Two Key Promises of Predictive Marketing

As a B2B marketer, imagine how much more effective your marketing efforts would be if you had the following insights:

• What if you could identify businesses that are likely to have a strong interest in your company's products or services before you market to those businesses?
• What if you could reliably identify which of your current prospects have a strong propensity to buy your company's products or services and thus are ready to have a meaningful conversation with one of your sales reps?

These are two of the most significant promises of predictive marketing solutions. During 2015, predictive marketing was one of the hot technologies in B2B marketing, and it appears that the demand for predictive marketing solutions is poised to grow rapidly. 

Last fall, Everstring published the results of a survey of marketers regarding the use of various marketing technologies. Twenty-five percent of the survey respondents said they were currently using some predictive tools, and another 47% said they were aware of predictive marketing and were investigating how to use it. Two studies by Forrester Consulting - available here and here - reported even higher usage rates of predictive marketing analytics among B2B companies.

Predictive marketing solutions have the potential to dramatically improve the productivity of B2B demand generation by enabling companies to target their marketing and sales activities more precisely. Predictive analytics can be used to address a wide range of business issues, but the two uses that are receiving most of the attention in the B2B marketing world are new prospect acquisition and prospect/lead scoring.

Most predictive marketing solutions employ the same basic approach for both of these use cases. They take data regarding your company's existing customers from your CRM and marketing automation systems and combine that information with external data about those customers - from around the web, social media, and other third-party data sources - to construct a customer data model that describes the attributes and behaviors of organizations that are likely to have a strong interest in your company's products or services.

When predictive marketing is used to identify new prospects, the solution provider will run your customer data model against its (the solution provider's) database of businesses. The result is a list of prospects that resemble - to a greater or lesser extent - your existing customers. The inference is that prospects that closely resemble your existing customers  are likely to be interested in your company's products or services. With this insight, you can target your marketing programs more precisely and use your marketing resources where they are more likely to be effective.

When predictive marketing is used for prospect/lead scoring, the solution provider applies your customer data model to the prospects already in your marketing database and generates a score for each prospect based on how closely the prospect resembles your existing customers. This enables you to qualify prospects or leads using much more data than is typically available in traditional lead scoring systems. In theory, therefore, a predictive marketing solution qualifies prospects and leads more accurately, and it can potentially identify buying signals that are almost impossible to find using traditional lead scoring techniques.

The early indications are that predictive marketing solutions will drive significant business benefits. For example, in a 2015 study by Forrester Consulting, 72% of respondents whose companies were using predictive marketing grew revenues by 10% or more during 2014. Only 33% of non-users achieved the same rate of revenue growth.

While its clear that predictive marketing solutions can provide significant benefits in the right circumstances, there are a few caveats that marketers should keep in mind. For example:

• These solutions rely heavily on data from a company's CRM and marketing automation systems to construct the customer data model. So, if your company is a fairly mature user of CRM and marketing automation, and if your systems contain a significant amount of usable data, predictive marketing could be a sound investment. On the other hand, if you don't have enough reliable CRM/marketing automation data to work with, the value of predictive marketing will be more problematic.
• It's also important to recognize that you need a reasonable number of existing customers to create a customer data model that is reliable and predictive. Put simply, your customer data model will be richer and more reliable if it is based on 500 customers rather than on 50 customers.
• Predictive marketing solutions are not outrageously expensive, but they can require a significant investment. The cost of predictive marketing solutions varies greatly depending on the features of the solution and a variety of other factors. Pricing can always change, of course, but at present, it appears that the starting price for most predictive marketing solutions ranges from around $15,000 per year to over $100,000 per year.

Illustration courtesy of Louise McLaren via Flickr CC.

B2B Marketing Developments That Took Center Stage in 2015

As 2015 draws to a close, it's interesting to think about what technologies, practices, or other developments in B2B marketing captured the most attention during this year. The nature of my work requires me to stay on top of trends and new developments in B2B marketing, and therefore I spend a considerable amount of time attending conferences, reading research reports, attending webinars, and performing other types of research.

During 2015, three practices - account-based marketing, predictive lead scoring, and sales enablement - generated a great deal of hype. None of these practices was completely "new" in 2015, but all gained substantial traction among marketers over the past twelve months. Predicting the future is always hazardous, but I think these practices are likely to play significant roles in B2B marketing in 2016..

Account-Based Marketing

The defining characteristic of account-based marketing is that it focuses on a group of identified or named target accounts. More specifically, ABM programs are directed at relevant individuals (decision makers or influencers) who are affiliated with those target prospects. In a recent survey by SiriusDecisions, more than nine out of ten respondents described ABM as "extremely" or "very" important to their overall marketing efforts.

As I have written before, account-based marketing is actually a combination of long-established marketing principles and methods, and new technology-enabled marketing techniques. For example, technology now enables us to target online advertisements and customize website content for individual target accounts. Today's most successful ABM programs also exhibit a high level of integration across marketing, business development, and sales activities. This characteristic has caused some ABM thought leaders to argue that ABM should really be called strategic account development because it encompasses much more than marketing.

Predictive Lead Scoring

Predictive lead scoring is an analytics technique that takes data regarding existing customers from a company's CRM and marketing automation systems, and combines that information with external data to create a profile of organizations that have the greatest propensity to purchase the company's products or services. Then, the scoring software aggregates similar data regarding the prospects in the company's marketing database and compares these prospects to the profile, resulting in a "propensity to buy" score for each prospect.

