Lead Lifecycle Analytics: Essential Metrics for Perpetual Revenue Growth
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Transcript of Lead Lifecycle Analytics: Essential Metrics for Perpetual Revenue Growth
Lead Lifecycle Analytics
Essential Metrics for Perpetual Revenue Growth
Ian Michiels Gleanster @InsightFanatic
Sponsored by:
#AOWEB
About the Research Findings
2
Lead Prioritization
Gleansight (Nov 2011)
Top Performers: Respondents that achieved Top Quartile performance in key KPI’s Everyone Else: Everyone Else TODAY’S STATS
Total survey responses: 432 Qualified survey responses: 321
REVENUE AVG CLICK-THROUGH LEAD-TO-SALES CONVERSION
Marketing Automation Gleansight (Dec 2011)
Growth in:
#AOWEB
Agenda for Today…
3
• Managing by Revenue by the numbers:
– Buying Cycle
– Sales Cycle
– Lead Lifecycle
• Define how to actually measure the sales pipeline?
• Lead Lifecycle Dashboard
• 3 Tactics You Can’t Succeed Without
#AOWEB
“How about we
raise the marketing
budget by 1%.”
“Can we do it?”
4
In a world…
Mr. CEO We need more leads.
Mary, what will it take
to increase sales by 2x year-over-year?
“The Board wants to
raise our sales targets
this year…
I think we need to beef
up our Marketing!”
#AOWEB 5
One woman fights for success…
Mary VP of Marketing
What are my options?
#AOWEB
“I just don’t know…”
6
Option 1: Tell Him Yes, and Hope We Can
Mary VP of Marketing
Marketing Spend + Sales Effort = ?
?
? ?
? #
I’m not sure exactly how effective my marketing spend was last year?
But, we reached our targets.
#AOWEB 7
Option 2: Go Check the Numbers
I’ll check my Lead Lifecycle Analytics Dashboard! It tells me: • Exactly how many leads I need to reach 2x sales growth.
• Exactly what it will cost me to generate those leads.
• Exactly how I can set realistic expectations with sales
about meeting our targets… If we both deliver on our plan.
And I can make a tangible case for why I need a 10% increase in budget and not 2%.
Mary VP of Marketing
#AOWEB
• A basic understanding of key concepts…
• What do Top Performers measure?
• What should you measure?
• What are the best practices for measuring the lead lifecycle?
8
First the Groundwork
#AOWEB
Gleanster Research :
9 out of 10 B2B marketers use “revenue growth” as the primary metric for measuring marketing success.
62% of Top Performers measure MQL to SAL conversion
9
Hope Is Not a Strategy
#AOWEB
What’s MQL and SAL?
…Let’s dive into some key concepts
10
#AOWEB
• Buying Cycle
• Sales Cycle
• Lead Lifecycle
11
Demand Generation Concepts
What’s with all the cycles and circles?
#AOWEB 12
The Birds Eye View of Lead Generation
Leads Prospects Customers
An inquiry into a product, a potential prospect. Expressed interest in solving a problem.
A qualified decision making individual with budget and authority to influence a sale.
A person or organization that has purchased goods or services.
Psst… that’s the Customer Lifecycle
#AOWEB 13
The Birds Eye View of Lead Generation
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
#AOWEB
Attention
• Known Problem?
Interest
• Recognized need
Desire
• Seek solution to need
Action
14
1) Buying Cycle
Goal #1: Become a trusted advisor – DON’T SELL! Goal #2: Relevant communications
Email Website Search
Social Media Video
Mobile
Banner Ads Webinars
Events
PR Advertisements
Direct Mail
Re-Targeting Microsites Affiliations
MARKETING
#AOWEB
• Traditional “funnels” are less useful in the context of sales these days – Prospects are educated beforehand – Sales performance can be predictable
• 71% of Top Performers implement Lead
Scoring to increase sales productivity – Sales enablement is the name of the game:
• Meaningful value added dialogs • Marketing shares responsibility • Minimize sales qualification
• The input and output matter most, not what happens in-between.
