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A DemandGen Report custom white paper for The Annuitas Group
Citation preview
Avoiding The “Silver Bullet Syndrome”of Marketing Automation Software Five Key Areas Every Company Should Address First to Insure Success
Although current adoption rates are less than 10%, mar-
keting automation technology is on the cusp of explosive
growth. Leading analyst firm SiriusDecisions predicts that
50% of BtoB marketers will adopt marketing automation
systems by 2015.
As the category stands poised for dramatic expansion
in the coming years, analysts also caution the next wave
of adopters to avoid the mistakes of companies who
rolled out other enterprise software platforms such as
Customer Relationship Management (CRM), Enterprise
Resource Planning (ERP) and Warehouse Management
Systems (WMS).
Unfortunately, many of the companies that deployed these
systems bought into the “silver bullet syndrome” believing
that technology would magically eliminate their problems.
Take, for instance, adopters of CRM systems. The promise
of shorter sales cycles, more accurate forecasts and higher
close rates was extremely appealing. However, the reality
was that at the end of a lengthy deployment, they were
still left with many of the same sales problems they had
prior to implementation.
Illustrating this point, the 2009 Sales Performance report
from CSO Insights found that the number of firms who
have formally implemented a CRM system had increased
from 53% in 2003 to 71% in 2009. However, the report
also found that almost one in four of the firms surveyed
had internal adoption rates of 50% or less for the systems.
Why do so many companies fall into this trap of invest-
ing in software and then struggle to successfully use the
tools and apply the data? While not intentional, it’s often
assumed that technology is the magic cure for solving
issues whether it’s marketing, sales or inventory. Promises
such as greater efficiency, economy of scale and increased
productivity are so compelling they cause companies to
fast forward past the critical phase of auditing the real
problems in their business processes.
Presented By
Sponsored by
2 • A DemandGen Repor t
This “silver bullet” pipe dream often causes companies to
overlook the underlying problems within their organiza-
tion — the lack of process behind the technology. For early
adopters of marketing automation technology, addressing
their marketing and sales process will be critical to ensure
success and avoid the pitfalls that other technology adopters
have historically made.
The Demands Of The New BuyerThe need for pairing lead management process with mar-
keting automation has become even more pronounced in
the last five years as BtoB buyers have dramatically changed
their buying behaviors. Where sales organizations were
historically able to control the engagement process with
prospective buyers by keeping a tight hold on customer
lists and competitive pricing data, buyers now have almost
endless access to this information. As a result, “talking to”
the buyer is now not enough. Marketers must transition to
“speaking with” the buyer. In other words, marketers must
manage the “buyer dialogue.”
Armed with this new intelligence, buyers are now dictating
the pace and rules of engagement. For example, a recent
DemandGen Report survey found that only 10% of recent
BtoB buyers were initially engaged through a cold call from
a salesperson. Comparatively, more than 80% indicated that
they either contacted the vendor directly or requested to be
contacted after conducting their own research.
In the Web 2.0 world, buyers now conduct more anony-
mous research, as well as connect with peers and industry
experts for information on the best products, best prices
and best terms for a solution…all before they engage with
the sales person at the vendor. Web 2.0 technologies —
blogs, Twitter, online communities, user reviews — have
made it even easier for buyers to directly access competitive
information on suppliers, as well as openly shared vendor
experiences with peers.
This has caused a fundamental shift in the buying process.
For marketing and sales professionals, this means a transfor-
mation in not only how they communicate to their audi-
ence, but also in how they plan their demand generation
campaigns, and more importantly, how they manage the in-
quiries that come from those campaigns. Utilizing marketing
automation to blast the entire database typically results in
low response rates and risks alienating your own contacts.
Furthermore, routing every “lead” that raises their hand in
response to an offer directly to sales before qualification re-
sults in frustration and wasted time for all involved. Instead,
marketers must develop lead management processes that
allow them to respond to the buyer by providing appropri-
ate content based on where the buyer is in the cycle. Defin-
ing the process for this “buyer dialogue” is imperative, and
must be the first step if successful marketing automation
deployment is going to occur.
“While technology enables lead nurturing to
convert [prospects] to customers at a lower
cost, it is not the complete answer. Those
marketers I’ve talked to who have successfully
implemented automation treated lead
nurturing management as a business-process
initiative, not a technology initiative.”
Richard Fouts, Research Director,
IT Markets and Channels, Gartner
–BtoB Online
3 • A DemandGen Repor t
Putting Process First In another recent survey conducted by DemandGen Report,
more than 50 early adopters of marketing automation indi-
cated any breakdowns with their rollouts were not due to
technology failures, but rather a lack of preparation from a
process standpoint. When asked: “If you were to head up the
rollout of a marketing automation system at another organiza-
tion, what would you do differently?” 79.2% said they would
“better prepare their organization by building proper process-
es and content offers to feed the automation system.”
