Avoiding The “Silver Bullet Syndrome”of Marketing Automation Software Five Key Areas Every Company Should Address First to Insure Success

Although current adoption rates are less than 10%, mar-

keting automation technology is on the cusp of explosive

growth. Leading analyst firm SiriusDecisions predicts that

50% of BtoB marketers will adopt marketing automation

systems by 2015.

As the category stands poised for dramatic expansion

in the coming years, analysts also caution the next wave

of adopters to avoid the mistakes of companies who

rolled out other enterprise software platforms such as

Customer Relationship Management (CRM), Enterprise

Resource Planning (ERP) and Warehouse Management

Systems (WMS).

Unfortunately, many of the companies that deployed these

systems bought into the “silver bullet syndrome” believing

that technology would magically eliminate their problems.

Take, for instance, adopters of CRM systems. The promise

of shorter sales cycles, more accurate forecasts and higher

close rates was extremely appealing. However, the reality

was that at the end of a lengthy deployment, they were

still left with many of the same sales problems they had

prior to implementation.

Illustrating this point, the 2009 Sales Performance report

from CSO Insights found that the number of firms who

have formally implemented a CRM system had increased

from 53% in 2003 to 71% in 2009. However, the report

also found that almost one in four of the firms surveyed

had internal adoption rates of 50% or less for the systems.

Why do so many companies fall into this trap of invest-

ing in software and then struggle to successfully use the

tools and apply the data? While not intentional, it’s often

assumed that technology is the magic cure for solving

issues whether it’s marketing, sales or inventory. Promises

such as greater efficiency, economy of scale and increased

productivity are so compelling they cause companies to

fast forward past the critical phase of auditing the real

problems in their business processes.

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2 • A DemandGen Repor t

This “silver bullet” pipe dream often causes companies to

overlook the underlying problems within their organiza-

tion — the lack of process behind the technology. For early

adopters of marketing automation technology, addressing

their marketing and sales process will be critical to ensure

success and avoid the pitfalls that other technology adopters

have historically made.

The Demands Of The New BuyerThe need for pairing lead management process with mar-

keting automation has become even more pronounced in

the last five years as BtoB buyers have dramatically changed

their buying behaviors. Where sales organizations were

historically able to control the engagement process with

prospective buyers by keeping a tight hold on customer

lists and competitive pricing data, buyers now have almost

endless access to this information. As a result, “talking to”

the buyer is now not enough. Marketers must transition to

“speaking with” the buyer. In other words, marketers must

manage the “buyer dialogue.”

Armed with this new intelligence, buyers are now dictating

the pace and rules of engagement. For example, a recent

DemandGen Report survey found that only 10% of recent

BtoB buyers were initially engaged through a cold call from

a salesperson. Comparatively, more than 80% indicated that

they either contacted the vendor directly or requested to be

contacted after conducting their own research.

In the Web 2.0 world, buyers now conduct more anony-

mous research, as well as connect with peers and industry

experts for information on the best products, best prices

and best terms for a solution…all before they engage with

the sales person at the vendor. Web 2.0 technologies —

blogs, Twitter, online communities, user reviews — have

made it even easier for buyers to directly access competitive

information on suppliers, as well as openly shared vendor

experiences with peers.

This has caused a fundamental shift in the buying process.

For marketing and sales professionals, this means a transfor-

mation in not only how they communicate to their audi-

ence, but also in how they plan their demand generation

campaigns, and more importantly, how they manage the in-

quiries that come from those campaigns. Utilizing marketing

automation to blast the entire database typically results in

low response rates and risks alienating your own contacts.

Furthermore, routing every “lead” that raises their hand in

response to an offer directly to sales before qualification re-

sults in frustration and wasted time for all involved. Instead,

marketers must develop lead management processes that

allow them to respond to the buyer by providing appropri-

ate content based on where the buyer is in the cycle. Defin-

ing the process for this “buyer dialogue” is imperative, and

must be the first step if successful marketing automation

deployment is going to occur.

“While technology enables lead nurturing to

convert [prospects] to customers at a lower

cost, it is not the complete answer. Those

marketers I’ve talked to who have successfully

implemented automation treated lead

nurturing management as a business-process

initiative, not a technology initiative.”

Richard Fouts, Research Director,

IT Markets and Channels, Gartner

–BtoB Online

3 • A DemandGen Repor t

Putting Process First In another recent survey conducted by DemandGen Report,

more than 50 early adopters of marketing automation indi-

cated any breakdowns with their rollouts were not due to

technology failures, but rather a lack of preparation from a

process standpoint. When asked: “If you were to head up the

rollout of a marketing automation system at another organiza-

tion, what would you do differently?” 79.2% said they would

“better prepare their organization by building proper process-

es and content offers to feed the automation system.”

