This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

May 2013

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better

Action to Convert More Leads In its infancy, customer relationship management (CRM) technology was originally designed as a uni-directional system of record: an efficient database of demographic and firmographic information, populated by sales or customer service reps every time they interacted with a known prospect or account. What if, however, a modern CRM deployment could virtually think for itself, supported by the marketing team, informing the selling organization when a potential buyer took actions that revealed them as a “hot lead?” This Research Brief explores a number of ways in which CRM, when enhanced with marketing, sales, and social intelligence, can provide a more powerful foundation for customer acquisition and engagement.

Why the Hidden Sales Cycle Matters The traditional corporate lifecycle holds the marketing team accountable for generating leads, which are then qualified as sales-ready, and finally turned over to the sales “closers” for revenue generation. If this storyline was representative of contemporary business-to-business (B2B) activities, then the bottom two-thirds of Figure 1 would be simple enough to represent such a

Figure 1: The Hidden Sales Cycle Increases Pressure on Lead Scoring

Source: Aberdeen Group, January 2013

Research Brief

Aberdeen’s Research Briefs provide a detailed exploration of key findings from a primary research study, including key performance indicators, Best-in-Class insight, and vendor insight.

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better Action to Convert More Leads Page 2

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

one-way flow of customer and account data in the sales process. Indeed, the traditional deployment of the CRM system described above would be sufficient in this scenario: the marketing team could upload sales-ready leads into the CRM, and walk away from any further involvement, assuming that sales would close all of the opportunities worth closing, and launch new campaigns to add more leads to the funnel.

In reality, selling to today’s highly educated business consumers mandates an understanding of the buyer’s power: individuals and enterprises whom we identify as potential customers have enormous resources in hand to evaluate our products and services long before we identify them as a marketing opportunity or qualified sales lead. This is what Aberdeen’s Marketing Effectiveness and Strategy research refers to as “the hidden sales cycle” of the customer lifecycle: the pre-sales window of activity when a prospect conducts their own research into our products, solutions, and companies, often tapping into user-generated social media content that allows them, not the selling organization, to determine whether they become a potential buyer. Today’s savvy pre-customers don’t need to respond to our outbound marketing efforts, nor our sales cold calls, in order to enter the top third of the sales cycle represented in Figure 1. Indeed, the nature of the hidden sales cycle contradicts the traditional assumption that the “waterfall” or gravitational pull of the classic sales funnel guarantees that potential buyers will inevitably make their way into the hands of enterprise sales closers.

Figure 2: CRM is More Effective When Marketing-Integrated

Source: Aberdeen Group, February 2012

Instead, contemporary marketing leaders need to find a way to maximize the likelihood that when the pre-buyer’s inflection point occurs — something in their business motivates them to indirectly search for a product or service — the potential customer is somehow pre-positioned to locate positive and enticing content that will motivate them to un-hide themselves and reveal, through their

70%65%

53%

38%

46%

24%

20%

30%

40%

50%

60%

70%

Heavy integrationof marketing lead

management with CRM

Ability to measureclose rate of marketing-

generated leadsin CRM

Perc

ent i

ndic

atin

g 4/

5 on

1-5

sca

le

n = 163

Best-in-Class Industry Average Laggard

The Lead-to-Win Best-in-Class

In January through March 2013, Aberdeen surveyed 165 end-user sales organizations to understand how the top performers among them use bottom-of-funnel tools to support sales effectiveness. The performance metrics used to define the Best-in-Class (top 20%), Industry Average (middle 50%), and Laggard (bottom 30%) among these sales teams are: √ 91% team attainment of

sales quota, compared with 56% and 22% among Industry Average and Laggard firms.

√ 87% of sales reps achieving annual quota, compared with 48% and 20% among Industry Average and Laggard firms.

√ 6.5% year-over-year increase in team attainment of sales quota, vs. 1.2% for Industry Average companies and an 8.8% decline among Laggards.

√ 2.3% year-over-year improvement in (reduction of) average sales cycle; Industry Average and Laggard companies reported a 1.2% improvement and a 3.5% worsening (lengthening), respectively.

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better Action to Convert More Leads Page 3

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

behavior, the potential to enter the visible two-thirds of the sales cycle referenced above.

