Lead Process + Six Sigma = Increase in marketing Productivity

Lead Process + Six Sigma=Increase in Marketing Productivity

John M. CoeJohn M. CoeSales & Marketing InstituteSales & Marketing Institute

A. Charles ClarkA. Charles Clark+ Impact, LLC+ Impact, LLC

The Sales & Marketing Institute Develop and deliver content on B2B sales and marketingDevelop and deliver content on B2B sales and marketing

ConsultingConsulting Education/trainingEducation/training Publications Publications

““The Fundamentals of Business-to-Business Sales & The Fundamentals of Business-to-Business Sales & Marketing” Marketing” from McGraw-Hillfrom McGraw-Hill

White papers on web-site: B2BMarketing.comWhite papers on web-site: B2BMarketing.com

I’ve been on both sides of the sales lead processI’ve been on both sides of the sales lead process 15 years sales and sales management15 years sales and sales management 20 years marketing communications20 years marketing communications

+ Impact, LLC 6 Sigma implementations / marketing & sales effectiveness:

Coaching & ConsultingCoaching & Consulting TrainingTraining 3 Sigma for Sales / Marketing3 Sigma for Sales / Marketing

I too have been on both sides of the sales lead process 6 years -- sales and marketing6 years -- sales and marketing 13 years -- sales & marketing services – 13 years -- sales & marketing services – training, database training, database

design, call center mgt., inquiry fulfillment, web site development, design, call center mgt., inquiry fulfillment, web site development, advertising agency oversight, tech. documentsadvertising agency oversight, tech. documents

5 years – raw materials purchasing5 years – raw materials purchasing 3 years – Certified BB – sales, marketing, Cust service3 years – Certified BB – sales, marketing, Cust service

7 completed projects -- partner on 3 others 7 completed projects -- partner on 3 others

So What’s the Problem? B2B benchmarking studies show that for every 100 inquiries only B2B benchmarking studies show that for every 100 inquiries only

1-3 sales result – typical ratios:1-3 sales result – typical ratios: 100 inquiries (from all sources)100 inquiries (from all sources) 10-15 qualified sales leads at best10-15 qualified sales leads at best 1-3 sales 1-3 sales

Yet, 90% of marketing budgets are spent with the primary goal of Yet, 90% of marketing budgets are spent with the primary goal of “lead generation” – not a great result“lead generation” – not a great result

Cost of sales lead is higher than recognizedCost of sales lead is higher than recognized Average cost per inquiry is $200Average cost per inquiry is $200 Average cost per lead is $2,000+Average cost per lead is $2,000+

Management is hot on this trail In 2004 73% of Chief Marketing Officers said that In 2004 73% of Chief Marketing Officers said that

business development (lead process) was their # 1 business development (lead process) was their # 1 priority to tackle for 2005priority to tackle for 2005

In 2005 Forrester Research surveyed B2B marketing In 2005 Forrester Research surveyed B2B marketing executives on their top challengesexecutives on their top challenges 56% reported “generating more leads”56% reported “generating more leads” 52% reported “improving lead quality”52% reported “improving lead quality”

Senior executives are demanding ROI/ROE measurement Senior executives are demanding ROI/ROE measurement of marketing expenditures of marketing expenditures

How to improve lead results? Primary instinct of most marketers is toPrimary instinct of most marketers is to

Develop additional and/or improve current demand Develop additional and/or improve current demand generation campaignsgeneration campaigns

Fire the old agency – hire a new oneFire the old agency – hire a new one

But, the over-looked marketing problem isBut, the over-looked marketing problem is Improving the lead process to deliver more qualified leads Improving the lead process to deliver more qualified leads

from the current inquiriesfrom the current inquiries Agencies don’t do this – you do!Agencies don’t do this – you do!

Therefore this session is about fixing the Therefore this session is about fixing the leadlead processprocess first first before jamming more inquiries into a broken system – a classic before jamming more inquiries into a broken system – a classic six-sigma applicationsix-sigma application

What do you suppose CMO’s are suggesting for What do you suppose CMO’s are suggesting for business development? business development? Work smarter, not harder!Work smarter, not harder! We need to target the audience better!We need to target the audience better! Switch spending to better lead tactics!Switch spending to better lead tactics! Sales needs to do a better job of follow-up!Sales needs to do a better job of follow-up! Get on the agency to create better advertising!Get on the agency to create better advertising! Sales needs to do a better job of follow-up!Sales needs to do a better job of follow-up! (_____[(_____[insert your company’s favorite mgt.bromidesinsert your company’s favorite mgt.bromides] ___)] ___)

How do you change results without looking at the How do you change results without looking at the process that produces them?process that produces them?