Predictive lead scoring can enable companies to qualify prospects using much more data than is typically used in traditional lead scoring systems. Therefore, predictive lead scoring qualifies prospects more accurately, and it can identify buying signals that are almost impossible to find using traditional lead scoring techniques.

Sales Enablement

Improving the effectiveness of sales efforts and increasing the productivity of salespeople are not new business objectives, but they have become important priorities for leaders in most types of business organizations. In the 2015 Sales Performance Optimization Survey by CSO Insights, respondents identified increasing sales effectiveness as their second most important objective for 2015, behind only winning new customers. Gartner recently estimated that $297.5 million was spent on digital sales content management systems in 2014.

Sales enablement - in some form - has existed in B2B companies for several years. But over the past five years or so, the interest in sales enablement has increased dramatically, driven largely by the appearance of sales enablement technology solutions. By 2015, the capabilities of sales enablement technologies had become quite sophisticated. Some solutions now have the ability to recommend specific content resources to a sales rep based on data analytics, and most solutions now enable companies to track the usage and effectiveness of their sales content resources.

2015 has been another interesting year in B2B marketing, and I expect more of the same in 2016.

Illustration courtesy of Automotive Social via Flickr CC.

Is Predictive Lead Scoring the Next Big B2B Marketing Technology?

The pace of innovation in marketing technology over the past decade has been nothing short of breathtaking. In the B2B marketing space, one of the hot new technologies is predictive lead scoring. There's no doubt that predictive lead scoring is still in its infancy, but it's beginning to gain some traction in the market. Last fall, SiriusDecisions published a report that provides valuable perspectives on the current state of the predictive lead scoring market. According to SiriusDecisions:

• Fewer than 500 B2B companies are currently using predictive lead scoring. But. . .
• The market is growing rapidly. In 2014, there were nearly 14 times more B2B companies using predictive lead scoring than there were in early 2011.
• 78% of the companies using predictive lead scoring are in the high tech industry.
• Over half (56%) of current users have annual revenues of $50 million or less.
• Nine out of ten current users say that predictive lead scoring provides more value than traditional lead scoring.

How Does It Work?

A predictive lead scoring platform is an analytics application that takes data regarding existing customers from a company's CRM and marketing automation systems, and combines that information with external data (from the web, social media, and other third-party data sources) to create a profile of organizations that have the greatest propensity to purchase the company's products or services. Then the application aggregates similar data regarding the prospects in the company's marketing database and compares those prospects to the profile of the company's existing customers, resulting in a "propensity to buy" score for each prospect.

Benefits of Predictive Lead Scoring

Predictive lead scoring enables companies to qualify leads and prospects using much more data than is typically used in traditional lead scoring systems. Therefore, predictive lead scoring qualifies leads and prospects more accurately, and it can identify buying signals that are almost impossible to find using traditional lead scoring techniques and technologies.

Advocates also argue that predictive lead scoring enables both marketers and salespeople to focus their efforts and resources on the leads and prospects with the greatest potential to buy, and that it can improve the relationship between marketing and sales by providing a more objective, data-driven, and therefore more reliable, way to qualify leads.

Is It Right For You?

Predictive lead scoring technologies are evolving rapidly, and any assessments made today have to be considered tentative at best. Predictive lead scoring solutions appear to offer significant benefits, but marketers should keep a few things in mind.

First, these solutions rely heavily on data from a company's CRM and marketing automation systems to construct the scoring model. So, if your company is a fairly mature user of CRM and marketing automation, and if your systems contain a significant amount of good data, predictive lead scoring could be a sound investment. On the other hand, if you don't have enough good CRM/marketing automation data to work with, the value of predictive lead scoring will be more problematic.

Predictive lead scoring solutions are not outrageously expensive, but they may be out of reach for many small B2B companies. Pricing is always changing, of course, but it appears that the starting price for most predictive lead scoring solutions ranges from around $2,000 to about $6,000 per month.

A Cornucopia of B2B Marketing Predictions for 2015

So far this month, my posts have focused on what will happen in B2B marketing during 2015. In my first January post, I discussed a recent webinar by the Aberdeen Group regarding what best-in-class marketers are planning for this year. In my last post, I described some of the findings of a recent survey by StrongView Systems that asked business leaders about their marketing budget and spending plans for 2015.

While performing research for these posts, I discovered an excellent website developed by Backbone Media. Backbone has collected predictions from nearly two dozen B2B marketing thought leaders, and the website presents these predictions in a very accessible format.

The predictions at the Backbone website cover a wide range of topics. I'll focus on three topics that earned comments from multiple marketing thought leaders.

The Roles of Marketing and Sales

I've written before about the need to forge a tighter integration between marketing and sales, so this is a topic that interests me greatly. Here's a sample of the comments and predictions from the thought leaders.

• David Meerman Scott predicts that there will be a convergence of marketing and sales driven by changes in the way people buy. He argues that most people now begin their buying process by performing research using search engines and social networks. Then he says:  "And that means that it's not about marketing doing one thing and sales doing another because from the buyer's perspective it's all the same."
• Matt Heinz predicts that the sales enable function will become more formalized and robust in 2015, and that it will be managed by the marketing department.
• Perhaps the most provocative prediction comes from Marcus Sheridan, who argues that B2B sales reps will largely become extinct and will be replaced by online content.