15
2) Sales Cycle Engagement
#AOWEB
• Marketing tactics used to acquire new prospects should be applied to existing customers
• You probably have LOADS of info on your customers, use it for micro-targeting
– Earn their loyalty with relevant communications
16
3) Service
#AOWEB
Metrics and Measurements
Revenue Growth
Cost per Lead
# of qualified leads generated
Close rate on marketing-sourced leads
Conversion rate
Marketing-sourced deals as share of pipeline
Response rates
Marketing cost per revenue dollar
Cost per lead
Incremental revenue from marketing efforts
Marketing-sourced revenue
Click-Through Rate
Open Rate
Bounced Emails
17
Lead Lifecycle Management
BUYING CYCLE
SALES CYCLE
CUSTOMER SERVICE
Nurture Opportunities
“Not Ready to Buy”
Cross-Selling and Up-Selling
MA
XIM
IZE
REV
ENU
E
#AOWEB 18
What are the levers that impact revenue?
Hint: There’s more than one.
#AOWEB 19
It’s Not a Handoff… It’s a Team Effort
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
Marketing Sales
Marketing Sales
Marketing Sales
#AOWEB 20
Follow the Revenue
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
Revenue CUSTOMERS
UP-SELLING / CROSS SELLING
Revenue PROSPECTS
DROP OUT OF PIPELINE
Revenue
#AOWEB 21
There is no Golden Metric
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
Revenue CUSTOMERS
UP-SELLING / CROSS SELLING
Revenue PROSPECTS
DROP OUT OF PIPELINE
Revenue
Measu
reme
nt
Measu
reme
nt
Measurement
• Revenue is a byproduct of marketing • Lead Lifecycle Analytics measure the levers that impact revenue
#AOWEB 22
What should you measure?
When the prospect purchases they become a customer , requiring ongoing service and support. Customers can also be nurtured to encourage up-selling and cross-selling.
Marketing Qualified Leads (MQL).
Inquiry. (Unknown buying intent)
Sales Accepted Lead (SAL) = Prospect
Sales Qualified Lead (SQL) = Valid Opportunity
Buying Cycle Sales Cycle Service
Customer Lifecycle
Leads Prospects Customers
#AOWEB 23
Back to Mary
• Exactly how many leads I need to reach 2x sales
growth. • Exactly what it will cost me to generate those
leads.
• Exactly how I can set realistic expectations with sales about meeting our targets… If we both deliver on our plan.
• How do I justify more budget?
Mary VP of Marketing
#AOWEB
15 Critical Metrics
But, don’t be overwhelmed…
24
Lead Lifecycle Metrics
#AOWEB 25
Lead Lifecycle Analytics Dashboard Period of Measurement: _____________________
Total # of Inquiries
Track with: web analytics, marketing automation, search analytics, etc.
Total # of Marketing Qualified Leads (MQLs)
Ratio of Inquiry to MQL Use as basis for optimization
Spend / Channel
# Inquiries / Channel
Automate with technology
Ratio of MQL to SAL Use as basis for optimization
Cost per SAL
Add Sales overhead to marketing spend
Total # of Sales Qualified Leads (SQLs) Track in CRM
Cost per Marketing Qualified Lead
Total # of Sales Accepted Leads (SALs)
Track in CRM
Sales Cycle-Time
Average sales cycle length
# SQL Not Ready to Purchase
Sent back to marketing
Cross-Selling & Up-Selling Revenue Growth/Decline
SQL to Closed Sales Ratio Use as basis for optimization
Average Deal Size
MA
RK
ETI
NG
SU
CC
ESS M
ETR
ICS
MA
RK
ETI
NG
& S
ALE
S A
LIG
NM
EN
T M
ETR
ICS
SALE
S SU
CC
ESS
MET
RIC
S LI
FEC
YCLE
REV
ENU
E M
ETR
ICS
#AOWEB 26
Lead Lifecycle Analytics Dashboard Period of Measurement: _____________________
Total # of Inquiries
Track with: web analytics, marketing automation, search analytics, etc.