The recently published report from Aberdeen Group titled
“Lead Lifecycle Management: Building a Pipeline that Never
Leaks,” stressed that companies who take a holistic view of
demand generation and lead management produce sub-
stantially better results than those that put technology first.
In fact, the Aberdeen report found companies classified as
“Best in Class” in lead management were 2 times as likely
as all other organizations to have processes in place to route
prospect and customers to different stages in the buying
cycle or sales cycle.
“Every organization will have a different process for routing
leads within the lead lifecycle approach. Unfortunately, the
research suggests very few organizations actually take the
time to map out the full lead lifecycle process to identify
inefficiencies and best practices within existing processes,”
the Aberdeen report stated.
The development of a lead management process is not just
a marketing exercise. It requires the involvement of sales, as
well as groups like IT, operations and finance. “Any resource
or group that has a part in the demand generation process
(inquiry to close) should ideally be part of the lead manage-
ment journey,” suggests Carlos Hidalgo, President of The
Annuitas Group.
Avoiding BreakdownsSkipping the critical process evaluation phase has caused
many marketing automation rollouts to stall at the starting
gate. In some cases, companies realized that they didn’t
have enough content to feed their new high-powered en-
gine. In others, breakdowns were revealed in the collabora-
SALES FOCUS
Lead-nurturing ProgramsPlug the Leak
Problem ID Exploration Competitive Assessment ROI Justification Vendor Selection
MARKETING FOCUS
Lead information capture, scoring, routing, and monitoring close the gap.
Improving Efficiency Through Process Based Lead Management
tion between marketing and sales on a common definition
of a qualified lead. Still in others, there were issues with
regard to the handling of a lead once it is qualified. The
point is no matter how good the technology, these process
issues will eventually surface and hamper marketing
automation’s effectiveness. Marketing and sales must work
together to fix these process gaps.
Quantifying this disconnect in the revenue generation
process, the Aberdeen “Lead Lifecycle” report found over
80% of BtoB organizations admitted that a lack of synergy
between the sales and marketing functions ultimately leads
to lost revenue opportunities. Two common breakdowns
that have emerged when companies fail to align their
sales and marketing processes and goals include:
A lack of organization of leads/opportunities:
Without common definitions and business rules for the
process of qualifying and routing leads through the
sales funnel, leads that are not immediately ready to
buy are often abandoned. As a result, qualified
but “not-yet-ready-to-buy” prospects often leak
out of the funnel.
Duplication of efforts & records: In companies
where sales and marketing are working in silos, leads
are entered simultaneously into both sales and market-
ing contact databases. This duplication results in data
confusion and reporting redundancy as the same con-
tact is often entered and tracked under multiple records.
In addition, the likelihood of a prospective buyer receiv-
ing repetitive or disjointed messages increases, reducing
open rates and the overall effectiveness of campaigns.
Successful companies who address their lead management
process develop service level agreements (SLAs) for the
definition of a lead, how it becomes a marketing or sales
qualified lead, and then how it will be moved through
the sales cycle after qualification. For example, if a lead is
determined to be qualified but the salesperson learns the
company does not yet have budget in place, there should
be defined processes to hand that lead back to marketing
so the prospect can be entered into a nurturing campaign
until they are ready for sales engagement.
Five Lead Management Areas to Address to Insure Success
As stated by industry analysts and demonstrated by the
case studies of leading companies in financial services, high
tech and other vertical industries, lead management should
be a business-process initiative more than a technology
initiative. In order to make the transformation and realize
the true power of marketing automation, companies must
first address these five areas of their business:
DATABASEMANAGEMENT
LeadManagement
Process
LEAD PLANNING
LEAD QUALITYLEAD MAPPING
MEASUREMENT & BENCHMARKING
5 • A DemandGen Repor t
USA Financial, a leading provider of marketing services for financial advi-
sors, had a problem most marketers would die for – too many leads. The
problem, however, was that even though they were delivering hundreds
of leads every month to sales, they had zero insight into the effective-
ness of the campaigns. After an evaluation of their lead management
process it became clear that the focus needed to turn from quantity to
quality of leads.
The Annuitas Group was brought in to conduct a comprehensive audit
of the company’s existing sales and marketing processes, and to assess
how they could better leverage their recent Silverpop Engage B2B imple-
mentation. Upon completion, The Annuitas Group identified several
opportunities for improving the company’s lead management processes.
One example that became obvious was that the sales team spent a large
amount of time determining whether or not leads were qualified. In ad-
dition, The Annuitas Group also identified that the majority of these
leads were not converting into qualified opportunities, leading to a lack
of confidence and a disconnect between sales and marketing.
“Not only was this overwhelming to our sales reps, but it was very frus-
trating as well,” said Raeanne Thompson, VP of marketing services at
USA Financial. “Our reps were essentially searching for a needle in a
haystack and felt like they were spinning their wheels.”