Video Marketing/Visual Storytelling

Over the past couple of years, several research studies have documented the power of video content to create engagement with potential buyers. Several thought leaders believe that companies will greatly expand their use of video content in 2015. For example:

• Heidi Cohen  believes that 2015 will be the year of video for two reasons. First, she notes that YouTube is now the second largest search engine and that you need content there if you want to be found by your prospects. And second, she argues that video content is an easy and fairly painless way for companies to get input from their employees and customers.
• Michael Brenner argues that visual storytelling will be critical in 2015 and that leading brands will start to create in-house production studios to develop video content.

Predictive Analytics

Predictive analytics was a hot topic in marketing circles in 2014, and several thought leaders believe it will play a more significant role in B2B marketing in 2015 and beyond. Some examples:

• Craig Rosenberg argues that companies will add predictive analytics in order to gain insights that will make their sales efforts more efficient.
• Matt Heinz contends that companies will begin to leverage predictive analytics to help them put the right marketing content in front of the right prospects at the right time.

Whatever actually happens in 2015, it will be an exciting year in B2B marketing.

What High-Performing Marketers are Planning for 2015

We're now well into the prediction season, and it's easy to find articles, blog posts, and webinars that focus on what will happen in marketing in the coming year. The prognostications range from timid to bold, and while I wouldn't bet my retirement savings on most of them, some of the predictions are realistic and insightful.

Recently, I attended a webinar that featured some useful (if not completely surprising) predictions derived from solid research. The webinar was presented by Maribeth Ross, the Chief Content Officer and a Managing Director with the Aberdeen Group. The topic of the webinar was "What Best-in-Class Marketers are Planning for 2015," and the content of the webinar was based on research conducted during 2014 in Aberdeen's customer-facing practice areas.

In this webinar, Ms. Ross focused on two major issues:

• What were the top challenges facing marketers in 2014?
• What are best-in-class marketers planning to do in 2015 to address these challenges?

According to Aberdeen's research, the top four pressures facing marketers in 2014 were:

• "We're not getting the most out of our marketing automation investment."
• "We know lead management is important, but we're not doing it very well."
• "Our buyers are doing more research on more channels before ever talking to sales."
• My sales team needs different resources due to this new buyer."

To address these pressures, Ms. Ross says that in 2015, best-in-class marketers plan to:

• Improve their use of marketing automation technologies by implementing progressive profiling, testing and optimizing landing pages, aggregating data to create account-level views, and implementing lead routing and lead scoring
• Develop clearly defined lead management processes and improve their ability to track and measure the performance of their lead-to-revenue funnel
• Double down on investing in content so that they can effectively engage potential buyers who are performing research and educating themselves
• Enhance their sales enablement capabilities by improving lead qualification processes (including, specifically, the ability to identify "hot" leads that should be sent immediately to sales), by analyzing the effectiveness of their content resources, and by leveraging technology to make it easier for sales reps to find and access content resources

As noted earlier, these predictions are not particularly surprising. The pressures that Ms. Ross identified have been building for the past few years at least, and leading B2B marketers have been focused on marketing automation, content marketing, and sales enablement for quite some time. It's likely that these issues will remain important for next several years.

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?

Building a Simple and Effective Lead Qualification Framework

The essential starting point for building a tighter alignment and a more productive relationship between marketing and sales is developing a joint framework for qualifying sales leads. Without a common understanding of who constitutes a qualified lead, it's simply impossible to get marketing and sales on the same page.

Marketers and salespeople frequently have differing perspectives about who is a qualified lead. When I'm working with a client on a demand generation project, I interview marketers and salespeople separately, and I ask a simple question:  How would you define who constitutes a legitimate sales lead?

The marketers typically say that a qualified lead is someone who works for a company that is in their target market, has an appropriate job title, and has expressed interest (in some way) in what their company offers. The salespeople, on the other hand, will usually say that a legitimate lead is someone who meets the marketers' criteria and whose propensity (and ability) to buy has been established using criteria such as BANT.

When this kind of disparity exists, is it any wonder that marketing and sales are often at odds?

The solution to this problem, of course, is to involve both marketers and salespeople in the development of a lead qualification framework that both groups will use.

There's certainly no need to start from scratch when you're developing a lead qualification framework. With a few minutes research using Google or another search engine, you can find many examples to use as a guide.

Many B2B companies use the Demand Waterfall(TM) developed by SiriusDecisions as the basis for their lead qualification framework, and SiriusDecisions has also developed a "Lead Spectrum" that defines seven lead qualification levels. I am an admirer of the work that SiriusDecisions produces, and I have referred to their models on several occasions in this blog.

When it comes to lead qualification frameworks, however, I usually recommend that companies start with a simpler model. Then, you can add lead stages or lead qualification levels if you identify specific needs for the additional detail. The objective is to develop a lead qualification framework that contains as much detail (but only as much detail) as you really need.

The "starter" lead framework that I typically use with clients has four lead qualification levels - Inquiry, Profiled Lead, Sales-Ready Lead, and Sales Opportunity.

The conceptual approach underlying this framework is simple. The first significant event in the lead qualification process occurs when someone identifies himself or herself and indicates some initial interest in your company (or, more likely, in a content resource your company has published). This makes the individual an Inquiry.

Your first task is to determine which of your Inquiries fit within your target market. Depending on what information you collected when the individual identified himself or herself, you may be able to perform this task without needing more information from the lead. For example, if you have a company name, a few minutes of research will enable you to determine whether the company fits your target market definition (in terms of size, industry, etc.). On the individual level, you may have collected a job title during the initial identification, but if not, a little research should enable you to obtain that information. If a lead fits within your target market, you then have a Profiled Lead.

