Sunday, November 30, 2014

What Makes a Lead Really Sales Ready?

One of the most important requirements for an effective B2B demand generation system is a clear understanding of who constitutes a sales-ready lead. Describing what makes a lead sales-ready is the essential starting point for defining the roles and responsibilities of marketing and sales. In an optimized demand generation system, marketing is primarily responsible for acquiring new leads and for nurturing leads until they are sales ready. Once a lead is sales ready, sales assumes the primary responsible for managing that relationship.

The term sales-ready lead is used frequently by marketing thought leaders and practitioners, but it's difficult to find a useful or widely-accepted definition of the concept. Some marketing pundits avoid the need to define sales-ready lead by saying that the term means whatever marketing and sales agree that it means.

In practice, companies vary greatly in terms of when they pass leads from marketing to sales. In a recent blog post, Bob Apollo described research by SiriusDecisions regarding when companies treat leads as being sales ready. According to this research, 28% of companies treat all contacts or inquiries as sales-ready leads and pass them to sales without any qualification. At the other extreme, 10% of companies only pass leads to sales after they are fully BANT-qualified. In between, 25% of companies will pass a lead to sales when the lead has an "appropriate" job title and is affiliated with an "appropriate" type of company.

We need to do better. If we want to optimize the performance of our demand generation system, we need a rational, reasonable, and substantive definition of who constitutes a sales-ready lead. I'll offer one momentarily, but first it's important to understand who is not a sales-ready lead.

To start with, a raw inquiry does not constitute a sales-ready lead. A raw inquiry is someone who has identified himself or herself, but otherwise has shown only a minimal level of interest in what you offer. He or she may have filled out a registration form and downloaded one of your content resources, but that's it.

Sales ready is also not equivalent to ready to buy. As noted earlier, some companies only pass leads to sales when the leads are fully qualified using the traditional BANT criteria. As I pointed out in an earlier post, the problem with BANT is that some of the criteria won't be met until near the end of the buying process, and in addition, it's increasingly unlikely that any one person can ever satisfy all of the BANT requirements.

A sales-ready lead, therefore, falls somewhere between a raw inquiry and a BANT-qualified lead. Here's my proposed definition:

A sales-ready lead is an individual who (a) is affiliated with a qualified prospect, (b) can make or influence the decision to purchase your product or service, and (c) is sufficiently interested in exploring solutions to engage in a meaningful dialog with a salesperson. In this definition, the term qualified prospect means an organization that has a need your company can address and falls within your defined target market.

This definition provides a good starting point, but I also think it's important to have specific criteria for identifying sales-ready leads. The table below includes eleven criteria that I suggest are appropriate for most companies. The first four criteria apply to the prospect organization, and the remaining criteria apply to the individual lead.

That's what I say makes a lead really sales-ready. How about you?

Sunday, November 23, 2014

B2B Marketers Identify the "Best" Lead Generation Techniques

When it comes to evaluating lead generation tactics and channels, most B2B marketers are interested in three basic performance characteristics - the quality, quantity, and cost of leads produced. A recent report by Software Advice provides insights on marketers' perceptions regarding the effectiveness and efficiency of several popular lead generation techniques.

The 2014 B2B Demand Generation Benchmark report is based on a survey of 200 B2B marketing professionals. The survey was designed to elicit input from marketers regarding what channels, offers, content types, and technologies they are using in their demand generation programs and which of those techniques and tools are most effective and efficient. Specifically, the survey asked for marketers' perceptions regarding the productivity of 15 lead generation tactics:

  • Trade shows & events
  • Search engine advertising
  • In-house email marketing
  • Print, radio & TV advertising
  • Referral/advocate marketing
  • Third-party webinars
  • Organic search
  • Social media advertising
  • Third-party lead originators
  • Social media (non-ads)
  • Telemarketing/cold-calling
  • Third-party email marketing
  • Retargeting advertising
  • Direct mail
  • Display advertising
Lead Quantity
The Software Advice survey asked participants to rate each lead generation channel/technique in terms of its effectiveness at producing a large quantity of leads. The rating choices were very high, somewhat high, somewhat low, and very low. The top four channels/tactics for lead quantity (based on the combination of very high and somewhat high ratings) were:
  1. Trade shows & events
  2. In-house email marketing
  3. Referral/advocate marketing
  4. Search engine advertising
Lead Quality
Survey participants were also asked to rate each lead generation technique in terms of the quality of leads produced. The top four channels/tactics for lead quality (based on the combination of excellent and good ratings) were:
  1. Trade shows & events
  2. Referral/advocate marketing
  3. In-house email marketing
  4. Print, radio & TV advertising
Finally, Software Advice asked survey participants to rate each channel or technique in terms of cost. The top four least expensive channels/tactics (based on the combination of very low and somewhat low cost-per-lead ratings) were:
  1. In-house email marketing
  2. Social media (non-ads)
  3. Referral/advocate marketing
  4. Third-party email marketing
For me, the most significant takeaway from the Software Advice report is that B2B marketers continue to say that trade shows and events produce both the most and the best leads. This indicates that marketers still believe strongly in the power and efficacy of in-person interactions with potential buyers.