Total # of Marketing Qualified Leads (MQLs)
Ratio of Inquiry to MQL Use as basis for optimization
Spend / Channel
# Inquiries / Channel
Automate with technology
Ratio of MQL to SAL Use as basis for optimization
Cost per SAL
Add Sales overhead to marketing spend
Total # of Sales Qualified Leads (SQLs) Track in CRM
Cost per Marketing Qualified Lead
Total # of Sales Accepted Leads (SALs)
Track in CRM
Sales Cycle-Time
Average sales cycle length
# SQL Not Ready to Purchase
Sent back to marketing
Cross-Selling & Up-Selling Revenue Growth/Decline
SQL to Closed Sales Ratio Use as basis for optimization
Average Deal Size
MA
RK
ETI
NG
SU
CC
ESS M
ETR
ICS
MA
RK
ETI
NG
& S
ALE
S A
LIG
NM
EN
T M
ETR
ICS
SALE
S SU
CC
ESS
MET
RIC
S LI
FEC
YCLE
REV
ENU
E M
ETR
ICS
#AOWEB 27
Lead Lifecycle Analytics Dashboard Period of Measurement: _____________________
Total # of Inquiries
Track with: web analytics, marketing automation, search analytics, etc.
Total # of Marketing Qualified Leads (MQLs)
Ratio of Inquiry to MQL Use as basis for optimization
Spend / Channel
# Inquiries / Channel
Automate with technology
Ratio of MQL to SAL Use as basis for optimization
Cost per SAL
Add Sales overhead to marketing spend
Total # of Sales Qualified Leads (SQLs) Track in CRM
Cost per Marketing Qualified Lead
Total # of Sales Accepted Leads (SALs)
Track in CRM
Sales Cycle-Time
Average sales cycle length
# SQL Not Ready to Purchase
Sent back to marketing
Cross-Selling & Up-Selling Revenue Growth/Decline
SQL to Closed Sales Ratio Use as basis for optimization
Average Deal Size
MA
RK
ETI
NG
SU
CC
ESS M
ETR
ICS
MA
RK
ETI
NG
& S
ALE
S A
LIG
NM
EN
T M
ETR
ICS
SALE
S SU
CC
ESS
MET
RIC
S LI
FEC
YCLE
REV
ENU
E M
ETR
ICS
#AOWEB 28
Lead Lifecycle Analytics Dashboard Period of Measurement: _____________________
Total # of Inquiries
Track with: web analytics, marketing automation, search analytics, etc.
Total # of Marketing Qualified Leads (MQLs)
Ratio of Inquiry to MQL Use as basis for optimization
Spend / Channel
# Inquiries / Channel
Automate with technology
Ratio of MQL to SAL Use as basis for optimization
Cost per SAL
Add Sales overhead to marketing spend
Total # of Sales Qualified Leads (SQLs) Track in CRM
Cost per Marketing Qualified Lead
Total # of Sales Accepted Leads (SALs)
Track in CRM
Sales Cycle-Time
Average sales cycle length
# SQL Not Ready to Purchase
Sent back to marketing
Cross-Selling & Up-Selling Revenue Growth/Decline
SQL to Closed Sales Ratio Use as basis for optimization
Average Deal Size
MA
RK
ETI
NG
SU
CC
ESS M
ETR
ICS
MA
RK
ETI
NG
& S
ALE
S A
LIG
NM
EN
T M
ETR
ICS
SALE
S SU
CC
ESS
MET
RIC
S LI
FEC
YCLE
REV
ENU
E M
ETR
ICS
#AOWEB
• Exactly how many leads do I need to reach 2x sales growth?