For marketing/sales alignment purposes, the most critical lead stage to define is what I call a Sales-Ready Lead. 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 becomes sales ready, sales assumes primary responsibility for managing that relationship. What transforms a Profiled Lead into a Sales-Ready Lead is the level of interest the lead expresses (either explicitly or via behavior) in what your company offers. For a discussion of how I define Sales-Ready Lead, see my earlier post titled What is a "Sales-Ready Lead?"

The final lead stage used in my starter framework is Sales Opportunity. The critical defining characteristic of a Sales Opportunity is that the prospect's buying process has advanced far enough that you can reasonably project when a buy/no-buy decision will be made. In other words,  with a Sales Opportunity, you can forecast (within reasonable parameters) when a prospective deal will close.

A simple lead qualification framework is not that difficult to develop, and it can drive a significant improvement in marketing/sales alignment.

Our Most Popular Posts - 2013 Edition

This will be my last post in 2013, and I want to thank everyone who has spent some of his or her valuable time reading this blog. I hope that you have found the content here to be both thought-provoking and useful.

Thanks to analytics, I can see how many times each blog post has been viewed. I thought this would be an appropriate time to share which posts have been most widely read. This ranking is based on cumulative total reads, and therefore older posts obviously have a built-in advantage.

So, in case you missed any of them, here are our five most popular posts.

Use an Importance-Performance Matrix to Get Marketing and Sales Talking - This post explains how to use an importance-performance matrix to capture the degree of agreement or disagreement between marketing and sales regarding key demand generation activities. An importance-performance matrix won't tell you how to resolve conflicts between marketing and sales, but it will identify the issues you need to address.

Why Content Marketing is the Best Way to Build the Brand - Some respected marketing industry experts have argued that content marketing has made brand marketing or "building the brand" obsolete. This post argues that building the brand is still an essential marketing objective for B2B companies and that content marketing is now the best marketing tactic to use for branding. For another perspective on the importance of brand building, see Why B2B Branding Still Matters.

Why BANT No Longer Works for Qualifying Leads - One of the most widely-used methods for qualifying B2B sales leads is known by the acronym BANT, which stands for Budget-Authority-Need-Timeline. This post argues that BANT is no longer an effective way to qualify sales leads. In a later post - Rethinking the Value of BANT (It's Not as Outdated as Some Suggest) - I revisited this topic and argued that the BANT criteria can still be useful for qualifying leads if they are used at the right times to answer the right questions.

Stop Wasting Your Time on Superficial Personalization - For over two decades, experts have urged marketers to use personalized messages to boost the effectiveness of marketing communications. The most common way to personalize a marketing message is to include specific facts about the recipient in the message - what I call explicit personalization. This post discusses the findings of two research projects which demonstrate that explicit personalization alone has become an anemic tool for improving marketing effectiveness.

It's Time to Integrate Marketing and Sales - Marketing and sales "alignment" has been a hot topic among B2B marketing and sales professionals for some time. This post argues that it may be time to move beyond mere "alignment" and actually integrate the marketing and sales functions. In a later post - Four Key Ingredients in the Marketing/Sales Integration Recipe - I discussed four critical requirements for integrating marketing and sales.

Happy New Year, everyone!

Two Keys to More Effective Marketing in 2014 - Part 1

Two years ago this month, I published a post here titled Five Ways to Improve Your Marketing in 2012. With the end of 2013 now only a month away, I thought it would be a good time to revisit this topic with 2014 in mind. How much of what I wrote in 2011 is still relevant, and what would I change about (or add to) my 2011 post.

In my earlier post, I made five recommendations:

• Develop a marketing strategy
• Shift primary responsibility for lead generation from sales to marketing
• Increase the number of leads you acquire via inbound marketing
• Develop and implement a sound lead management process
• Implement a content marketing strategy

These recommendations are as valid today as they were two years ago, although I believe that the number of B2B companies using some or all of these practices has increased substantially over the past two years.

So, what are the most critical actions that B2B marketers should take in 2014 to boost marketing performance? There are several plausible answers to this question, but I suggest that two actions stand out in importance. In this post, I'll discuss why technology has become all but essential for effective B2B marketing in 2014, and my next post will describe how marketing content must change in 2014.

Why Marketing Technology is Essential

I don't write frequently in this blog about marketing technology for a couple of reasons. First, there are many other good sources of information on that topic. In addition, the hype surrounding marketing technology can easily create the erroneous impression that technology is a "silver bullet" that will automatically improve marketing and sales performance.

It's clear, however, that marketing and technology are deeply entwined and that it's now practically impossible to build and execute effective marketing programs without the use of technology. For example, unless you're working with a very small number of prospects, it's extremely difficult and highly inefficient to run sophisticated lead nurturing programs without the right technology tools.

B2B marketing automation (aka lead management) software enables companies to execute personalized and behavior-driven lead nurturing programs. These technologies also typically enable extensive data collection regarding lead behavior and the use of automated lead scoring systems. B2B marketing automation solutions are typically integrated with CRM solutions, and this combination of technologies can significantly improve the effectiveness and efficiency of both marketing and sales efforts.

The good news is, both marketing automation solutions and CRM solutions are now widely available as hosted solutions, they are relatively easy to use, and they are affordable for most B2B companies. These factors, combined with the pressing need to improve marketing performance, have made B2B marketing automation software extremely popular. David Raab, a widely-respected marketing automation industry analyst, estimates that revenues from the sale of B2B marketing automation software will reach $750 million in 2013, and the market has been growing at about 50% per year for the past several years.