The recently published report from Aberdeen Group titled

“Lead Lifecycle Management: Building a Pipeline that Never

Leaks,” stressed that companies who take a holistic view of

demand generation and lead management produce sub-

stantially better results than those that put technology first.

In fact, the Aberdeen report found companies classified as

“Best in Class” in lead management were 2 times as likely

as all other organizations to have processes in place to route

prospect and customers to different stages in the buying

cycle or sales cycle.

“Every organization will have a different process for routing

leads within the lead lifecycle approach. Unfortunately, the

research suggests very few organizations actually take the

time to map out the full lead lifecycle process to identify

inefficiencies and best practices within existing processes,”

the Aberdeen report stated.

The development of a lead management process is not just

a marketing exercise. It requires the involvement of sales, as

well as groups like IT, operations and finance. “Any resource

or group that has a part in the demand generation process

(inquiry to close) should ideally be part of the lead manage-

ment journey,” suggests Carlos Hidalgo, President of The

Annuitas Group.

Avoiding BreakdownsSkipping the critical process evaluation phase has caused

many marketing automation rollouts to stall at the starting

gate. In some cases, companies realized that they didn’t

have enough content to feed their new high-powered en-

gine. In others, breakdowns were revealed in the collabora-

SALES FOCUS

Lead-nurturing ProgramsPlug the Leak

Problem ID Exploration Competitive Assessment ROI Justification Vendor Selection

MARKETING FOCUS

Lead information capture, scoring, routing, and monitoring close the gap.

Improving Efficiency Through Process Based Lead Management

tion between marketing and sales on a common definition

of a qualified lead. Still in others, there were issues with

regard to the handling of a lead once it is qualified. The

point is no matter how good the technology, these process

issues will eventually surface and hamper marketing

automation’s effectiveness. Marketing and sales must work

together to fix these process gaps.

Quantifying this disconnect in the revenue generation

process, the Aberdeen “Lead Lifecycle” report found over

80% of BtoB organizations admitted that a lack of synergy

between the sales and marketing functions ultimately leads

to lost revenue opportunities. Two common breakdowns

that have emerged when companies fail to align their

sales and marketing processes and goals include:

A lack of organization of leads/opportunities:

Without common definitions and business rules for the

process of qualifying and routing leads through the

sales funnel, leads that are not immediately ready to

buy are often abandoned. As a result, qualified

but “not-yet-ready-to-buy” prospects often leak

out of the funnel.

Duplication of efforts & records: In companies

where sales and marketing are working in silos, leads

are entered simultaneously into both sales and market-

ing contact databases. This duplication results in data

confusion and reporting redundancy as the same con-

tact is often entered and tracked under multiple records.

In addition, the likelihood of a prospective buyer receiv-

ing repetitive or disjointed messages increases, reducing

open rates and the overall effectiveness of campaigns.

Successful companies who address their lead management

process develop service level agreements (SLAs) for the

definition of a lead, how it becomes a marketing or sales

qualified lead, and then how it will be moved through

the sales cycle after qualification. For example, if a lead is

determined to be qualified but the salesperson learns the

company does not yet have budget in place, there should

be defined processes to hand that lead back to marketing

so the prospect can be entered into a nurturing campaign

until they are ready for sales engagement.

Five Lead Management Areas to Address to Insure Success

As stated by industry analysts and demonstrated by the

case studies of leading companies in financial services, high

tech and other vertical industries, lead management should

be a business-process initiative more than a technology

initiative. In order to make the transformation and realize

the true power of marketing automation, companies must

first address these five areas of their business:

DATABASEMANAGEMENT

LeadManagement

Process

LEAD PLANNING

LEAD QUALITYLEAD MAPPING

MEASUREMENT & BENCHMARKING

5 • A DemandGen Repor t

USA Financial, a leading provider of marketing services for financial advi-

sors, had a problem most marketers would die for – too many leads. The

problem, however, was that even though they were delivering hundreds

of leads every month to sales, they had zero insight into the effective-

ness of the campaigns. After an evaluation of their lead management

process it became clear that the focus needed to turn from quantity to

quality of leads.

The Annuitas Group was brought in to conduct a comprehensive audit

of the company’s existing sales and marketing processes, and to assess

how they could better leverage their recent Silverpop Engage B2B imple-

mentation. Upon completion, The Annuitas Group identified several

opportunities for improving the company’s lead management processes.

One example that became obvious was that the sales team spent a large

amount of time determining whether or not leads were qualified. In ad-

dition, The Annuitas Group also identified that the majority of these

leads were not converting into qualified opportunities, leading to a lack

of confidence and a disconnect between sales and marketing.

“Not only was this overwhelming to our sales reps, but it was very frus-

trating as well,” said Raeanne Thompson, VP of marketing services at

USA Financial. “Our reps were essentially searching for a needle in a

haystack and felt like they were spinning their wheels.”

