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

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“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!”

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One woman fights for success…

Mary VP of Marketing

What are my options?

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“I just don’t know…”

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Option 1: Tell Him Yes, and Hope We Can


Marketing Spend + Sales Effort = ?

?

? ?

? #

I’m not sure exactly how effective my marketing spend was last year?

But, we reached our targets.

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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%.


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• 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

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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

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What’s MQL and SAL?

…Let’s dive into some key concepts

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#AOWEB

• Buying Cycle

• Sales Cycle

• Lead Lifecycle

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Demand Generation Concepts

What’s with all the cycles and circles?

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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

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The Birds Eye View of Lead Generation

Buying Cycle Sales Cycle Service

Customer Lifecycle


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Attention

• Known Problem?

Interest

• Recognized need

Desire

• Seek solution to need

Action

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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.

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2) Sales Cycle Engagement

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• 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

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3) Service

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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

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What are the levers that impact revenue?

Hint: There’s more than one.

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It’s Not a Handoff… It’s a Team Effort


Customer Lifecycle


Marketing Sales

Marketing Sales

Marketing Sales

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Follow the Revenue


Customer Lifecycle


Revenue CUSTOMERS

UP-SELLING / CROSS SELLING

Revenue PROSPECTS

DROP OUT OF PIPELINE

Revenue

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There is no Golden Metric


Customer Lifecycle


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

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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


Customer Lifecycle


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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?


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15 Critical Metrics

But, don’t be overwhelmed…

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Lead Lifecycle Metrics

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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

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Spend / Channel




Cost per SAL





Track in CRM

Sales Cycle-Time






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

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Spend / Channel




Cost per SAL





Track in CRM

Sales Cycle-Time






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

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Spend / Channel




Cost per SAL





Track in CRM

Sales Cycle-Time






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

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• Exactly how many leads do I need to reach 2x sales growth?

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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

?

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• How do I justify more budget?

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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!

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• Yes… almost

• Check out the stats on Top Performers

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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

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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

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How do Top Performers Calculate Metrics

Source: Q4’11 Marketing Automation, n= 378

Currently Using Tool

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Top 3 Critical to Success Factors for Top Performers

(Tactics you can’t succeed without…)

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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)

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• 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

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2) Standardize Definitions for Measurement

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• 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

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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

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