If you don't have the internal skills needed to successfully implement a marketing automation solution, you should consider working with a marketing services firm that can use these technologies to execute marketing programs on your behalf.

Marketing technology is not a panacea, but it will be essential for effective B2B marketing in 2014.

Read Part 2 of the series here.

Rethinking the Value of BANT (It's Not as Outdated as Some Suggest)

Last fall, I published a post here titled Why BANT No Longer Works for Qualifying Leads. In that post, I argued rather strongly that BANT (the acronym for Budget-Authority-Need-Timeframe) is no longer an effective way to qualify sales leads because of changes in how B2B buyers make purchase decisions.

My post was neither the first nor the last discussion of BANT to appear in the blogosphere. Here are a few of the blog articles that have been published this year.

• Why BANT is Bunk for Today's B2B Buyer by Ardath Albee
• Banning BANT:  Redefining Quality Lead Criteria and Handling Moot Objections by Allison Tetreault
• All Real Salespeople Love Sales Leads (but there is a tiny caveat) by James Obermayer
• BANT is Dead - Find the Authority by Mike Damphousse
• Lead Scoring:  Don't BANT On It by Sarah Hums
• BANT Isn't Enough Anymore:  A New Framework for Qualifying Prospects by Pete Caputa

As you can tell from these titles, the weight of opinion in the blogosphere is clearly anti-BANT.

While I stand by what I wrote last fall, I also now believe that my criticisms of BANT were probably too broad and that the BANT criteria are still relevant and useful for evaluating sales leads if they're used at the right times to answer the right questions. In the typical demand generation process, there are three major points at which you need to evaluate the quality of a sales lead.

Qualification of New Leads

The first is when you initially acquire a lead, and the issue is whether the lead should be added to your nurturing program. BANT criteria have little role to play in this decision. At this stage, the only information about the lead that you're likely to have is a name, a company affiliation, and a job title. Company affiliation and job title may allow you to infer something about potential need, financial ability to purchase, and buying authority, but that's it. For this decision, the primary criteria should be that the lead is affiliated with an organization that fits your company's target market and has a job title that indicates a reasonable connection with the products or services you sell.

Identification of Sales-Ready Leads

The next point at which you need to evaluate lead quality is when you are deciding whether a lead is ready to engage with a sales rep. A modified version of BANT should be part of the criteria you use to make this decision. For example:

• Need - A sales-ready lead will have acknowledged the existence of a need that your product or service can address.
• Authority - A sales-ready lead will be a member of the buying group that will make the purchase decision. The lead doesn't need to be the classic "economic buyer" or have sole buying authority, but he or she should be a member of the decision-making group.
• Timeframe - A sales-ready lead will be actively evaluating possible solutions for the recognized need. Your lead may not have a firm schedule for making a purchase decision, but he or she should have acknowledged that addressing the need has become a priority for his or her organization.
• Budget - A lead doesn't need to have an established budget to be considered sales ready. As I wrote in my earlier post, research by DemandGen Report has shown that between 70% and 80% of business buyers evaluate potential solutions, build a business case for immediate adoption, and then obtain spending approval. However, you should be fairly confident that the prospect organization has the financial wherewithal to purchase your product or service.

Identification of Sales Opportunities

The third point at which you need to evaluate lead quality is when you are determining whether you have a legitimate sales opportunity. By sales opportunity, I mean a potential deal that has progressed far enough to be included in your revenue forecast. For this decision, the focus of lead qualification is on the prospect organization rather than on an individual "lead" within the organization, and the BANT criteria are particularly relevant. For example:

• Need - To qualify as a sales opportunity, your sales rep should have confirmed that the prospect has a need that your product or service can address and that all members of the buying group have acknowledged the need.
• Authority - Your sales rep should have identified and established relationships will all members of the buying group. In addition, you sales rep must understand what process will be used to make the buying decision and what role each "buyer" plays in that process.
• Timeframe - To qualify as a sales opportunity, the buying process must have progressed to the point that the prospect is committed to making a purchase decision within a defined period of time.
• Budget - While it is not essential to have a specific budget line item for the proposed purchase, your sales rep should have confirmed that the prospect's buying group has access to sufficient funds to make the purchase and the ability to commit those funds when the purchase decision is made.

BANT should never be the only criteria used to qualify sales leads. As noted earlier, BANT is not appropriate for qualifying early-stage leads, and it provides only some of the criteria for identifying when a lead is sales ready. However, BANT is not nearly as useless or outdated as some of us may have thought.

How Lead Development Reps Take Demand Generation to the Next Level

Effective lead management is now an essential component of a high-performing B2B demand generation system. Broadly speaking, lead management refers to demand generation activities that begin when a potential buyer identifies himself or herself to your company and expresses some interest in what you offer.

The two most important components of lead management are lead nurturing and lead qualification. Lead nurturing is designed to build relationships with prospects who are in your target market, but who aren't ready to have a productive sales conversation. Lead qualification refers to the activities and criteria you use to determine where a prospect is in his or her buying process.

Lead management is the weak link in the demand generation chain for many companies. One reason is that it hasn't typically been viewed as a top priority by either sales or marketing. In the conventional view, marketing's primary role is to acquire new leads, and the top priority of sales is to close short-term sales opportunities.

B2B marketing software provides powerful capabilities for automating content-based lead nurturing and some aspects of lead qualification. However, it is also becoming apparent that automated lead nurturing and lead scoring will not, in themselves, enable a company to optimize demand generation. A growing number of companies have recognized that person-to-person communication and human judgment are needed to produce maximum demand generation results.

