Archive | May, 2012

The Perishable Lead: Why Don’t Good Leads Ever Get Recycled?

31 May

At this point in my career, my marketing teams have generated hundreds of thousands of leads that never received a call. If sales and marketing alignment had been perfect, these leads could have generated billions of dollars of pipeline and many hundreds of millions of dollars in revenue. In addition, these teams have generated more than 100,000 leads that have been followed-up just one time, often with a single email, voice mail, or phone conversation.

For most organizations, recent leads are an incredibly valuable asset that is inevitably underutilized.Why?  The fact is that most B2B organizations do not have sophisticated enough lead scoring and routing processes to recycle great leads that, for one reason or another, never turned into sales opportunities.

So what does it take to effectively recycle leads?

  • A sophisticated scoring process: To effectively recycle leads, companies need to score the lead at least two times. The first score is based on the initial inquiry and the successive score is based on time-based degradation as well as subsequent prospect engagement. Unfortunately, this is very difficult to get right. According to Sirius Decisions, “Best-in-class companies define and execute targeted nurture efforts specific to disqualification reasons, product interests, industry and buyer role. An emerging best practice is to score disqualification reasons and weight responses to nurture-specific offers distinctly from non-nurture actions to recognize progress along a prescribed path designed specifically for reactivating recycled leads.”
  • A multi-pass lead routing process: To effectively recycle leads, you need the ability to present aging leads back to sales for follow-up calls and conversations. To get this right, organizations need to be able to granularly track the initial disposition of the lead and then to re-present the lead to sales at the appropriate time based on prospect activities or time-based follow-up best practices.
  • Strong Lead Generation Analysis Capabilities: In most organizations, sales follow-up capability is limited. Smart organizations are able to dynamically prioritize sales follow-up by balancing the quality of the lead, the level of prospect engagement, and the degradation of the opportunity resulting from the passage of time. According to Sirius Decisions, “Best practice organizations perform deal reviews on recycled leads that progress into active opportunities to determine common attributes. When observable events are identified (e.g. contract expiration with a competitor), marketers can incorporate them into recycle-specific scoring models.”

For many organizations, the first step to lead recycling is to drive second or third contact attempts to recent leads that have never been reached. Beyond that, organizations typically focus on nurture marketing programs to recent leads with the hope of driving prospect re-engagement. As CRM and marketing automation tools continue to improve, smart companies will figure out how to value and prioritize aging leads and to target sales efforts towards the highest value prospects.

 

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HBR: Customer Interactions Don’t Build Brand Loyalty

31 May

Harvard Business Review published a fascinating piece on the myths of customer engagement. The report, based on a study of more than 7,000 consumers, focuses on three common mistakes: assuming that consumers want a brand relationship, assuming that interactions build loyalty, and assuming that customer stickiness is correlated with the quantity of marketing interactions.

The consumer-focused analysis included three powerful observations that will be useful to any marketer:

(1) Consumers and marketers think about brand relationships very differently.  According to the report, “only 23% of the consumers in our study said they have a relationship with a brand. In the typical consumer’s view of the world, relationships are reserved for friends, family and colleagues. That’s why, when you ask the 77% of consumers who don’t have relationships with brands to explain why, you get comments like “It’s just a brand, not a member of my family.” (What consumers really want when they interact with brands online is to get discounts).”

(2) Your purpose, and not your frequency of interaction, will determine brand loyalty. The core insight is that brand relationships are built on shared values. “Of the consumers in our study who said they have a brand relationship, 64% cited shared values as the primary reason. That’s far and away the largest driver. Meanwhile, only 13% cited frequent interactions with the brand as a reason for having a relationship.”

(3) Too many marketers over-market in an attempt to drive engagement. According to the report, “there’s no correlation between interactions with a customer and the likelihood that he or she will be “sticky” (go through with an intended purchase, purchase again, and recommend).” There is, however, a significant risk that over-marketing, especially using email, will result in a negative customer experience.

While these are great rules for consumer marketing, it’s interesting to think about how they might apply to business-to-business relationships. The most important difference is that many B2B relationships (but not all) are built on a personal relationship between a sales person or account manager or support person and the end customer. For these sorts of businesses, the personal relationship is an important part of the brand relationship and the quantity of interactions likely does correlate with customer loyalty. But the other rules likely apply without alteration: purpose and shared-values form the foundation of any brand relationship and all marketers, B2B or B2C, need focus on the quality and not the quantity of interactions if they intend to impact brand loyalty.

