lead lifecycle analytics
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Lead Lifecycle Analytics Essential Metrics for Perpetual Revenue Growth
Ian MichielsGleanster@InsightFanatic
Sponsored by:
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About the Research Findings
Lead Prioritization Gleansight(Nov 2011)
Top Performers: Respondents that achieved Top Quartile performance in key KPI’s
Everyone Else: Everyone ElseTODAY’S STATS
Total survey responses: 432Qualified survey responses: 321
REVENUEAVG CLICK-THROUGHLEAD-TO-SALES CONVERSION
MarketingAutomationGleansight(Dec 2011)
Growth in:
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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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“How about we raise the
marketing budget by 1%.”
“Can we do it?”
In a world…
Mr. CEOWe need more
leads.Mary, what will it take to increase sales by 2x year-over-year?
“The Board wants to raise our sales targets
this year…I think we need to
beef up our Marketing!”
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One woman fights for success…
MaryVP of Marketing
What are my options?
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“I just don’t know…”
Option 1: Tell Him Yes, and Hope We Can
MaryVP of Marketing
Marketing Spend + Sales Effort = ?
? ?
? ?
#
I’m not sure exactly how effective my marketing spend was last year?
But, we reached our targets.
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Option 2: Go Check the Numbers
I’ll check my Lead Lifecycle Analytics Dashboard!
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%.
MaryVP of Marketing
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• 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?
First the Groundwork
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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
Hope Is Not a Strategy
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What’s MQL and SAL?
…Let’s dive into some key concepts
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• Buying Cycle
• Sales Cycle
• Lead Lifecycle
Demand Generation Concepts
What’s with all the cycles and circles?
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The Birds Eye View of Lead Generation
Leads Prospects Customers
An inquiry into a product, a potential prospect.
Expressed interest in solving a problem.
A qualified decision making individual with budget and authority to influence a sale.
A person or organization that has purchased goods or services.
Psst… that’s the Customer Lifecycle
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The Birds Eye View of Lead Generation
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
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Attention•Known Problem?
Interest•Recognized need
Desire•Seek solution
to need Action
1) Buying Cycle
Goal #1: Become a trusted advisor – DON’T SELL!Goal #2: Relevant communications
EmailWebsiteSearch
Social Media
VideoMobile
Banner AdsWebinars
EventsPR
AdvertisementsDirect Mail
Re-TargetingMicrositesAffiliations
MARKETING
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• 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.
2) Sales Cycle Engagement
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• 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
3) Service
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Metrics and Measurements
Revenue Growth
Cost per Lead
# of qualified leads generated
Close rate on marketing-sourced leads
Conversion rate
Marketing-sourced deals as share of pipeline
Response rates
Marketing cost per revenue dollar
Cost per lead
Incremental revenue from marketing efforts
Marketing-sourced revenue
Click-Through Rate
Open Rate
Bounced Emails
Lead Lifecycle Management
BUYING CYCLE
SALES CYCLE
CUSTOMERSERVICE
Nurture Opportunities “Not Ready to
Buy”
Cross-Selling and Up-Selling
MAX
IMIZ
E RE
VEN
UE
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What are the levers that impact revenue?
Hint: There’s more than one.
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It’s Not a Handoff… It’s a Team Effort
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
MarketingSales
Marketing Sales
Marketing Sales
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Follow the Revenue
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
RevenueCUSTOMERS
UP-SELLING / CROSS SELLING
RevenuePROSPECTS
DROP OUT OF PIPELINE
Revenue
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There is no Golden Metric
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
RevenueCUSTOMERS
UP-SELLING / CROSS SELLING
RevenuePROSPECTS
DROP OUT OF PIPELINE
Revenue
Measurem
ent
Measurem
ent
Measurement
• Revenue is a byproduct of marketing• Lead Lifecycle Analytics measure the levers that impact revenue
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What should you measure?
When the prospect purchases they become a customer , requiring ongoing service and support. Customers can also be nurtured to encourage up-selling and cross-selling.
Marketing Qualified Leads (MQL).
Inquiry.(Unknown buying intent)
Sales Accepted Lead (SAL)= Prospect
Sales Qualified Lead (SQL) = Valid Opportunity
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
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Back to Mary
• 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?