This recognition is causing a growing number of companies to establish a lead management function that is responsible for coordinating lead management activities. The people who perform this function can have a variety of job titles. Some companies call them telemarketers or inside sales representatives, and others call them business development representatives.

I prefer to call these individuals lead development representatives because this title more accurately describes their actual function. The primary responsibilities of lead development representatives, or LDRs, are to orchestrate lead nurturing communications with specified leads and simultaneously qualify those prospects.

More specifically, LDRs will perform the following major activities:

• Make contact with leads who have indicated a defined level of interest. This would include both inbound leads and leads acquired via outbound lead generation programs.
• Ask the lead appropriate questions to determine his or her level of interest and place in the buying cycle.
• Place each lead in the appropriate lead nurturing track so that nurturing communications will be most effective.
• Document interactions with the lead in the company's CRM system.
• Identify leads who are ready to have a productive conversation with a salesperson and arrange an appointment.

The capabilities offered by B2B marketing software play a critical role in today's demand generation, but those capabilities need to be supplemented with person-to-person communications to achieve optimum results. Lead development representatives can take your demand generation to the next level.

How to Avoid Marketing Automation Failure

I don't write frequently here about B2B marketing automation, primarily because there's a wealth of information already available on the subject. The marketing automation vendors (Eloqua, Marketo, Pardot, and several others) do a great job of providing resources that discuss the capabilities, use, and benefits of B2B marketing automation technologies. Understandably, these firms don't put quite the same emphasis on describing the challenges that B2B marketers must address to maximize the benefits of these powerful technologies.

Learning how other companies have leveraged marketing automation technology to improve business performance is useful, but it can be equally valuable to learn why some companies were not successful with marketing automation. Thanks to Joby Blume with BrightCarbon, we have some valuable insights regarding what can go wrong.

Last year, Mr. Blume published a remarkable blog post that described why a previous employer failed with marketing automation. This post triggered a huge number of comments, and the "discussion" continued for about six months. If you're considering an investment in marketing automation technology, this material should be required reading.

Mr. Blume described a dozen reasons for the marketing automation failure. His former employer was a small company - 40 employees/less than $5 million in annual revenues - so some of these reasons are particularly applicable to small firms. However, companies of all sizes can learn important lessons from Mr. Blume's experience.

Here are some of the major reasons cited by Mr. Blume, along with a few comments by me.

Lack of clear objectives - Blume's company wanted to track and identify website visitors and know where inbound leads had come from. Beyond this, however, the company didn't have clear goals for marketing automation.

Lack of marketing processes - Mr. Blume said that his company lacked a clearly defined set of marketing processes. My take:  Marketing automation will make well-designed processes more efficient and enable processes that would be impossible to perform manually. However, even the most powerful marketing automation technologies cannot overcome poorly-designed or non-existent processes. In fact, marketing automation will probably make any flaws in your marketing system more glaring and more painful. Therefore, before you invest in a marketing automation solution, you need to make sure that your underlying marketing and lead management processes are sound.

Lack of leads - Mr. Blume indicated that his company's biggest demand generation problem was not having enough leads and that marketing automation didn't solve that problem. My take:  The real strength of most B2B marketing automation solutions is lead management (nurturing, scoring, etc.). If your company needs to generate a higher volume of leads, your first priority should be to boost your lead acquisition marketing efforts, and most B2B marketing automation solutions play a very limited role in lead acquisition.

Lack of content - Mr. Blume acknowledged that his company did not have (and was not able to create) enough of the kind of marketing content that is required to generate leads effectively. My take:  Content is the fuel for the marketing automation engine, and marketing automation "burns" a lot of content. If you don't keep the fuel topped off, your marketing automation system will stop functioning effectively. Therefore, I usually recommend that companies plan and create all of the content resources they will need for about three months before launching the marketing automation system.

B2B marketing automation is powerful technology, and it's becoming more and more essential for marketing success. As with many other technologies, however, the hard part is not learning how to use marketing automation software. The more difficult challenge is doing the other work that's required to enable marketing automation to perform up to its potential.

Why BANT No Longer Works for Qualifying Leads

One of the most widely-used methods for qualifying B2B sales leads is known by the acronym BANT, which stands for Budget - Authority - Need - Timeline. The basic idea is that you will  have a strong sales opportunity if you identify a lead who:

• Has a recognized need that your company can address
• Has the authority to make the buying decision
• Has the budget to purchase the kind of product or service you provide
• Has an identified timeline for purchasing the kind of product or service you provide

At first glance, BANT appears to offer an entirely reasonable way to qualify sales leads. It's hard to argue that a lead who meets these four requirements would not be highly qualified.

In reality, however, BANT is no longer an effective way to qualify sales leads for two reasons.

• Some of the criteria are all but impossible for an individual "lead" to meet. So, a strict use of the BANT criteria will cause you to ignore many valuable leads.
• By the time a lead is fully "BANT-qualified," it's probably too late. Your odds of concluding a sale on your terms are greatly diminished because a competitor has probably established a favored position.

To understand why BANT no longer works well, let's look at each of the criteria.

Budget
B2B companies no longer budget for many purchases in advance. Surveys by DemandGen Report indicate that only 20% - 30% of purchases are budgeted at the beginning of the year. Between 70% and 80% of survey respondents say they evaluate potential solutions, build a business case for immediate adoption, and then obtain spending approval. Therefore, if you require qualified leads to have established budgets, you will obviously miss out on many sales opportunities. Instead of requiring a specific budget, what you have to do is make a judgment call about whether a prospect has the financial ability to purchase your product or service.