Sunday, November 16, 2014

Why It's Critical to Solve the Measurement Problem in Content Marketing

In their November 8th podcast, Joe Pulizzi and Robert Rose offered several comments on my recent post - Is There a Crisis of Confidence in Content Marketing? Joe Pulizzi is the founder of the Content Marketing Institute (CMI), and Robert Rose is CMI's Chief Strategy Officer. Under Joe and Robert's leadership, CMI produces great research regarding content marketing, and its annual conference (Content Marketing World) has become a premier content marketing event.

In their podcast, Joe and Robert say that content marketing is not facing a crisis of confidence. They acknowledge that many marketers aren't sure that their content marketing efforts are effective, but they contend that most of the uncertainty exists because content marketing is still a relatively new practice. Joe and Robert also acknowledge that most marketers don't have confidence in their ability to measure the effectiveness of content marketing, but they argue that the measurement problem is not unique to content marketing.

I agree with Joe and Robert that there is no immediate crisis of confidence in content marketing. Research by CMI and others shows that most companies are increasing their commitment to content marketing, which indicates that most marketers believe that content marketing is effective and valuable. Moreover, some companies have been able to quantify the value of content marketing. For example, at the recent Content Marketing World conference, Julie Fleischer, the director of data, content, and media at Kraft Foods, said that Kraft now generates a four-times-better return on investment through content marketing than through advertising.

In general, however, marketers aren't confident in their ability to measure the business impact and value of content marketing. In a 2014 survey by Contently, only 9.4% of marketers said they are very confident in their ability to measure the business results of content marketing. During the podcast, Joe Pulizzi said that according to CMI research, about 20% of marketers say they can measure the effectiveness of content marketing.

Whether the right number is 9.4% or 20% or somewhere in between, the measurement problem is a significant issue even if it doesn't create an immediate crisis of confidence. As companies spend more and more on content marketing, CEO's and other senior business leaders will begin to demand more convincing evidence that their investments are producing measurable financial results. So, if we want to solidify and sustain the support for content marketing, we need to develop a credible approach for measuring its impact on strategic business objectives such as growing revenues, market share, and profits.

The good news is that the measurement challenge is receiving a considerable amount of attention, and there is an emerging body of knowledge about how to measure the performance of content marketing. For example:

The measurement frameworks offered by Jay Baer, Curata, and Contently all contain many good ideas, and I agree with some of the specific metrics they suggest. However, I contend that most companies should not focus their measurement framework on content marketing per se. In an upcoming post, I'll explain why.

Sunday, November 9, 2014

Should Marketing or Sales Take the Lead in Lead Generation?

Today, there are two distinct, and seemingly contradictory, paradigms of B2B demand generation. Both paradigms are essentially responses to profound changes in the B2B marketing and sales environment, the most significant of which has been the emergence of empowered buyers. Business buyers now have easy access to a wealth of information, and they are using that information to perform research on their own. As a result, they are much less dependent on sellers than in the past.

One approach to dealing with empowered buyers is to expand the role of marketing in lead acquisition and lead nurturing. Proponents of this approach rely on research which indicates that today's business buyers are educating themselves and delaying conversations with sales reps until later in the buying process. For example, SiriusDecisions says that business buyers are now performing 67% of their buying process online. CEB and Forrester Research go even further and say, respectively, that B2B buyers are 57% or 67% through the buying process before they engage salespeople.

The marketing-centric paradigm accepts that most potential buyers prefer to learn about business issues and possible solutions on their own, especially in the early stages of the buying process. Advocates of the marketing-centric paradigm say that instead of fighting this preference, companies should use content resources and marketing automation technologies to support the "self-directed buyer" as he or she goes through the learning process.

The second paradigm of B2B demand generation focuses on sales methodology and emphasizes the continued importance of sales reps in the demand generation process. CEB is a major advocate of this paradigm, and what CEB and others argue is that salespeople should engage early-stage buyers and use disruptive insights to change how they are thinking about business issues and challenges. These disruptive insights enable sales reps to shape demand rather than simply react to existing demand. More importantly, disruptive insights provide value that buyers can't easily get anywhere else and thus make it worthwhile for them to interact with sales reps.