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Beware the 4 Unintended Consequences of the “DGR” Sales Role

31 May

With the meteoric growth of electronic B2B demand generation over the last decade, many organizations have restructured their sales organizations to optimize the division of labor.

Now, there is often a dedicated “demand generation representative” (DGR) that calls and qualifies sales leads. They are typically paid a bonus for each qualified lead accepted by sales and sometimes they also receive a percentage of the eventual sale. They are often put in place to provide leverage to the core sales team: they allow the primary sales reps to focus on active opportunities and offload lead qualification to a lower cost dedicated lead follow-up specialist.

Is this a good idea? Sometimes it is — but the additional of a demand generation rep role often creates bigger problems than it solves. Here are the top 4 risks of multi-tier lead follow-up structure:

(1) DGR models are often designed for the benefit of the core sales rep and not for the customer: If you staff this position with lower paid, lower skilled “junior” sales reps, then you risk creating a subpar customer experience. A better approach is to make sure that the best leads receive a call from a  highly skilled expert who can immediately add value to the prospect and who will be likely to answer initial questions.

(2) The addition of a DGR can create inefficient sales handoffs: Sales is a relationship business, and a change in ownership often means a reset in the sales relationship. By definition, multi-tier lead follow-up structures require sales handoffs. With each handoff, you’ll lose good prospects and add time and complexity to the sales process. You’ll also likely ask prospects for the same information multiple times, creating a subpar customer experience.

(3) The best prospects will not go through a multi-stage qualification process: In the rare chance that a senior executive comes in as a lead, you will typically have one chance to get the message right and move the sales cycle forward. If the first call is focused on qualification and doesn’t add enough value to the buyer, the sales process will quickly end.

(4) Multi-tier sales structures are setting-up your sales teams for a battle: It’s inevitable that a demand generation representative will uncover a great lead and pass it to sales only to have sales sit on the lead or screw-up the transition or botch the follow-up. When this happens, the demand generation rep doesn’t get paid. When a core sales person resigns or moves to a different role, the corresponding demand generation representative often loses 6 months of productivity and revenue.

So what is the alternative? One alternative is to rethink lead qualification (try this approach) and to send sales ready leads directly to the core sales teams. With this approach, demand generation representatives would focus on outbound calling campaigns and lower tier leads that still require development. I’ve successfully implemented this approach at companies ranging in size from 50 employees to 100,000+.

How can you design a DGR model that works? The starting point should be the customer experience and not sales opex optimization. If the DGR offers specialized expertise or focuses on prospects that wouldn’t otherwise get a call, then the addition of the role may offer real value to customers.

Rebranding “Fracking”

31 May

Fracking, the process of extracting deep-seated natural gas reserves with a high pressure combination of water, chemicals and sand, is highly unpopular. While the process raises legitimate environmental concerns, it’s especially interesting that Fracking is broadly unpopular with people who do not even know what the word means.

It seems that the word “fracking” is so strong in its sounds and connotations that people assume it must be a terrible thing. It’s a great example of the power of words and sounds to deliver meaning and feeling even without their definition being known.

According to Marketplace on NPR, an LSU survey of 731 Louisiana residents tested the impact of the word “fracking” on perceptions of the practice. Researchers specifically used the word “fracking” in half the surveys. For the other half, they described the drilling process as “a way to extract natural gas that involves using a high-pressure injection of water, sand and chemicals to remove natural gas from rocks deep in the earth’s surface” without using the word “fracking”.

So what happened? According to Marketplace, “When study participants did not hear “fracking” in the question, they were far more likely to feel the process is safe and that the state should encourage drilling.”

So what is the energy industry to do? Given a choice, they would no doubt rebrand the process with a much more friendly and euphemistic name. Maybe “deep energy extraction” or “gentle hydraulic extraction.” Unfortunately for the industry, it’s probably too late to rebrand. Fracking is a quick and easy term that is broadly recognized. Also, it doesn’t hurt media companies that use the term that it grabs attention and seems like a bad thing.

For marketers, it’s another strong lesson that names and words matter. And that even basic sounds can deliver strong connotations and meaning.

Your Media Mix Will Change

30 May

I am amazed at how many advertising agencies still start every presentation with print advertising concepts. According to data presented by Mary Meeker today, print media represents just 7% of media consumption but 25% of advertising spending. Print remains expensive: it’s a surprisingly dominent component of most companies’ media mix.