Overall, The Annuitas Group addressed every area of USA Financial’s
lead management process including database segmentation, lead quali-
fication, lead scoring and lead nurturing.
Specific to lead qualification, The Annuitas Group developed a set of ques-
tions for new prospects and captured the information asked — revenue,
type of advisor and type of insurance being written — to help determine
if a lead was qualified. Only those leads that qualified as sales-ready were
routed directly to the sales team. Those not qualified were either sent to a
nurture campaign or disqualified. This closed loop system enabled sales to
be more efficient and also feed reporting data back to the Engage B2B sys-
tem. For marketing, their credibility with sales increased dramatically and
they were also able to demonstrate the ROI of their marketing programs.
As a result of this process-based approach to lead management, the
volume of qualified leads sent to sales increased by triple digits, the
sales pipeline increased by more than 50%, and sales conversion rates
doubled. In addition, the intelligence gathered from the metrics and
reports is used to optimize future campaigns.
“Sales focuses on closing deals, and marketing zeroes in on delivering
sales the highest-quality leads,” Thompson said. “Because the sales team
appreciates the value of the leads we are now delivering, the relationship
between marketing and sales has become much more collaborative.”
1. Digging into the Data
Database management may not be the most glamorous
part of the revenue generation process, but it is an under-
pinning that has ripple effects across all areas of sales and
marketing. In fact, the database can often be the most
significant area in an internal audit to identify gaps in the
sales & marketing process.
Analysis of both the marketing database and the CRM
system and can reveal weaknesses and inconsistencies with
lead capture. These weaknesses can lead to duplication of
data, or data becoming obsolete. A data hygiene process
should be implemented whereby duplicates are consoli-
dated, old records are removed, and incomplete data is
enhanced with current data. This process should happen
once a year at minimum.
In addition, by digging into the data and analyzing com-
mon traits among customers, profiles should be created to
define the ideal customer and prospect. These profiles will
serve as a basis for refining the demand generation and
lead management process.
2. Lead Planning
Success can’t be measured unless an objective is estab-
lished, yet too many marketing and sales organizations
operate without a lead generation objective for marketing.
Effective lead management starts with marketing under-
standing how many qualified leads need to be sent to sales
so that revenue goals can be obtained. Together, marketing
and sales should identify each step in the inquiry-to-sales
cycle. Then, working backwards from the revenue target,
determine how many leads are needed in each phase of
PROCESS PROOF POINTS: USA FINANCIAL INVESTS IN LEAD QUALIFICATION
6 • A DemandGen Repor t
The recognized leader in contract office furniture, Herman Miller has
built a reputation for innovation and operational excellence. They
maintain a global presence with operations, sales offices, dealers and
customers in more than 110 countries and seven continents. However,
even they were not resistant to the economic downturn and decline in
sales over the past two years. As a result, they were forced to reevalu-
ate their lead management processes.
“The Annuitas Group conducted an audit of our existing systems and
processes, identified gaps and made recommendations on where we
had the opportunity to improve our process,” said Becky Billinghurst,
Senior Manager of Customer Information, Herman Miller. “They were
hands-on in investigating our lead capture process, meeting with mul-
tiple departments including sales, e-marketing, customer care and IT,
and even attending our industry trade shows.”
Following the initial audit, the Annuitas Group helped Herman Miller
build a marketing contact/lead database which was integrated with
the in-house opportunity management system used by the sales team.
“They spent a lot of time understanding what technology we had to
work with and then created a process and flow so that qualified leads
all filtered in to one place. There is no black hole anymore for leads.
We now know exactly what is happening to them and where they wind
up,” Billinghurst said.
The ability to track and measure lead flow has been a big benefit for
Herman Miller. “We now have something to benchmark against,” she
added. “We have the ability to evaluate which events are adding more
value than others. We can analyze wins and losses and the dollars
associated with those prospects, and track those deals back to the
source by establishing a unique ID for each lead.”
Prior to working with The Annuitas Group, Herman Miller had no pros-
pect database outside of its opportunity management system. Bill-
inghurst said the company has quickly grown its marketing database
to more than 14,000 records, which are “legitimate prospects.” Of
those 14,000 plus leads, 2,000 have already been qualified, represent-
ing revenue potential in the seven-figure range. “Our sales force now
receives leads that are better qualified with specific sales data,” Bill-
inghurst said. “We’ve realized significant increases in sales follow-up
on qualified leads, and we’ve increased our ability to rank marketing
activities based on ROI.”
Based on the success of its early work with The Annuitas Group, Bill-
inghurst said the company is now working on Phase II of the project,
including more advanced lead generation and lead nurturing, as well
as the possibility of implementing a marketing automation solution.