MaryVP of Marketing
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15 Critical Metrics
But, don’t be overwhelmed…
Lead Lifecycle Metrics
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Lead Lifecycle Analytics DashboardPeriod of Measurement: _____________________
Total # of Inquiries
Track with: web analytics, marketing automation, search analytics, etc.
Total # of Marketing Qualified Leads (MQLs)
Ratio of Inquiry to MQL
Use as basis for optimization
Spend / Channel
# Inquiries / Channel
Automate with technology
Ratio of MQL to SAL
Use as basis for optimization
Cost per SAL
Add Sales overhead to marketing spend
Total # of Sales Qualified Leads (SQLs)
Track in CRM
Cost per Marketing Qualified Lead
Total # of Sales Accepted Leads (SALs)
Track in CRM
Sales Cycle-Time
Average sales cycle length
# SQL Not Ready to Purchase
Sent back to marketing
Cross-Selling & Up-Selling Revenue Growth/Decline
SQL to Closed Sales Ratio
Use as basis for optimization
Average Deal Size
MA
RK
ETIN
G S
UC
CESS
METR
ICS
MA
RK
ETIN
G &
SA
LES
ALIG
NM
EN
T M
ETR
ICS
SALE
S SU
CCES
S M
ETRI
CSLI
FECY
CLE
REVE
NU
E M
ETRI
CS
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Lead Lifecycle Analytics DashboardPeriod of Measurement: _____________________
Total # of Inquiries
Track with: web analytics, marketing automation, search analytics, etc.
Total # of Marketing Qualified Leads (MQLs)
Ratio of Inquiry to MQL
Use as basis for optimization
Spend / Channel
# Inquiries / Channel
Automate with technology
Ratio of MQL to SAL
Use as basis for optimization
Cost per SAL
Add Sales overhead to marketing spend
Total # of Sales Qualified Leads (SQLs)
Track in CRM
Cost per Marketing Qualified Lead
Total # of Sales Accepted Leads (SALs)
Track in CRM
Sales Cycle-Time
Average sales cycle length
# SQL Not Ready to Purchase
Sent back to marketing
Cross-Selling & Up-Selling Revenue Growth/Decline
SQL to Closed Sales Ratio
Use as basis for optimization
Average Deal Size
MA
RK
ETIN
G S
UC
CESS
METR
ICS
MA
RK
ETIN
G &
SA
LES
ALIG
NM
EN
T M
ETR
ICS
SALE
S SU
CCES
S M
ETRI
CSLI
FECY
CLE
REVE
NU
E M
ETRI
CS
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Lead Lifecycle Analytics DashboardPeriod of Measurement: _____________________
Total # of Inquiries
Track with: web analytics, marketing automation, search analytics, etc.
Total # of Marketing Qualified Leads (MQLs)
Ratio of Inquiry to MQL
Use as basis for optimization
Spend / Channel
# Inquiries / Channel
Automate with technology
Ratio of MQL to SAL
Use as basis for optimization
Cost per SAL
Add Sales overhead to marketing spend
Total # of Sales Qualified Leads (SQLs)
Track in CRM
Cost per Marketing Qualified Lead
Total # of Sales Accepted Leads (SALs)
Track in CRM
Sales Cycle-Time
Average sales cycle length
# SQL Not Ready to Purchase
Sent back to marketing
Cross-Selling & Up-Selling Revenue Growth/Decline
SQL to Closed Sales Ratio
Use as basis for optimization
Average Deal Size
MA
RK
ETIN
G S
UC
CESS
METR
ICS
MA
RK
ETIN
G &
SA
LES
ALIG
NM
EN
T M
ETR
ICS
SALE
S SU
CCES
S M
ETRI
CSLI
FECY
CLE
REVE
NU
E M
ETRI
CS
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Lead Lifecycle Analytics DashboardPeriod of Measurement: _____________________
Total # of Inquiries
Track with: web analytics, marketing automation, search analytics, etc.