Overall, The Annuitas Group addressed every area of USA Financial’s

lead management process including database segmentation, lead quali-

fication, lead scoring and lead nurturing.

Specific to lead qualification, The Annuitas Group developed a set of ques-

tions for new prospects and captured the information asked — revenue,

type of advisor and type of insurance being written — to help determine

if a lead was qualified. Only those leads that qualified as sales-ready were

routed directly to the sales team. Those not qualified were either sent to a

nurture campaign or disqualified. This closed loop system enabled sales to

be more efficient and also feed reporting data back to the Engage B2B sys-

tem. For marketing, their credibility with sales increased dramatically and

they were also able to demonstrate the ROI of their marketing programs.

As a result of this process-based approach to lead management, the

volume of qualified leads sent to sales increased by triple digits, the

sales pipeline increased by more than 50%, and sales conversion rates

doubled. In addition, the intelligence gathered from the metrics and

reports is used to optimize future campaigns.

“Sales focuses on closing deals, and marketing zeroes in on delivering

sales the highest-quality leads,” Thompson said. “Because the sales team

appreciates the value of the leads we are now delivering, the relationship

between marketing and sales has become much more collaborative.”

1. Digging into the Data

Database management may not be the most glamorous

part of the revenue generation process, but it is an under-

pinning that has ripple effects across all areas of sales and

marketing. In fact, the database can often be the most

significant area in an internal audit to identify gaps in the

sales & marketing process.

Analysis of both the marketing database and the CRM

system and can reveal weaknesses and inconsistencies with

lead capture. These weaknesses can lead to duplication of

data, or data becoming obsolete. A data hygiene process

should be implemented whereby duplicates are consoli-

dated, old records are removed, and incomplete data is

enhanced with current data. This process should happen

once a year at minimum.

In addition, by digging into the data and analyzing com-

mon traits among customers, profiles should be created to

define the ideal customer and prospect. These profiles will

serve as a basis for refining the demand generation and

lead management process.

2. Lead Planning

Success can’t be measured unless an objective is estab-

lished, yet too many marketing and sales organizations

operate without a lead generation objective for marketing.

Effective lead management starts with marketing under-

standing how many qualified leads need to be sent to sales

so that revenue goals can be obtained. Together, marketing

and sales should identify each step in the inquiry-to-sales

cycle. Then, working backwards from the revenue target,

determine how many leads are needed in each phase of

PROCESS PROOF POINTS: USA FINANCIAL INVESTS IN LEAD QUALIFICATION

6 • A DemandGen Repor t

The recognized leader in contract office furniture, Herman Miller has

built a reputation for innovation and operational excellence. They

maintain a global presence with operations, sales offices, dealers and

customers in more than 110 countries and seven continents. However,

even they were not resistant to the economic downturn and decline in

sales over the past two years. As a result, they were forced to reevalu-

ate their lead management processes.

“The Annuitas Group conducted an audit of our existing systems and

processes, identified gaps and made recommendations on where we

had the opportunity to improve our process,” said Becky Billinghurst,

Senior Manager of Customer Information, Herman Miller. “They were

hands-on in investigating our lead capture process, meeting with mul-

tiple departments including sales, e-marketing, customer care and IT,

and even attending our industry trade shows.”

Following the initial audit, the Annuitas Group helped Herman Miller

build a marketing contact/lead database which was integrated with

the in-house opportunity management system used by the sales team.

“They spent a lot of time understanding what technology we had to

work with and then created a process and flow so that qualified leads

all filtered in to one place. There is no black hole anymore for leads.

We now know exactly what is happening to them and where they wind

up,” Billinghurst said.

The ability to track and measure lead flow has been a big benefit for

Herman Miller. “We now have something to benchmark against,” she

added. “We have the ability to evaluate which events are adding more

value than others. We can analyze wins and losses and the dollars

associated with those prospects, and track those deals back to the

source by establishing a unique ID for each lead.”

Prior to working with The Annuitas Group, Herman Miller had no pros-

pect database outside of its opportunity management system. Bill-

inghurst said the company has quickly grown its marketing database

to more than 14,000 records, which are “legitimate prospects.” Of

those 14,000 plus leads, 2,000 have already been qualified, represent-

ing revenue potential in the seven-figure range. “Our sales force now

receives leads that are better qualified with specific sales data,” Bill-

inghurst said. “We’ve realized significant increases in sales follow-up

on qualified leads, and we’ve increased our ability to rank marketing

activities based on ROI.”

Based on the success of its early work with The Annuitas Group, Bill-

inghurst said the company is now working on Phase II of the project,

including more advanced lead generation and lead nurturing, as well

as the possibility of implementing a marketing automation solution.