This, of course, is the challenge for marketing today: how to create a brand and enough positive, searchable content — and buzz — that will remove all possible friction from the buyer’s journey through the customer engagement lifecycle. To support these efforts, companies with the most successful sales results are more aggressive in aligning the marketing and sales teams’ activities by integrating their respective databases of prospects and customers. In Figure 2, we learn relevant valuable lessons from Aberdeen’s research published in Breaking the Laws of Physics: Shortening the Last Sales Mile Through Workflow Automation (April 2013): that Best-in-Class enterprises (sidebar, page 2) are far more likely than under-performing firms to closely align their marketing automation and CRM platforms. The opportunities to recognize measurable business value from this kind of data integration are many, and include: more accurate databases of prospects and customers that are triangulated by quality control efforts in multiple systems; a stronger ability for the marketing team to calculate their real value to the company in terms of tracking how their pipeline development activities result in closed business; and enhanced opportunities for the sales team to reject potentially unqualified leads by turning them back over to marketing for re-nurturing, rather than simply throwing them away.

Not a “Jumbo Shrimp” Oxymoron: Valuing Sales Intelligence With an aggressive integration of the marketing automation system and CRM in place, solution providers can further augment their ability to effectively close sales deals by actively streaming sales intelligence (sidebar) into the CRM, as well. In Sales Intelligence: What B2B Sellers Need To Know Before the Call (June 2012), Aberdeen research provides insight into how the most effective sellers use both technology platforms and best practices to filter the overwhelming amount of data available to them about their prospects,

Figure 3: Sales Intelligence Integration with CRM, by Best-in-Class

Source: Aberdeen Group, February 2012

53%47%

30%

63%

20%

30%

40%

50%

60%

70%

Sales intelligenceintegrated into CRM

No CRM salesintelligenceintegration

Perc

enta

ge o

f Res

pond

ents

n = 215

Best-in-Class All Others

Sales Intelligence Defined

For the purposes of this research, the phrase “sales intelligence” refers to any information used to educate and enable the sales force and enrich the sales pipeline. This includes news on industry trends, consumer generated / social content, list / database providers, analyst reports, prospecting tools, competitive / market intelligence, and lead augmentation solutions

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better Action to Convert More Leads Page 4

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

customers, and markets, cutting through the web-generated “noise” to isolate which trigger events, news items, and even traditional lead lists are most valuable in determining whom to call and how to spend their valuable time selling, rather than manually researching sales prospects. As we see in Figure 3, the Best-in-Class companies from this data set (sidebar) are 77% more likely than All Others (53% vs. 30%) to stream crucial sales intelligence directly into their CRM platform. Sales teams are better equipped to meet or beat quota when the CRM record of a contact or organization includes not only internally generated information about a target, but relevant data about the individuals, company, or market gleaned from external sources. For example, a sales rep whose CRM instance is automatically populated with breaking news about a merger or acquisition scenario, change in a key account’s executive personnel, or new legislation that impacts their customer, can more quickly triangulate the situation and take action, when compared to a peer who only learns about such developments at the water cooler. A note of interest regarding Figure 3: among Industry Average and Laggard firms, 7% of survey respondents actually do not know whether their CRM is integrated with sales intelligence data or not; all 100% of Best-in-Class companies were in fact able to respond with a yes-or-no answer. This validates Aberdeen’s long-standing findings indicating that the most successful businesses are, somewhat obviously, better at understanding their own technology deployments as well as the data that these solutions support.

Can a Tweet Result in a Sale? In Social Selling: Unleashing the Power of Social Media on B2B Sales Enablement (July 2012), Aberdeen research answered this chapter heading with a definitive positive result: 57% of Best-in-Class companies (sidebar, page 5)

Figure 4: Social Selling Proves the Value of Richer CRM Data

Source: Aberdeen Group, March 2012

6.3%

3.3%

1.8%1.3%

2.4%

-1.7%-2.3%

-1.1%

-3%

-1%

1%

3%

5%

7%

Annualrevenue

Teamattainment

of quota

Repsachieving

quota

Customerrenewal

rate

Year

-ove

r-ye

ar c

hang

e

n = 182

Users of CRM integrated with social media All Others

The Sales Intelligence Best-in- Class

In March and April 2012, Aberdeen surveyed 215 end-user sales organizations to understand their sales effectiveness best practices. The performance metrics used to define the Best- in-Class (top 20%), Industry Average (middle 50%), and Laggard (bottom 30%) among these sales teams are:

√ 88% customer retention rate, vs. 78% among Industry Average and 14% for Laggard firms

√ 12.3% average year-over-year increase in overall team attainment of sales quota, vs. a 1.0% increase for the Industry Average and a 5.8% decline among Laggard respondents

√ 10.1% average year-over-year increase in the percentage of sales reps achieving quota, vs. a 1.2% decline for Industry Average and a 7.7% decline for Laggard respondents of (increase in) the cycle time among Laggard respondents

√ 18.0% average year-over-year increase in average deal size or contract value, vs. a 0.8% increase for the Industry Average and a 1.5% decline among Laggard respondents

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better Action to Convert More Leads Page 5

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

reported having closed at least one sales deal that was originated or sourced through social media; 36% of Industry Average and 24% of Laggard companies indicated the same. In Figure 4, we further dissect these research results in the context of CRM, discovering that companies populating the CRM with relevant social media content out-perform non-adopters in a number of significant sales effectiveness metrics on a year-over-year basis. The key word in the previous sentence is “relevant” — the concept of “social CRM” is ineffective if the virtual tidal wave of posts, tweets, blogs, and comments is simply dumped into the prospect or customer record. Rather, the value of social selling is best realized when companies only integrate into the CRM the user-generated content that matters to their marketers and sellers.

Ideally, the technology solutions used to marry social media to prospect and customer records can be configured at the management, administrative, and individual contributor job role levels. For example, while a social media-savvy B2B salesperson recognizes the value of following their contacts and accounts on Twitter, the very act of reading all the user-generated content from their territory could easily doom them to a “drinking from the fire hose” existence that would effectively reduce their selling time due to the sheer volume of tweets and posts. Alternatively, configuring their individual CRM account list with the specific individuals and organizations whose content they actually see, visually married to their CRM interface, provides a better opportunity to understand only the relevant, real-time thoughts and needs of their prospects and customers, without becoming overwhelmed by too much social media content.

Triangulating Marketing, Sales, and Social Intelligence to “Know Thy Customer” We have now seen the value of integrating marketing automation, sales intelligence, and social media content into the CRM platform, transforming it from a static system of record into a dynamic system of customer engagement. Much has been written about today’s consumer-driven economy, focusing on how the balance of power has so dramatically shifted from the seller of goods or services to the buyer, thanks to Internet-based content, and user-generated information in particular (think back to when we were first able to confront a car salesman with the faxed wholesale cost data from Consumer Reports... that was only the start of the consumer revolution). In the B2B space, the ability to create a more dynamic sales cycle offers marketers and sellers a glimmer of hope in terms of swinging this power pendulum back toward a place of parity. The process starts with the old, but true axiom that “knowledge is power,” and is amplified by data uncovered by Aberdeen in research conducted for the pending “Grab the Low-Hanging Fruit: How Best-in-Class Companies Leverage a 360-Degree Customer View.” Here, the strongest-performing firms demonstrate a consistently higher degree of quality when it comes to accurately understanding the people, companies, and markets they serve. Indeed, in Figure 5, we see a direct correlation between the accuracy of prospect and customer data and Best-in-Class performance (sidebar, page 6) throughout the entire lifecycle of customer engagement.

The Social Selling Best-in-Class

In April and May 2012, Aberdeen surveyed 173 end-user sales organizations to understand how the top performers among them use social media. The performance metrics used to define the Best-in-Class (top 20%), Industry Average (middle 50%) and Laggard (bottom 30%) among these sales teams are: √ 79% of sales reps achieved

quota in the last calendar or fiscal year, compared with 43% and 15% among Industry Average and Laggard firms

√ 16.3% year-over-year increase in total company revenue, vs. 4.1% for Industry Average companies and an 8.7% decline among Laggards

√ 8.9% year-over-year increase in average deal size or contract value; Industry Average and Laggard companies reported 1.7% increase and a 6.6% decline, respectively

√ The average sales cycle was shorted by the Best-in-Class by 0.7%, and by Industry Average firms by 0.2%; Laggards report an average lengthening of the sales cycle of 5.3%