PROCESS PROOF POINTS: HERMAN MILLER RE-ENGINEERS LEAD MANAGEMENT
the cycle. For example, 10 sales means we need 25 propos-
als. 25 proposals means we need 50 demos. 50 demos
means we need 100 qualified leads. And so on.
Once this model is put in place, it should be monitored
on a regular (monthly, quarterly, etc.) basis. Over time,
marketing and sales will be able to see where their demand
generation gaps are, and will be able to make adjustments
to fill those gaps.
3. Focusing On Lead Quality vs. Lead Quantity
Many marketers get caught up in the volume of leads
generated rather than focusing on passing qualified op-
portunities to sales that are likely to close. Tony Jaros, VP
of Research at SiriusDecisions, recently categorized the
growing focus on lead nurturing and qualification as “the
second sea change” as the role of marketing continues to
evolve. “We have witnessed the charter of marketing —
and thus its relationship with sales — change twice in a
decade,” Jaros said.
While the first wave of change had marketing expanding
its role in demand creation, Jaros said this has resulted in
an over-emphasis on generating leads at the top of the
waterfall, and not enough work on lead nurturing and lead
acceleration in the later stages of the waterfall. “The over-
hype on the ‘create’ task has devalued the other tasks that
sales and marketing should be working on together.”
7 • A DemandGen Repor t
4. Mapping the Lead Route
Once processes for data, lead planning and lead qualifica-
tion are in place, companies should then start to map out
the internal route a lead will take from initial engagement
through becoming a new customer.
The development of a lead routing process is usually the most
overlooked component in the lead management process.
Determining how a qualified lead will be routed to sales, how
a non-qualified lead will be routed to a nurturing campaign,
and how sales will route not-ready-to-buy leads back to mar-
keting ensures that leads won’t leak out of the funnel.
As with other parts of the lead management process, these
lead routes should be developed by marketing and sales
jointly. As a matter of fact, this area more than any other,
will have a significant impact on how marketing and sales
work together. “Taking the time to understand the impact
of the process and work across all parts of the organization
(marketing to sales; sales to IT, etc.) will greatly enhance
adoption,” said Jay Hidalgo, CEO of The Annuitas Group.
“Conversely, it’s very difficult for one group (marketing for
example) to develop the process in isolation, roll it out to the
rest of the company and expect enthusiastic buy in.”
5. Establishing The Right Measurements/Metrics
Once companies have a process in place for how leads
will move from lead capture to the qualification and
nurturing, they are then able to measure their funnel and
establish benchmarks.
Ideally these metrics will not only evaluate the volume of
leads, but also identify a quantifiable impact on closed
business. By identifying what needs to be measured, how
it will be measured and where it will come from, the guess
work will be taken out of the demand generation process.
By pairing the power of optimized lead management
processes with marketing automation systems, companies
will be able to identify specific campaigns that accelerated
prospects through the buying cycle and resulted in closed
deals. Conversely, they’ll be able to identify which market-
ing activities are not working to increase sales revenue.
But marketing data is only part of the equation. “Companies
need to consider how to tie together all of their metrics across
the organization to produce better business intelligence,” said
Carlos Hidalgo, President of The Annuitas Group. “Market-
ing automation, CRM, customer support and finance systems
all produce their own metrics and reports. What’s lacking is
someone who brings all the metrics together and provides a
full 360-degree view of the customer.”
Conclusion: The Paybacks of Process Marketing automation is clearly a game-changing technol-
ogy and the list of companies that are implementing it to
gain competitive differentiation and advantage is expand-
ing quickly. However, the common ingredient among these
market leaders is that they have tightly-aligned marketing
and sales teams combined with a well-defined lead man-
agement process in place.
Filling the top of the funnel with leads is no longer good
enough to succeed. With the BtoB buyer now controlling
the rules of engagement, companies must have a lead
management process in place which maps to the entire
journey of the buyer.
Once a lead management process is in place, companies
have the ability to measure their marketing campaigns and
use the intelligence from these metrics to define future
programs. The impact to top and bottom line performance
has been dramatic for companies that have addressed
their lead management process and enabled it with mar-
keting automation.
8 • A DemandGen Repor t
The Annuitas Group is a provider of marketing and sales process consulting services
for B2B companies. Their proprietary methodology and audit services help clients
identify the gaps and opportunities within their lead management process. To date,
they have identified over $400 million of potential lost revenue for clients. In 2009,
both founders topped the rankings of the SLMA 50 Most Influential People in Sales
Lead Management. For more information, visit www.annuitasgroup.com.
DemandGen Report is a targeted e-media publication spotlighting the strategies and
solutions that help companies better align their sales and marketing organizations,
and ultimately, drive growth. A key component of our coverage focuses on the
sales and marketing automation tools that enable companies to better measure and
manage their multi-channel demand generation efforts. For more information, visit
www.demandgenreport.com.