Authority
In the 2012 Sales Performance Optimization survey by CSO Insights, 76% of respondents indicated that 3 or more individuals are involved in making the final buying decision. Purchasing by committee is now the norm. In this environment, most of the leads you encounter won't have full purchasing authority, but many of these leads will play a major role in the final buying decision. The right criteria for lead qualification is influence or involvement, not authority.

Need
Of the four BANT criteria, need is still obviously essential. In most cases, if there's no need, there won't be a sale. Even here, however, the idea of "need" is changing. In the past, the goal was to find a lead who recognized the need and understood it. Now we know that a seller can often have greater influence with a lead who does not fully understand the scope or implications of the need, at least at the beginning of the engagement. This can enable the seller to use marketing content and sales messaging to shape and influence how the lead thinks about the need and possible solutions.

Timeline
The primary problem with using timeline for lead qualification is that by the time a prospect has set a timeline for a significant purchase, the prospect has probably completed most of the buying process. In this sense, timelines have become like budgets. Potential buyers identify needs, evaluate potential solutions, and then get spending approval and set a purchase timeline. In fact, a purchase timeline may not be set until after the supplier has been selected.

For many years, BANT provided a useful framework for qualifying sales leads. Given the new realities of B2B buying, however, BANT no longer works for lead qualification. Today, the BANT criteria develop and evolve as the buying process moves forward. But, you can't expect them to exist at the beginning of a prospect relationship.

Three Things To Do Before Hiring More Sales Reps

When B2B companies need to increase sales, managers will usually consider hiring more sales reps. This thinking is understandable because many B2B companies have long relied almost exclusively on their salespeople to find and win new business. Today, however, simply putting "more feet on the street" isn't likely to produce the volume of new sales that managers are looking for, and even if it does, the cost of those new sales is likely to be unacceptably high.

I've written before about why B2B companies should no longer rely exclusively on salespeople to generate new sales leads. Business buyers have fundamentally changed how they make buying decisions, and these changes require a new approach to B2B demand generation.

So, before you invest in more sales reps, there are three other steps you should take.

Step 1:  Improve Lead Acquisition Marketing

If your marketing programs aren't producing at least 40% - 50% of your qualified sales leads, it's likely that you aren't investing enough in lead acquisition marketing or your marketing programs aren't as effective as they need to be. Marketing must play a larger role in generating new sales leads because in the current environment, business buyers are less receptive to traditional sales prospecting techniques, making such  techniques far less effective and efficient.

For most B2B companies, effective lead acquisition marketing should include a mix of inbound and outbound marketing programs. In both cases, persistence is an important key to success. In today's environment, marketers must assume that multiple contacts will be required to entice a potential buyer to respond.

Step 2:  Implement a Sound Lead Management Process

Research continues to show that most new sales leads are not ready or willing to engage with a salesperson. We also know, however, that most "qualified but not ready to buy" prospects will eventually buy from someone. Once a new lead is acquired (meaning that the prospect has identified himself/herself and indicated some level of interest in your product or service), the big challenge for B2B companies is to build the relationship with the prospect until he or she is ready to make a buying decision.

A lead management process encompasses all of the marketing and sales activities that you use with prospects "from curiosity to close." The objective of a lead management process is to prevent valuable leads from "falling through the cracks" and out of the marketing/sales funnel. While a comprehensive lead management process includes many components, the three core elements are:

• A lead nurturing program that provides prospects relevant, primarily non-promotional information in multiple formats and through multiple channels. The primary objectives of a lead nurturing program are to support prospects throughout the buying process, establish and enhance your credibility, and maintain "mindshare" with prospects until they are ready to have a serious sales conversation.
• A lead qualification system that defines appropriate buying process stages and provides a mechanism for estimating where each prospect is in the buying process.
• A selling process that's designed to identify legitimate sales opportunities and convert those opportunities into closed deals.

Step 3:  Add a Lead Development Representative

Rather than adding more outside sales reps, hire one or more lead development representatives to support your demand generation efforts. Lead development representatives have two primary responsibilities:

• They provide the "human touch" components of your lead nurturing program. In this role, their objective is to use multiple conversations to build rapport with prospects in ways that automated, content-based lead nurturing cannot accomplish.
• They play a major role in the lead qualification process, and they can be primarily responsible for determining when a prospect meets the criteria to be considered a sales-ready lead. When that occurs, the LDR may also be responsible for arranging the first meeting between a prospect and your sales rep.

Lead development reps can perform these functions more efficiently that regular sales reps, and they enable your sales reps to devote more of their time to working with fully qualified prospects who are in the later stages of the buying process.

Hiring more sales reps may be necessary to achieve your growth objectives, but take these three steps first to ensure that you're getting the most out of your existing sales force.

Five Ways to Improve Your Marketing in 2012

Bloggers love lists, and we're told that blog posts with titles like, "Five Secrets to. . ." or "Four Sure-Fire Tactics for. . ." are appealing to readers. Bloggers who write about business also seem to share another characteristic. About now, many feel compelled to make predictions about the new year. When you combine these inclinations, the results are lots of blog posts with titles like, "Six Game-Changing Marketing Trends for 2012,"

I'll leave the prognostications to others, but I will offer a list. I have five recommendations for improving your marketing efforts in 2012.