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better Action to Convert More Leads Page 6

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Figure 5: Quality of Account Data: Always Stronger by Best-in-Class, Variable by Customer Lifecycle Stage

Source: Aberdeen Group, August 2011

At each step of the customer experience, the most successful companies within this data set report far more accurate contact and organizational data than under-performers. No marketer, seller, or customer service rep should spend time figuring out which “version of the truth” regarding their account specifics is the right one, taking time away from actually doing their job, but the majority of Industry Average and Laggard companies actually burden their customer-facing team members with exactly that inefficient situation. Of course, Figure 5 also teaches us two sobering lessons: even for Best-in-Class companies, account data never even reaches a three-quarters level of accuracy; also, they, like all organizations on the whole, unfortunately retreat from initiatives to keep customer records accurate once the initial marketing and selling activity is complete. This may be a requisite though undesirable reality of contemporary business development metaphors: in the hyper-competitive world of sales, “you take what you can get”… or perhaps, “even a blind squirrel finds the occasional nut.” In other words, while cleanliness is next to godliness in terms of overall customer management, no one has the time to be perfect.

Conclusion: Sales Context Nirvana May Be Within Reach The intersection of CRM-integrated marketing, sales, and social media content offers significant promise for companies seeking to more effectively acquire and service B2B customers. Once we understand that a hidden sales cycle exists, we are faced with both a challenge and an opportunity to impact how our potential buyers learn about, and are potentially introduced to, our products and services. Imagine the scenario such as this: an enterprise sales rep covering a large account has faithfully kept their CRM record up-to-date with key influencers’ and decision-makers’ basic demographic data, including relevant LinkedIn and Twitter handles.

50%

73%

63%

44%

33%41% 38% 37%

23%27%

42%

23%

0%

15%

30%

45%

60%

75%

Marketing stage:lead generation

to contact

Sales stage:contact tocontract

Fulfillment stage:order to cash

Service stage:customer retention,

up-sell andcross-sell

Acc

urac

y of

Cus

tom

er D

ata

n = 104

Best-in-Class Industry Average Laggard

The 360° Customer View Best-in-Class

In June and July 2012, Aberdeen surveyed 104 sales organizations to understand their sales effectiveness best practices. The performance metrics used to define the Best-in-Class (top 20%), Industry Average (middle 50%), and Laggard (bottom 30%) among these sales teams were:

√ 94% customer retention rate, vs. 81% among Industry Average and 19% for Laggard firms

√ 11.6% average year-over-year increase in overall team attainment of sales quota, vs. a 0.3% decrease for the Industry Average and a 0.7% decrease among Laggard respondents

√ 13.2% average year-over-year decrease in (improvement in) the average sales cycle time, vs. 1.0% and 1.9% respective increases in (worsening of) sales cycles for Industry Average and Laggard respondents

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better Action to Convert More Leads Page 7

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

They have also taken the time to indicate in the CRM which geographic and industry markets are important to their account, as well as which companies are identified as the prime competitors of their target customer. Rather than randomly call or email their contacts to try to sell them something, however, the sales rep, supported by a rich CRM-based system of engagement, is empowered with marketing, sales, and social media intelligence that constantly guides them towards the most beneficial daily activities. For example:

• A senior-level contact in the target account downloads a content marketing asset, as part of a marketing campaign around the new product release. Because the marketing automation platform is fully integrated with the CRM, the rep receives immediate notification that this executive is displaying some flavor of pre-buying behavior. This doesn’t mean the rep should call the executive within minutes – that would be too obvious and somewhat creepy – but a follow-up call or request for the marketing team to send a pre-positioned secondary message specifically tailored by industry or geography can effectively triangulate the marketing efforts to nurture the lead with eventual human sales activity. From the perspective of the executive target, moreover, they may well be more receptive to a more engaging conversation because of the topical context precipitated by their own activity.

• The marketing team successfully registers 500 individuals for a webinar or live product-oriented event. Should sales call all of them? Should sales call only those who attend? This can easily result in the premature passing of “leads” to sales; an all-too-familiar scenario teaches us that not everyone who downloads, registers, or attends is truly a potential buyer. What if, however, the sales team was enabled by an understanding of which registrants, attendees, or any other relevant individuals were posting or re-tweeting around the designated event Twitter hashtag? Again, this brings us to the power of context: it is far more effective for a sales organization to engage with a smaller number of more highly filtered contacts — supported by triangulated marketing, sales, and social intelligence — than to take the traditional, frustrating route of trying to find the veritable needle in the marketing haystack.