In comparison, mobile-related media is now more than 10% of media consumption while mobile-related advertisng spending represents less than 1% of investment. Internet media represents 26% of media time but just 22% of media spending. While Internet and mobile adveritsing represent $30B+ in advertising spending, Mary Meeker believes that a rational media mix model that followed eyes to the new media platforms would shift an additional $20B in spending to Internet and mobile.

Why hasn’t this happened yet? I think every agency starts with Print because a big piece of paper is a perfect medium to express an idea, show words and supporting copy, and to highlight the best attributes of a new creative concept. It’s really hard to do all of this in a tiny mobilead. And new media options like promoted tweets or Groupon offers don’t highlight most of the things that an agency likes to do.

Another issue is that mobile marketing techniques haven’t reached the same level of effectiveness as other mechanisms. The same is true of social media marketing techniques. Mobile social media is a particularly deep black hole, and one that has been publically highlighted by Facebook during its IPO process. 

But all of this will rapidly change: mobile and social marketing is a focal point of investment and innovation, and as eyes move to these new platforms, it’s inevitable that marketing dollars will follow.

Mary Meeker: The Mobile Monetization Challenge

30 May

One of the biggest challenges for marketers is that eyes are drifting to mobile devices from traditional content and media channels faster than new marketing techniques are able to impress consumers of mobile applications, content, and media.

Mary Meeker – the famous Internet investment banker turned Kleiner Perkins VC partner – discussed the other end of this equation: “the mismatch between the growth in mobile usage and mobile monetization.”

According to Meeker, there are 1.1 billion mobile 3G subscribers around the world. Mobile data is one of the fastest technology adoption curves in history with 37% y/y growth. Still, there is just 18% worldwide penetration. This compares to 2.3 Billion global internet subscribers – a number which grew just 8% over the last year. And while there are 6.1 billion mobile phone subscriptions around the world, only 953 million of those today are smartphones – again showing lots of potential for growth.

As would be expected, mobile Internet traffic is growing at an amazingly fast pace: increasing 100% year over year to 10% of Internet traffic as of May of 2012.

When it comes to mobile commerce, mobile is just 8% of ecommerce today. The story for mobile advertising is even more dramatic: while 10% of media is now consumed on mobile devices, just 1% of advertising targets mobile platforms. In comparison, print advertising represents 25% of spending but just 7% of media time spent.

The Mobile Advertising Gap

Mary points out that this is an increasingly pressing issue as the media landscape rapidly reshapes itself. In India, for example, total mobile Internet usage has already surpassed desktop internet usage. For marketers, this is a problem: the industry has been much more effective at driving marketing impact through desktop Internet consumption than through mobile channels.

Part of the issue is the speed of the change: it’s hard for marketers to test and ramp new marketing techniques as fast as new platforms grow. Today, AllThingsD summarized Meeker’s argument that “Effective desktop CPMs are five times the price of mobile Internet CPMs in the U.S.: $3.50 versus $0.75. And companies like Pandora, Tencent and Zynga currently report that average revenue per user is as much as five times lower on mobile. Google’s and Facebook’s financials show mobile is constraining revenue growth.”

McKinsey: 2/3 of Companies Betting Heavily on Digital Business to Drive Revenue Growth

30 May

A new study by McKinsey & Company on “Minding your Digital Business” examines the rapid growth in corporate investment on Big Data & Analytics, Digital Marketing & Social Tools, and Flexible Delivery Programs and the sky-high revenue expectations that businesses are attributing to these new digital business strategies.

 The fact that McKinsey completed the study as a “Digital Business” report and not an analysis on analytics, sales, or marketing is a reflection that increasingly every business is a digital business. According to the study, 68% of companies rate “Digital Marketing & Social Tools” as a top corporate priority, 65% rate “Big Data & Analytics” a top investment priority, and 56% says the same for “Flexible Delivery Programs.”

The expected impact of these digital business strategies is sky high: 66% of companies expect a positive impact on operating income over the next 3-years. Of this group, 35% expect an increase of 10% or more.

For companies, data and analytics will likely be the biggest driver of business impact. As digital interactions with customers generate unprecedented reams of data, companies are organizing to turn insights into revenues.

Practically speaking, this is easier said than done. Companies report that organizational structure, IT infrastructure, a lack of quality data, and internal leadership gaps limit their ability to achieve their digital business objectives.

See the full study here.

Lead Qualification: A Dirty Secret

29 May

I talk to many companies that take the same standard approach to lead qualification: they focus on budget, purchase timeline, and decision-making authority as key dimensions of lead qualification.