Before you do anything else, develop a marketing strategy.
You've heard this one before, so I won't repeat all of the reasons that strategy is necessary for success. At its most basic level, marketing strategy is a simple thing for most B2B companies. First, you need to identify all of the significant ways that your product or service can create value for customers and identify the kinds of companies that can obtain the greatest value by purchasing and using your product or service. Second, you need to determine the best ways for communicating your value propositions to potential buyers. This step includes the selection of marketing tactics and channels and the creation of marketing messages. Companies tend to spend most of their time and attention on step two, but step one is even more important. I discussed the "value identification" aspect of marketing strategy in an earlier post titled How to Make Difficult Marketing Questions Easier to Answer.

Shift primary responsibility for lead generation from sales to marketing.
I've explained my rationale for this recommendation in two earlier posts - Stop Depending on Your Salespeople to Generate Leads and Why Marketing Should Take the Lead in Lead Generation. I don't contend that traditional sales prospecting doesn't work at all or that you should completely abandon it. I do contend that traditional sales prospecting is an inefficient use of resources and that you should strive to become less dependent on it.

Increase the number of leads acquired via inbound marketing.
There is little doubt that inbound marketing has become the tactic of choice for lead acquisition. Buyers now control the buying process, and they are performing research and gathering information about products and services on their own, usually via the Web. Therefore, traditional outbound lead acquisition techniques such as direct mail and e-mail don't work as well as they once did. It's just good sense to make yourself easy to find when a prospect begins looking for the kind of solution you provide. Research firm SiriusDecisions says that 80% of new sales leads will come from inbound marketing by 2015. Your objective for 2012 should be to substantially increase the number of leads and the percentage of total leads acquired via inbound marketing.

Develop and implement a sound lead management process.
Consider these facts:  (1) Acquiring new leads is becoming increasingly difficult. (2) 50%-75% of new leads are qualified but not ready to buy. (3) Up to 70% of these lukewarm leads will eventually buy from someone. Put these facts together and one thing is clear - leads are valuable and must be managed with care. An effective lead management process will address several key issues, including lead nurturing, lead scoring, and marketing and sales alignment. A well-designed lead management process will enable you to maximize the sales you obtain from your pool of leads.

Implement a content marketing program.
Having and using the right kind of content is now essential for B2B marketing success. By "the right kind of content," I mean marketing content that is:

• Primarily educational and non-promotional
• Customized for the types of buyers you sell to
• Customized for where the potential buyer is in his or her buying process

I've discussed these requirements in a white paper titled, Two Powerful Ways to Make Your Marketing More Relevant. If you haven't already seen this paper and would like to get a copy, just send an e-mail to ddodd(at)pointbalance(dot)com.

That's my list. Do you have other plans to improve your marketing in 2012?

Automating B2B Marketing

Three forces are shaping today's B2B marketing landscape - the growing power of B2B buyers, the need to make marketing messages and materials relevant to potential buyers, and the recent emergence of technology tools that automate many marketing tasks. I've covered buyer empowerment and the importance of relevant marketing communications in previous posts. This post will focus on marketing automation technologies.

By the way, if you want to dig deeply into the topic of B2B marketing automation, I highly recommend that you read David Raab's Customer Experience Matrix blog. This post will briefly cover the major points.

B2B marketing automation systems - also called demand generation systems - are software tools that are designed to help marketers acquire, nurture, qualify, and distribute leads to sales. Demand generation systems automate four types of B2B marketing tasks.

Lead Generation - All demand generation systems enable users to create and execute lead generation e-mail campaigns. Demand generation systems can also host landing pages and the forms that are used to capture campaign responses, and they can use cookies to track visits to Web pages at a company's main Website in addition to the campaign landing page(s). Support for channels other than e-mail and Web pages is inconsistent. For example, if a lead generation campaign involves direct mail, the direct mail component must usually be managed outside the demand generation system.

Lead Nurturing - Lead nurturing is the process of communicating with prospects on a regular basis until they are ready to buy. For example, a lead nurturing program might involve sending a prospect a particular sequence of e-mails on a specified schedule. Demand generation systems automate the execution of lead nurturing programs. Automated lead nurturing is probably the most important feature of demand generation systems because nurturing programs are difficult to implement without automation.

Lead Scoring - Lead scoring is a method of qualifying prospects by assigning numerical "points" based on information provided by the prospect and on the prospect's behavior (e-mails opened, white papers downloaded, Webinars attended, etc.). All demand generation systems allow users to define scoring criteria and assign scoring values to those criteria.

Lead Distribution - When a prospect's lead score reaches a pre-determined value, the lead is deemed to be sales ready, and the demand generation system passes the lead to sales. Other events can also be used to trigger a hand-off to sales. Demand generation systems are usually configured to distribute leads to sales automatically when these triggering events occur. Most, if not all, demand generation systems offer integration with salesforce.com, and some vendors offer integration with other sales automation and CRM products. This integration makes distributing leads virtually seamless.

Forrester Research has estimated that only 2 to 5 percent of B2B companies have implemented demand generation systems. My take is that this market is on the cusp of a huge growth spurt. I believe this growth will occur for three reasons. First, demand generation systems exist for virtually all sizes of B2B companies. Monthly costs start as low as $200. Second, all of the major demand generation systems are sold as a hosted solution, which means that companies don't need extensive IT resources to implement and use them. And finally, there is a growing body of evidence from early adopters that demand generation systems can significantly improve marketing and sales performance.

If you are a corporate marketer and you haven't already invested in a demand generation system, you should start looking at these technologies now. If you are a marketing services firm, you need to be thinking about how you can help your clients leverage the capabilities of demand generation technologies.