Lead Lifecycle Analytics Essential Metrics for Perpetual Revenue Growth

Ian MichielsGleanster@InsightFanatic

Sponsored by:

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About the Research Findings

Lead Prioritization Gleansight(Nov 2011)

Top Performers: Respondents that achieved Top Quartile performance in key KPI’s

Everyone Else: Everyone ElseTODAY’S STATS

Total survey responses: 432Qualified survey responses: 321

REVENUEAVG CLICK-THROUGHLEAD-TO-SALES CONVERSION

MarketingAutomationGleansight(Dec 2011)

Growth in:

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Agenda for Today…

• 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?”

In a world…

Mr. CEOWe 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…

MaryVP of Marketing

What are my options?

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“I just don’t know…”

Option 1: Tell Him Yes, and Hope We Can

MaryVP of Marketing

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%.

MaryVP of Marketing

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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?

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

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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• Buying Cycle

• Sales Cycle

• Lead Lifecycle

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

Leads Prospects Customers

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Attention•Known Problem?

Interest•Recognized need

Desire•Seek solution

to need Action

1) Buying Cycle

Goal #1: Become a trusted advisor – DON’T SELL!Goal #2: Relevant communications

EmailWebsiteSearch

Social Media

VideoMobile

Banner AdsWebinars

EventsPR

AdvertisementsDirect Mail

Re-TargetingMicrositesAffiliations

MARKETING

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• 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.

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

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

Lead Lifecycle Management

BUYING CYCLE

SALES CYCLE

CUSTOMERSERVICE

Nurture Opportunities “Not Ready to

Buy”

Cross-Selling and Up-Selling

MAX

IMIZ

E RE

VEN

UE

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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

Buying Cycle Sales Cycle Service

Customer Lifecycle

Leads Prospects Customers

MarketingSales

Marketing Sales

Marketing Sales

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Follow the Revenue

Buying Cycle Sales Cycle Service

Customer Lifecycle

Leads Prospects Customers

RevenueCUSTOMERS

UP-SELLING / CROSS SELLING

RevenuePROSPECTS

DROP OUT OF PIPELINE

Revenue

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There is no Golden Metric

Buying Cycle Sales Cycle Service

Customer Lifecycle

Leads Prospects Customers

RevenueCUSTOMERS

UP-SELLING / CROSS SELLING

RevenuePROSPECTS

DROP OUT OF PIPELINE

Revenue

Measurem

ent

Measurem

ent

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

Buying Cycle Sales Cycle Service

Customer Lifecycle

Leads Prospects Customers

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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?

MaryVP of Marketing

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15 Critical Metrics

But, don’t be overwhelmed…

Lead Lifecycle Metrics

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Lead Lifecycle Analytics DashboardPeriod 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

ETIN

G S

UC

CESS

METR

ICS

MA

RK

ETIN

G &

SA

LES

ALIG

NM

EN

T M

ETR

ICS

SALE

S SU

CCES

S M

ETRI

CSLI

FECY

CLE

REVE

NU

E M

ETRI

CS

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Lead Lifecycle Analytics DashboardPeriod 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

ETIN

G S

UC

CESS

METR

ICS

MA

RK

ETIN

G &

SA

LES

ALIG

NM

EN

T M

ETR

ICS

SALE

S SU

CCES

S M

ETRI

CSLI

FECY

CLE

REVE

NU

E M

ETRI

CS

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Lead Lifecycle Analytics DashboardPeriod 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

ETIN

G S

UC

CESS

METR

ICS

MA

RK

ETIN

G &

SA

LES

ALIG

NM

EN

T M

ETR

ICS

SALE

S SU

CCES

S M

ETRI

CSLI

FECY

CLE

REVE

NU

E M

ETRI

CS

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Lead Lifecycle Analytics DashboardPeriod 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

ETIN

G S

UC

CESS

METR

ICS

MA

RK

ETIN

G &

SA

LES

ALIG

NM

EN

T M

ETR

ICS

SALE

S SU

CCES

S M

ETRI

CSLI

FECY

CLE

REVE

NU

E M

ETRI

CS

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

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: QuarterlyFormula Formula

Inquiries 1000 Inquiries 2544Ratio to MQL 40% Ratio to MQL 40%MQL 400 1000*.40 MQL 1018 2544*.40Ratio to SAL 80% Ratio to SAL 80%SAL 320 320*.80 SAL 814 1018*.80Ratio to SQL 89% Ratio to SQL 89%SQL 285 285*.89 SQL 725 814*.89Ratio 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?

Lead Lifecycle Analytics in Action

Period: Quarterly Period: QuarterlyFormula Formula

Inquiries 1000 Inquiries 2544Ratio to MQL 40% Ratio to MQL 40%MQL 400 1000*.40 MQL 1018 2544*.40Ratio to SAL 80% Ratio to SAL 80%SAL 320 320*.80 SAL 814 1018*.80Ratio to SQL 89% Ratio to SQL 89%SQL 285 285*.89 SQL 725 814*.89Ratio 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

Awesome, but does anyone do this?

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)

0% 25% 50% 75% 100%

42%

49%

54%

62%

71%

79%

Top PerformersSource: Q4’11 Marketing Automation, n= 378

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Web

Analytics

Stand-Alone E

mail M

arketi

ng Tool

Marketi

ng Automati

on Tool

Microsit

es0%

25%

50%

75%

100% 85%

59%43%

23%

82%96%

24% 16%

Top Performers Everyone Else

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

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

3) Let Technology do the Heavy Lifting

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Q&A

Thanks!

Ian MichielsGleanster@InsightFanatic

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Guide to Lead Lifecycle Analytics

Deep Dive: Lead Lifecycle Analytics

All registered attendees will begetting a complimentary copy via Act-On!

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