Ultimately, sales effectiveness is best achieved when practitioners can call the best leads, when empowered by the best information about their prospects and customers. By understanding how the behavior of those target individuals and companies self-defines which opportunities are real and actionable, Best-in-Class companies are more efficient when it comes to uncovering value within a hidden sales cycle, and then following up with a well-oiled machine to nurture and close deals more often and more quickly. As a result, these top performers have a far better capacity for understanding how to maintain and grow their customer base and their business as a whole. Indeed, Aberdeen research conducted for Better Sales Forecasting Through Process and Technology: No Crystal Ball Required (July 2012) reveals how another set of Best-in-Class companies (sidebar) more effectively and logically understands how to analyze and forecast all of this customer-oriented data to better predict which deals will close, for how much, and when. As a result, they are more able than under-performing firms to align the best opportunities

The Sales Forecasting / Analytics Best-in-Class

In April and May 2012, Aberdeen surveyed 1044 sales organizations to understand their sales forecasting best practices. The performance metrics used to define the Best-in-Class (top 20%), Industry Average (middle 50%), and Laggard (bottom 30%) among these sales teams were:

√ 90% customer retention rate, vs. 76% among Industry Average and 41% for Laggard firms

√ 13.0% average year-over-year increase in overall team attainment of sales quota, vs. a 1.3% increase for the Industry Average and a 5.2% decline among Laggard respondents

√ 6.5% year-over-year improvement of (reduction in) the average sales cycle, vs. 1.1% for Industry Average firms and a 4.7% worsening (increase) among Laggard organizations

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better Action to Convert More Leads Page 8

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

with the most effective resources as each selling cycle draws to a close. Figure 6 captures the essence of effective customer management, showcasing how these top performers are simply better at running their respective businesses. And, it should be noted, 53% of these Best-in-Class enterprises fully integrate their sales forecasting workflow into the CRM, fully 66% more often than Industry Average and Laggard performers. In terms of growing the CRM from a system of record to a system of engagement, this final piece of the customer-centric data integration CRM puzzle falls neatly into place.

Figure 6: Better Insight into the Customer = Better Performance

Source: Aberdeen Group, May 2012

For more information on this or other research topics, please visit www.aberdeen.com.

83%78%

61% 61%59%

52%

45%

35%

30%

45%

60%

75%

90%

Understandingcustomers'business

challenges

Demonstratingindustry / marketknowledge in the

sales process

Using forecastingprocess

to add extra resourcesto deals most likely

to close

Understanding whichopportunities are most /

least likely to close

Perc

ent i

ndic

atin

g 4/

5 on

1-5

sca

le

n = 144

Best-in-Class All Others

Optimizing the Marketing and Sales Process: How the Best-in-Class Take Faster, Better Action to Convert More Leads Page 9

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Related Research Breaking the Laws of Physics: Shortening the Last Sales Mile Through Workflow Automation; April, 2013 CRM 2013: Generating Business Value throughout the Enterprise; April 2013 Motivate, Incent, Compensate, Enable: Sales Performance Management Best Practices; January 2013 CRM 2013: Manufacturing Success through Mobilized, Integrated, and Flexible Deployments; January 2013 Collaborate, Listen, Contribute: How Best-in-Class Sales Teams Leverage Social Selling; November 2012

Train, Coach, Reinforce: Best Practices in Maximizing Sales Productivity; October 2012 Better Sales Forecasting Through Process and Technology: No Crystal Ball Required; July 2012 Sales Intelligence: What B2B Sellers Need To Know Before the Call; June 2012 Partner Relationship Management: Channeling Better Sales Results; March 2012 Sales Mobility: How Best-in-Class Remote Sellers Are Replacing “See” with “Do”; March 2012

Author: Peter Ostrow, Vice President and Research Group Director; Customer Management, Sales Effectiveness (peter.ostrow@aberdeen.com) LinkedIn Twitter

For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2013a)