospecting from the prior slide, a

$200k loaded cost/field resource is the equivalent of 250 sales people.

($50m sales budget allocation) / ($200k/rep) = 250 reps

Sales prospecting equals a lot of FTEs

Annual cost

Sales budget $ (50,000,000)

Loaded cost/field sales rep $ (200,000)

Sales FTEs 250

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Economics of demand gen:

The revenue capacity argument

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What revenue capacity can lead

generation unleash?

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Sales & Marketing Resource Allocation & the Buying Cycle

Prospecting Selling

Allocated

percent of

sales

resources

0%

100% These reallocated

sales resources

result in

increased

revenue

capacity/higher

sales productivity

More

efficient

sales

resources

Less

efficient

sales

resources

As much as possible, replace

these sales resources with lower-

cost methods of marketing &

telemarketing contact

Nurturing

Buying cycle stages

Lead generation scales sales

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Sales-ready leads increase revenue capacity,

profits and growth

Sales prospecting

scenario

Scalable lead gen

scenario

Revenue $ 1,000,000,000 $ 1,100,000,000

Profit $ 100,000,000 $ 190,000,000

Marketing budget $ (50,000,000) $ (60,000,000)

Sales budget $ (250,000,000) $ (250,000,000)

Other expenses $ (600,000,000) $(600,000,000)

Sales budget line item

Time prospecting 20% 10%

Prospecting allocation $ (50,000,000) $ (25,000,000)

• 10% more selling time

• $10m increase in

marketing budget

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Economics of demand gen:

Key pipeline metrics for forecasting and analysis

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What funnel metrics can improve

sales and marketing planning,

forecasting and efficiency?

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Source: CSO Insights “2010 Lead Generation Optimization” report. Copyright © 2010 CSO Insights. All Rights Reserved.

For the first time in the seven years of this

report, a slim majority (51%) of responding firms

now track the ROI of their marketing campaigns.

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• Complex sales make

forecasting, analysis

and funnel-tuning

difficult

• Discrete funnel

conversion stages

improve forecasting

accuracy and narrow

problem identification

• Feedback loops can

improve upstream and

downstream stages.

Copyright © MECLABS 2010, all rights reserved.

Bu

ying

cycle

New leads

Registered leads

Rules-validated leads

Phone-ready leads

Phone-validated leads

Sales-ready leads

Sales-validated leads

Sales outcomes

Sales-forecasted opportunities

75%

to

95%

Measuring discrete funnel stages improves

forecasting and operational efficiency

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Key takeaways

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• Lead quality concerns are driving initiatives in lead nurturing and lead

scoring, which both are driving numerous marketing changes

• Sales prospecting offers marketers a financial yardstick for measuring

lead generation effectiveness

• The cost avoidance argument:

• Sales qualification is very expensive

• Sales prospecting is very expensive

Key takeaways

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• The revenue capacity argument: lead generation can improve the sales

and marketing expense-to-revenue ratio (sales scalability and sales

productivity)

• The right metrics can improve forecasting and drive continuous funnel

improvement

Key takeaways

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#b2bleadgen

Contact information

Dave Green

Director of Best Practices, MECLABS

Co-Author of The B2B Refinery®

dave.green@meclabs.com

409-770-0710

MECLABS.com ∙ MarketingExperiments.com

MarketingSherpa.com ∙ StartWithaLead.com

StartWithaLead.com/LinkedIn

J. David Green &

Michael C. Saylor

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