Total # of Marketing Qualified Leads (MQLs)
Ratio of Inquiry to MQL
Use as basis for optimization
Spend / Channel
# Inquiries / Channel
Automate with technology
Ratio of MQL to SAL
Use as basis for optimization
Cost per SAL
Add Sales overhead to marketing spend
Total # of Sales Qualified Leads (SQLs)
Track in CRM
Cost per Marketing Qualified Lead
Total # of Sales Accepted Leads (SALs)
Track in CRM
Sales Cycle-Time
Average sales cycle length
# SQL Not Ready to Purchase
Sent back to marketing
Cross-Selling & Up-Selling Revenue Growth/Decline
SQL to Closed Sales Ratio
Use as basis for optimization
Average Deal Size
MA
RK
ETIN
G S
UC
CESS
METR
ICS
MA
RK
ETIN
G &
SA
LES
ALIG
NM
EN
T M
ETR
ICS
SALE
S SU
CCES
S M
ETRI
CSLI
FECY
CLE
REVE
NU
E M
ETRI
CS
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• Exactly how many leads do I need to reach 2x sales growth?
Lead Lifecycle Analytics in Action
Assumptions:• Using predictable marketing channels: web, search, email• Average Deal size is known• Average SQL to Close Ratio is known
Period: Quarterly Period: QuarterlyFormula Formula
Inquiries 1000 Inquiries 2544Ratio to MQL 40% Ratio to MQL 40%MQL 400 1000*.40 MQL 1018 2544*.40Ratio to SAL 80% Ratio to SAL 80%SAL 320 320*.80 SAL 814 1018*.80Ratio to SQL 89% Ratio to SQL 89%SQL 285 285*.89 SQL 725 814*.89Ratio 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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• How do I justify more budget?
Lead Lifecycle Analytics in Action
Period: Quarterly Period: QuarterlyFormula Formula
Inquiries 1000 Inquiries 2544Ratio to MQL 40% Ratio to MQL 40%MQL 400 1000*.40 MQL 1018 2544*.40Ratio to SAL 80% Ratio to SAL 80%SAL 320 320*.80 SAL 814 1018*.80Ratio to SQL 89% Ratio to SQL 89%SQL 285 285*.89 SQL 725 814*.89Ratio 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
If Marketing and Sales performance remain consistent then:
Cost per MQL = $345
To reach $2M in Sales, I need $345 x 1018=
$351,210… a 9% increase in my budget!
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• Yes… almost• Check out the stats on Top Performers
Awesome, but does anyone do this?
Marketing Cost per Revenue Dollar
Response rates
Marketing Sourced to Pipeline Ratio
Conversion Rate from Inquiry to MQL
# Marketing Qualified Leads
# Marketing Sourced Leads (Inquiry)
0% 25% 50% 75% 100%
42%
49%
54%
62%
71%
79%
Top PerformersSource: Q4’11 Marketing Automation, n= 378
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Web
Analytics
Stand-Alone E
mail M
arketi
ng Tool
Marketi
ng Automati
on Tool
Microsit
es0%
25%
50%
75%
100% 85%
59%43%
23%
82%96%
24% 16%
Top Performers Everyone Else
How do Top Performers Calculate Metrics
Source: Q4’11 Marketing Automation, n= 378
Currently Using Tool
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Top 3 Critical to Success Factors for Top Performers
(Tactics you can’t succeed without…)
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1) CRM Integration is Key
CRM
EMAIL MARKETING
WEB ANALYTICS
LANDING PAGES
MARKETING AUTOMATION
DIRECT MAIL
FULFILLMENT
DIGITAL SIGNAGE
MOBILE MARKETING
DATA WAREHOUSE
BUSINESS INTELLIGENCE
SOLUTION
*58%
*38% *29%
*46%
*Percentage of Top Performers that integrate technology with CRM
WEB CONTENT MANAGEMENT
DIGITAL SIGNAGE
DIGITAL ASSET MANAGEMENT
Other Channels (Less frequently integrated)
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• 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
2) Standardize Definitions for Measurement
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• 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
3) Let Technology do the Heavy Lifting
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Q&A
Thanks!
Ian MichielsGleanster@InsightFanatic
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Guide to Lead Lifecycle Analytics
Deep Dive: Lead Lifecycle Analytics
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