PROCESS PROOF POINTS: HERMAN MILLER RE-ENGINEERS LEAD MANAGEMENT

the cycle. For example, 10 sales means we need 25 propos-

als. 25 proposals means we need 50 demos. 50 demos

means we need 100 qualified leads. And so on.

Once this model is put in place, it should be monitored

on a regular (monthly, quarterly, etc.) basis. Over time,

marketing and sales will be able to see where their demand

generation gaps are, and will be able to make adjustments

to fill those gaps.

3. Focusing On Lead Quality vs. Lead Quantity

Many marketers get caught up in the volume of leads

generated rather than focusing on passing qualified op-

portunities to sales that are likely to close. Tony Jaros, VP

of Research at SiriusDecisions, recently categorized the

growing focus on lead nurturing and qualification as “the

second sea change” as the role of marketing continues to

evolve. “We have witnessed the charter of marketing —

and thus its relationship with sales — change twice in a

decade,” Jaros said.

While the first wave of change had marketing expanding

its role in demand creation, Jaros said this has resulted in

an over-emphasis on generating leads at the top of the

waterfall, and not enough work on lead nurturing and lead

acceleration in the later stages of the waterfall. “The over-

hype on the ‘create’ task has devalued the other tasks that

sales and marketing should be working on together.”

7 • A DemandGen Repor t

4. Mapping the Lead Route

Once processes for data, lead planning and lead qualifica-

tion are in place, companies should then start to map out

the internal route a lead will take from initial engagement

through becoming a new customer.

The development of a lead routing process is usually the most

overlooked component in the lead management process.

Determining how a qualified lead will be routed to sales, how

a non-qualified lead will be routed to a nurturing campaign,

and how sales will route not-ready-to-buy leads back to mar-

keting ensures that leads won’t leak out of the funnel.

As with other parts of the lead management process, these

lead routes should be developed by marketing and sales

jointly. As a matter of fact, this area more than any other,

will have a significant impact on how marketing and sales

work together. “Taking the time to understand the impact

of the process and work across all parts of the organization

(marketing to sales; sales to IT, etc.) will greatly enhance

adoption,” said Jay Hidalgo, CEO of The Annuitas Group.

“Conversely, it’s very difficult for one group (marketing for

example) to develop the process in isolation, roll it out to the

rest of the company and expect enthusiastic buy in.”

5. Establishing The Right Measurements/Metrics

Once companies have a process in place for how leads

will move from lead capture to the qualification and

nurturing, they are then able to measure their funnel and

establish benchmarks.

Ideally these metrics will not only evaluate the volume of

leads, but also identify a quantifiable impact on closed

business. By identifying what needs to be measured, how

it will be measured and where it will come from, the guess

work will be taken out of the demand generation process.

By pairing the power of optimized lead management

processes with marketing automation systems, companies

will be able to identify specific campaigns that accelerated

prospects through the buying cycle and resulted in closed

deals. Conversely, they’ll be able to identify which market-

ing activities are not working to increase sales revenue.

But marketing data is only part of the equation. “Companies

need to consider how to tie together all of their metrics across

the organization to produce better business intelligence,” said

Carlos Hidalgo, President of The Annuitas Group. “Market-

ing automation, CRM, customer support and finance systems

all produce their own metrics and reports. What’s lacking is

someone who brings all the metrics together and provides a

full 360-degree view of the customer.”

Conclusion: The Paybacks of Process Marketing automation is clearly a game-changing technol-

ogy and the list of companies that are implementing it to

gain competitive differentiation and advantage is expand-

ing quickly. However, the common ingredient among these

market leaders is that they have tightly-aligned marketing

and sales teams combined with a well-defined lead man-

agement process in place.

Filling the top of the funnel with leads is no longer good

enough to succeed. With the BtoB buyer now controlling

the rules of engagement, companies must have a lead

management process in place which maps to the entire

journey of the buyer.

Once a lead management process is in place, companies

have the ability to measure their marketing campaigns and

use the intelligence from these metrics to define future

programs. The impact to top and bottom line performance

has been dramatic for companies that have addressed

their lead management process and enabled it with mar-

keting automation.

8 • A DemandGen Repor t

The Annuitas Group is a provider of marketing and sales process consulting services

for B2B companies. Their proprietary methodology and audit services help clients

identify the gaps and opportunities within their lead management process. To date,

they have identified over $400 million of potential lost revenue for clients. In 2009,

both founders topped the rankings of the SLMA 50 Most Influential People in Sales

Lead Management. For more information, visit www.annuitasgroup.com.

DemandGen Report is a targeted e-media publication spotlighting the strategies and

solutions that help companies better align their sales and marketing organizations,

and ultimately, drive growth. A key component of our coverage focuses on the

sales and marketing automation tools that enable companies to better measure and

manage their multi-channel demand generation efforts. For more information, visit

www.demandgenreport.com.