Wednesday, June 29, 2011

Why Marketing Should Take the Lead in Lead Generation

In my last post, I argued that companies should not rely primarily on salespeople to generate sales leads, but instead should use marketing programs to produce most new leads.  Here's why.

The new customer acquisition process for a B2B company includes three distinct components - lead acquisition, lead management, and sales opportunity management.

Lead acquisition includes all of the activities that a company uses to persuade a potential buyer to engage with the company.  The initial engagement can take several forms including meeting with a salesperson, responding to a lead generation campaign, and downloading a content resource (an article or a white paper, for example) from your website.

Lead management refers to the activities that a company performs to qualify leads and nurture those leads until they become legitimate sales opportunities.

Sales opportunity management includes the activities that we typically associate with selling - performing needs analysis, giving demos and/or presentations, preparing proposals and ROI estimates, and closing sales.

When most people use the term lead generation, they are referring to both lead acquisition and lead management.

Two economic factors explain why marketing programs (as opposed to traditional sales prospecting) should be the primary tool for generating leads.  First, lead generation (particularly lead acquisition) is an inherently inefficient process.  It has a high input (work required) to output (success) ratio.  Lead generation is like hitting in baseball.  If a major league player finishes a season with a .400 average, he is likely to win the batting title.  But, a .400 average means the player "failed" 60% of the time.

Because lead generation is inherently inefficient, it's important to perform the process using low cost resources.  Salespeople are expensive resources, and their prospecting activities don't "scale" because they are labor intensive and mostly manual.  Marketing programs, on the other hand, scale very easily, and many marketing activities can be automated on a cost-effective basis.  The bottom line is that leads generated by effective marketing programs are usually less expensive on a cost-per-lead basis than leads generated by salesperson prospecting.

The second economic factor relates to sale productivity.  Reducing the amount of time that a salesperson must spend generating leads means that he or she will have the ability to manage a larger number of legitimate sales opportunities.  This allows the salesperson to close more deals and generate higher revenues for the company.

I am not suggesting that salespeople should not be involved at all in lead generation.  I am suggesting that salespeople should focus on what I call opportunistic lead generation.  For example, they should be asking for referrals, and they should be actively networking with potential buyers.  Salespeople also need to be involved in lead qualification because thorough lead qualification requires human interaction and human judgement.

Marketing programs are not free, but when effective marketing programs are used for lead generation, the payoff can be higher revenues and/or lower marketing and sales expenses (as a percentage of revenues).

Tuesday, June 21, 2011

Stop Depending on Your Salespeople to Generate Leads

For B2B companies that sell complex products or services, keeping the sales pipeline filled with qualified leads is vital.  Many companies have traditionally relied on salespeople to generate their own leads.  In fact, many companies expect their salespeople to perform most, if not all, of the jobs required to find and win new customers, from identifying prospects, to generating leads, to closing sales.

The problem is that this traditional approach to lead generation no longer works as well as it once did.  Business buyers don't need salespeople as much today as they did in the past.  They can go online and find most of the information they need to learn about and evaluate products and services.  So, buyers are now performing research independently, and they are avoiding conversations with sales reps until much later in the buying process.  As a result, it's become a lot harder for salespeople to create the initial engagement with potential buyers, which is what lead generation is all about.

Making salespeople responsible for lead generation is a bad idea for several related reasons.
  • Salespeople must devote a significant amount of their time and energy to lead generation work in order to produce a sufficient number of leads.  According to the 2011 Sales Performance Optimization survey conducted by CSO Insights, salespeople are now spending 24% of their time generating leads and researching accounts.
  • The more time a sales rep spends on lead generation, the less time he/she has for actual selling.  The CSO Insights survey shows that salespeople are spending only 41% of their time on actual selling activities.
  • The less time a salesperson spends on actual selling, the less revenues he/she will produce.  CSO Insights says that only 59% of sales reps made their quotas in 2010.
When the "revenue per salesperson" number goes down, overall company revenues are likely to deteriorate.  Companies must either accept lower revenues of compensate in some way.  The traditional responses have been to browbeat the salespeople to work harder, provide sales reps with training to improve their skills, or hire more salespeople.

The first two responses usually don't work because the real problem is not unproductive salespeople (although some probably are), but an ineffective and inefficient lead generation process.  The third response (hiring more salespeople) may produce higher revenues, but it will also significantly increase your selling expenses.

The real solution is to use effective marketing programs to generate leads and use your sales reps to do the things that only they can do - have meaningful, personal, one-on-one conversations with prospects who are truly sales ready.

Companies are now recognizing that marketing should take the lead in lead generation, but it's also clear that this is still a work in progress.  In the CSO Insights survey, respondents indicated that 47% of sales leads are still generated by salespeople, while only 29% are produced by marketing.

Over the past few months, I've worked with several companies that get more than 80% of their new sales leads from salespeople and only 20% from marketing and other sources (referrals, press coverage, etc.).  These percentages need to be reversed.  Your objective should be to generate 80% of your sales leads from your marketing programs.

If you currently depend on your salespeople for most of your leads, this transition can't be made overnight.  The important thing is to set ambitious but attainable goals for marketing generated leads, and then put the marketing programs in place that will enable you to reach those goals.