29
Lead Lifecycle Analytics in Action
Assumptions: • Using predictable marketing channels: web, search, email • Average Deal size is known • Average SQL to Close Ratio is known
Period: Quarterly Period: Quarterly
Formula Formula
Inquiries 1000 Inquiries 2544
Ratio to MQL 40% Ratio to MQL 40%
MQL 400 1000*.40 MQL 1018 2544*.40
Ratio to SAL 80% Ratio to SAL 80%
SAL 320 320*.80 SAL 814 1018*.80
Ratio to SQL 89% Ratio to SQL 89%
SQL 285 285*.89 SQL 725 814*.89
Ratio to Close 12% Ratio to Close 12%
Closed Sales 34 34*.12 Closed Sales 87 87*.12
Average Deal Size $23,000 Average Deal Size $23,000
Expected Sales $786,048 Expected Sales $2,000,000
?
#AOWEB
• How do I justify more budget?
30
Lead Lifecycle Analytics in Action
Period: Quarterly Period: Quarterly
Formula Formula
Inquiries 1000 Inquiries 2544
Ratio to MQL 40% Ratio to MQL 40%
MQL 400 1000*.40 MQL 1018 2544*.40
Ratio to SAL 80% Ratio to SAL 80%
SAL 320 320*.80 SAL 814 1018*.80
Ratio to SQL 89% Ratio to SQL 89%
SQL 285 285*.89 SQL 725 814*.89
Ratio to Close 12% Ratio to Close 12%
Closed Sales 34 34*.12 Closed Sales 87 87*.12
Average Deal Size $23,000 Average Deal Size $23,000
Expected Sales $786,048 Expected Sales $2,000,000
If Marketing and Sales performance remain consistent then:
Cost per MQL = $345 To reach $2M in Sales, I need $345 x 1018= $351,210… a 9% increase in my
budget!
#AOWEB
• Yes… almost
• Check out the stats on Top Performers
31
Awesome, but does anyone do this?
42%
49%
54%
62%
71%
79%
0% 25% 50% 75% 100%
Marketing Cost per Revenue Dollar
Response rates
Marketing Sourced to Pipeline Ratio
Conversion Rate from Inquiry to MQL
# Marketing Qualified Leads
# Marketing Sourced Leads (Inquiry)
Top PerformersSource: Q4’11 Marketing Automation, n= 378
#AOWEB
85%
59%
43%
23%
82%
96%
24% 16%
0%
25%
50%
75%
100%
Web Analytics Stand-Alone EmailMarketing Tool
MarketingAutomation Tool
Microsites
Top Performers Everyone Else
32
How do Top Performers Calculate Metrics
Source: Q4’11 Marketing Automation, n= 378
Currently Using Tool
#AOWEB
Top 3 Critical to Success Factors for Top Performers
(Tactics you can’t succeed without…)
33
#AOWEB 34
1) CRM Integration is Key
CRM
EMAIL MARKETING
WEB ANALYTICS
LANDING PAGES
MARKETING AUTOMATION
DIRECT MAIL
FULFILLMENT
DIGITAL SIGNAGE
MOBILE MARKETING
DATA WAREHOUSE
BUSINESS INTELLIGENCE
SOLUTION
*58%
*38% *29%
*46%
*Percentage of Top Performers that integrate technology with CRM
WEB CONTENT MANAGEMENT
DIGITAL SIGNAGE
DIGITAL ASSET MANAGEMENT
Other Channels (Less frequently integrated)
#AOWEB
• 83% of Top Performers document the definitions for:
– Marketing Qualified Leads
– Sales Accepted Leads
– Sales Qualified Leads
• Lead Scoring with Marketing Automation tools is a form of standardizing definitions
• Be consistent about measurement and calculations
– You can’t benchmark on a moving target
35
2) Standardize Definitions for Measurement
#AOWEB
• Turn to technology for multi-channel measurement
– More channels = more measurement • Email, Website, SEM, Webinar Integration, Social Media Integration
• Keep as much of the measurement in a system as possible
– 2 out of 3 Top Performers adopt standardized out of the box metrics from Marketing Automation
36
3) Let Technology do the Heavy Lifting
Q&A
37
Thanks!
Ian Michiels Gleanster @InsightFanatic
#AOWEB 38
Guide to Lead Lifecycle Analytics
Deep Dive: Lead Lifecycle Analytics
All registered attendees will be getting a complimentary copy via Act-On!
#AOWEB
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