Typically, these requirements are pushed by sales to make sure that every lead meets their strict qualification criteria. The dirty sectre is that the result, however, is often very different: a constant battle between sales and marketing over whether or not each lead is really qualified. This is no way to run a business.

A more successful approach is to let the lead choose whether or not they want follow-up. Instead of asking a bunch of unwanted qualification questions, ask a prospect whether they would like a personal phone call from someone at the company. I’ve used this technique for years and it works.

Here is what I have found:

  1. Only serious leads want a call from sales
  2. You can ask fewer, more prospect-friendly questions on lead forms which dramatically improves lead form completion rates
  3. Sales & marketing alignment also gets better.  It’s hard to argue that sales shouldn’t call a prospect that is asking to speak with sales.
  4. This definition of a sales ready lead makes it very clear as to which propects are owned by sales and which are owned by marketing. For marketing, the goal then becomes to own and nurture leads that don’t yet want to talk to sales.
  5. Sales will be calling the right people. In most b2b sales environments, the competition has won by the time the project and budget are defined. Qualification schemes that require this for an initial call make it difficult for sales to get ahead of the competition and to influence engaged prospects early in the sales cycle.
  6. Sales is happier because they are only talking to people who want to talk to them.

So, if you are spending too much time arguing over which leads are qualified and which leads are not — think about letting the prospect decide whether or not they want a call from sales.

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Beyond Lead Gen: Marketing-Driven B2B Calling Campaigns

29 May

Before electronic lead generation became the normal mode of operation for B2B companies, sales people dialed for dollars. Even today, the best sales people fill time between leads with outbound calls to the best names that they can find.

In my previous role managing demand generation for a 1,000+ person salesforce, we created parallel programs for lead generation and outbound calling. In any given quarter, the volume of leads was typically limited by the amount of budget allocation to lead generation. Our outbound calling campaigns, however, could cost-effectively reach many more prospects and as a result would generate 3x – 5x the pipeline of our lead generation efforts, albeit at a lower amount of pipeline per call.

Here are a few key best practices for running outbound calling campaigns:

– Keep leads (inbound) and targets (outbound) separate: a cold target is not a lead. Mixing terminology for the two creates confusion and devalues the high priority leads.

– Think of calling campaigns programatically: Start with a theme or play, use business intelligence to target the right lists, customers and prospects, develop talking points, and create marketing materials to support sales.

– Always call leads first: Inbound leads expect a quick response, dont’ keep them waiting. Calling canpaign targets don’t know that you will be calling, so they can always wait until all the leads have been covered.

– Use a tool to track campaign progress: You’ll need software to load targets, queue outbound calls, collect outcomes, and tie calls to pipeline.

– Train your sales teams on every campaign: You’ll want to make sure that your teams understand why the campaign is vbeing developed, what the desired outcome is, and the key things they will need to know tobe successful.

– Get the script or talking points right: The most effective calling campaigns make a crisp and compelling pitch to prospects. test campaigns before launching and quickly kill campaigns that aren’t driving significant conversion.

– Use an offer to drive conversion: A calling campaign is nothing more than an organized series of cold calls on a common theme to a defined set of targets. To improve cold call conversion, provide sales teams with one or more special offers that they can use to lure prospects into a valuable conversation.

– Make calling campaigns part of your holistic nurture efforts: Outbound calling campaigns are a great way to systematically follow-up on old leads and contacts or to nurture customers or prospects in a systematic, measurable way.

While your lead generation budgets will inevitably limited — outbound calling campiagns are a great way to drive incremental measurable pipeline and revenue while helping sales teams improve productivity and revenue / FTE.

Facial Recognition Goes Mainstream: Marketing Implications Yet to Come

29 May

First there was Minority Report and a future where digital billboards would recognize people and present overly personal advertising. Then the technology became real as smart digital signage learned to recognize gender and facial expressions of passers-by.

Now, face.com is making a mainstream business out of facial recognition of uploaded photography and TechCrunch reports that “Face.com’s CEO has shrugged off rumors that it is being acquired by Facebook for up to $100 million when we asked. But the addition of its facial recognition tech to Facebook’s mobile apps could make sure friend tagging continues as the social network’s user base shifts away from desktops.”

While it’s hard to know what will happen with the current generation of facial recognition technology, a future of facial recognition may not be that far off. Whether used for recognizing repeat customers in a retail store or identifying marketable characteristics in an out of home advertising environment or online, the face may be the next frontier of marketing.

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