Thursday, June 16, 2011

Seven Tips for Writing Case Studies that Sell

Customer case studies are one of the most popular kinds of marketing collateral used by B2B companies.  When they're done right, case studies can help shorten sales cycles and close more deals.

According to recent research by Eccolo Media, case studies are the third most widely consumed type of marketing collateral (behind product brochures and white papers) and the second most influential type of marketing collateral (trailing only white papers).

The good news is that case studies can significantly boost the effectiveness of your marketing efforts.  The not-so-good news is that the use of case studies has exploded, and this means that your case studies are facing more competition for attention and mindshare than ever before.  If they look and sound like all the others your potential buyers see, or if they don't tell a compelling story, they simply won't produce the expected results.

There are seven essential steps for writing effective and compelling case studies.
  • Collect and organize the facts you have to work with
  • Define the target audience
  • Identify the key takeaways
  • Make the case study a true "story"
  • Describe results/benefits in specific (preferably, quantitative) terms
  • Use customer quotations liberally
  • Make the case study easy to scan
We've created a "mini guide" for writing effective case studies that discusses these seven steps in greater detail.  These steps reflect current best practices, and we use all of these techniques when we prepare custom case studies for clients.

If you'd like to review Seven Tips for Writing Customer Case Studies that Sell, send an e-mail to ddodd(at)pointbalance(dot)com.

Monday, June 13, 2011

How to Eliminate Obsolescence from the Marketing Supply Chain

The obsolescence of marketing materials constitutes a major problem for many companies.  The Chief Marketing Officer (CMO) Council has said that obsolescence creates an "epidemic of waste" that undermines the development of an efficient marketing supply chain.  In a recent CMO Council survey:
  • 60% of respondents said they spend at least 20% of their total marketing budget on marketing "consumables" (primarily printed materials such as marketing collateral documents, promotional items, and point-of-sale materials).
  • 40% of respondents said they waste 20% or more of their marketing materials because of obsolescence.
Source:  Understanding the Critical Factors to Achieving Marketing Supply Chain Operational Effectiveness & Optimization (CMO Council, 2010).

Obsolete marketing materials represent a complete waste of marketing dollars.  The cost of obsolete materials is essentially an investment in marketing communications that never reach the intended audience.  A closet or storeroom or trash container filled with obsolete marketing materials is a tangible manifestation of budget funds that could have been used to support productive marketing programs.

Just as important, the use of obsolete marketing materials can adversely affect marketing effectiveness.  In the CMO Council survey cited above, 51% of respondents admitted that they had sent materials to customers or prospects that contained outdated information.  In today's business environment, every interaction with a potential buyer is important, and sales can easily be lost if prospects are provided outdated information.

A marketing asset management solution can dramatically reduce the waste created by marketing materials that become obsolete before they can be used.  These solutions consist of a suite of technologies, manufacturing capabilities, and services that automate many of the processes relating to the procurement, production, management, and distribution of marketing materials.  They reduce obsolescence by eliminating the need to purchase marketing materials in large quantities.

Marketing asset management solutions make extensive of on-demand production technologies, and these technologies enable you to acquire most marketing materials in small quantities on a cost effective basis.  And because production lead times are short, you can order materials as and when they are needed.  This eliminates the need for large inventories, which greatly reduces the possibility that marketing materials will become obsolete.

If you struggle with obsolescence, a marketing asset management solution may be just the "cure" you need for this epidemic.  To learn more about how marketing asset management solutions work, take a look at our white paper titled, Is a Marketing Asset Management Solution Right for My Company? To get a copy of this white paper, just send an e-mail request to ddodd(at)pointbalance(dot)com.

Wednesday, June 8, 2011

Making Localized Marketing Easy and Affordable

In my last post, I briefly described how marketing asset management solutions work.  These solutions automate many of the processes relating to the procurement, production, management, and distribution of marketing materials such as marketing collateral documents, promotional items, and point-of-sale materials.

Marketing asset management solutions can dramatically reduce the indirect costs associated with marketing materials, but they can provide many other benefits as well.  One of these benefits is to make localized marketing easy and affordable.

Marketers have long recognized that customizing marketing materials for specific audiences will increase relevancy and improve the effectiveness of those materials.  One proven application of this tactic is known as localized marketing.  Localized marketing is just what it sounds like - the practice of customizing marketing materials for local audiences.  In can be as simple as adding local contact information to otherwise standard marketing collateral materials or as complex as creating an entire promotional program (direct mailers, print ads, point-of-sale materials, etc.) that is customized for a specific geographic market or buyer segment.

Unfortunately, localized marketing has traditionally been cumbersome, time-consuming, and costly.  Marketers who wanted to reap the benefits of localized marketing were usually forced to make an unattractive trade-off between keeping control of the brand and excessive costs.

Marketing asset management solutions can eliminate the barriers to localized marketing.  By using customizable templates for marketing materials, MAM solutions enable corporate marketers to retain control of brand messaging and brand presentation, while simultaneously enabling front-line marketers (salespeople, local store/branch managers, dealers, franchisees, etc.) to customize marketing materials to fit their marketing needs.

Would a marketing asset management solution make sense for your company?  To find out, read our white paper titled, Is a Marketing Asset Management Solution Right for My Company?  Request your copy by sending an e-mail to ddodd(at)pointbalance(dot)com.