Advocates of the sales methodology paradigm argue that the statistics from SiriusDecisions, CEB, and Forrester are averages that mask a wide variation in actual buyer behavior. And there is research to support this argument. For example, in the 2012 How Buyers Consume Information Survey by ITSMA, over 70% of B2B technology buyers said that want to engage with sales reps before they finalize a short list of preferred vendors.

The reality is that B2B demand generation is more varied and complex than it is often portrayed. When you consider all of the available research, it's clear that a large majority of business buyers (probably 80% or more) are performing independent research before they interact with a sales rep. It's also clear, however, that a significant percentage of potential buyers will turn to sales reps early in the buying process. Therefore, the two paradigms of B2B demand generation are, in fact, complementary, not contradictory.

What is also undeniable is that early engagement is vital to demand generation success. Forrester says that solution providers who engage prospects early in the buying process win 74% of the deals, while the win rate for those who engage late in the process is only 26%.

The bottom line is, B2B companies must be ready, willing, and able to engage with prospects on their terms. This means that successful lead generation requires both marketing and sales.

Sunday, November 2, 2014

Why Your Marketing Content Needs Great "Curb Appeal"

If you've ever sold a house, your real estate agent probably talked with you about the importance of curb appeal, and he or she may have suggested that you do some things (prune the landscaping, paint the trim, etc.) to improve your home's curb appeal.

Curb appeal is the visual attractiveness of a house as seen from the street, and it is what creates that all-important first impression of a house in the minds of potential buyers. Real estate professionals know that curb appeal plays a huge role in determining how quickly a house will sell and what price it will bring.

First impressions are also critical in B2B marketing. And today, most of your potential customers will base their first impression of your company on the content you publish and distribute. We now know that business buyers are performing research on their own, and many are delaying conversations with sales reps until later in the buying process. Because potential buyers usually interact with your content before they interact in any other way with your company or your product or service, they form an impression of your company based on the content they consume.

If your content fails to create a good first impression, a potential buyer will quickly look elsewhere, and you may not get another chance to create engagement with that buyer. On the other hand, when your content creates a good first impression - when it has good curb appeal - a potential buyer will likely "come back for more" and be willing to continue his or her engagement with your company. Just as important, when one of your content resources creates a good first impression, a potential buyer is much more inclined to view the rest of your content - and your company - favorably.

That's because of a powerful cognitive bias known as the halo effect. The halo effect can be defined as the transfer of positive (or negative) feelings about one thing to another, without having a rational basis for the transfer. The halo effect can be found in a wide range of human judgments. For example:

  • If I meet a person who is well-spoken and likable, I am likely to believe that the person is also intelligent, generous, and ethical.
  • If I have a good experience with a Honda automobile, I will be inclined to believe that I'll also be happy with a Honda lawnmower.
  • If I read a white paper produced by your company and find the paper to be useful and valuable, I'll be inclined to believe that other content resources produced by your company will also be useful and valuable. Just as important, I'll also be inclined to believe that your company is good at what it does.
The critical thing to remember about the halo effect is that it elevates the importance of first impressions, sometimes to the point that subsequent information is largely ignored.

Daniel Kahneman, a winner of the Nobel Prize in economics, shared a first-hand experience with the halo effect in his best-selling book Thinking, Fast and Slow. Kahneman wrote that when he was a young professor, he graded students' essay exams in the conventional way. He picked up a test booklet and read all that student's essays in immediate succession, grading them as he went. When finished, he would compute the total grade and go on to the next student.

Kahneman eventually noticed that his evaluations of the essays in each booklet were very similar. He began to suspect that his grading exhibited a halo effect and that the first essay he scored had a disproportionate effect on the overall grade. In essence, if Kahneman gave a high score to the first essay, he tended to give that student the benefit of the doubt if the subsequent essays contained flaws.

Kahneman recognized that this created a serious problem. If a student had written two essays - one strong and one weak - Kahneman would end up awarding different final grades, depending on which essay he read first. As Kahenman writes, "I had told the students that the two essays had equal weight, but that was not true:  the first one had a much greater impact on the final grade than the second."

As a B2B marketer, you can benefit from the halo effect if you consistently produce content that creates a great first impression with potential buyers. But the halo effect doesn't really make your job easier, because it's impossible to predict which of your content resources a potential buyer will encounter first. Therefore, all of your content resources need to be capable of producing great first impressions. In other words, all of your content needs to have great curb appeal.