“fixing” the lead process 66

“fixing” the lead process66

Detail the defect – what, when, where, how many, Detail the defect – what, when, where, how many, how often.how often.

Capture the voice of the customer / partnerCapture the voice of the customer / partner Determine relationships Determine relationships Y = Y = f(x1 x2 x3 xx)) Map the process – output standards – metrics Map the process – output standards – metrics Identify process ownership, process operators, Identify process ownership, process operators,

stakeholders & key internal partners.stakeholders & key internal partners. Fix the root cause – the critical Fix the root cause – the critical “Xs”“Xs” Institute improvement plans that sustain gainsInstitute improvement plans that sustain gains

Establish a process mind-set!

The Goals of Our Session To detail the seven-step B2B sales lead process To detail the seven-step B2B sales lead process

and the common mistakes that are made by and the common mistakes that are made by companies that sub-optimize resultscompanies that sub-optimize results

To suggest how six-sigma tools and methods To suggest how six-sigma tools and methods can drive significant productivity can drive significant productivity improvements when used intelligently – when improvements when used intelligently – when adapted to a people intensive world. adapted to a people intensive world. People are People are not machines!not machines!

1. Demand/Inquiry Generation Process Process

A variety of marketing communication tactics are A variety of marketing communication tactics are deployed to drive responses from a targeted audience.deployed to drive responses from a targeted audience.

Most common tactics include:Most common tactics include:

Advertising – all mediaAdvertising – all mediaWeb based – all formsWeb based – all formsDirect mailDirect mailTelemarketingTelemarketingTrade showsTrade shows

Traditional Measures Cost per thousandCost per thousand

A measure to know so that different media within A measure to know so that different media within the same tactic (e.g. advertising) can be compared.the same tactic (e.g. advertising) can be compared.

CPM is not a number to be reduced – just know it CPM is not a number to be reduced – just know it Response rateResponse rate

The percentage of inquiries received and is mostly The percentage of inquiries received and is mostly driven by the “offer” – there are 3 basic types of driven by the “offer” – there are 3 basic types of offersoffers

Cost per inquiryCost per inquiry The cost per response of each mediaThe cost per response of each media

Number of leads per 100 inquiries

(a typical ratio)Hard or Hard or closing offerclosing offer

10-2010-20 20-3020-30 30-5030-50 50-7050-70

Information Information of value offerof value offer

5-105-10 10-1510-15 15-2515-25 25-4025-40

Soft offerSoft offer““free”free”

3-53-5 5-105-10 10-2010-20 10-2510-25

For More For More InformationInformation

1-21-2 2-32-3 3-53-5 5-105-10

Offer acceptedOffer acceptedOutboundOutbound mediamedia

PRPRAdv.Adv.

Mail Mail or or

emailemail

Trade Trade ShowShow

Tele-Tele-marketingmarketing

Process Process A variety of marketing communication tactics are A variety of marketing communication tactics are

deployed to drive responses from a targeted deployed to drive responses from a targeted audience. audience.

Most common tactics include:Most common tactics include:Advertising – all mediaAdvertising – all mediaWeb based – all formsWeb based – all formsDirect mailDirect mailTelemarketingTelemarketingTrade showsTrade shows

Demand generation 66

Process mapped?Standards linked to VOC?Clear ownership?Actionable metrics?Frequent reporting?Stakeholders / allies linked?Sigma level?

Measurements by tactic?Measurements by audience?Variation declining?Trends tracked? reported?Confidence in data?Ratios / rankings / ratings?

2. Response Handling

ProcessProcess The fulfillment to the request or offer made The fulfillment to the request or offer made

in the initial marketing communicationsin the initial marketing communications MeasuresMeasures

Speed of responseSpeed of response Accuracy of responseAccuracy of response

Inquiry/Response Handling Frequently, this step is viewed as just a fulfillment Frequently, this step is viewed as just a fulfillment

process or cost and not importantprocess or cost and not important

Therefore, it’s often done poorly – 2002 studyTherefore, it’s often done poorly – 2002 study 60.7% of all B2B inquiries went unanswered60.7% of all B2B inquiries went unanswered Average of 10 days to respondAverage of 10 days to respond

If designed properly the response process “sets up” the If designed properly the response process “sets up” the ability to improve the entire lead systemability to improve the entire lead system Points you in the right direction at the startPoints you in the right direction at the start Tells the prospect that you’re “good”Tells the prospect that you’re “good”

Discriminate Between Inquiries Develop a profile or “sweet spot” of the best potential Develop a profile or “sweet spot” of the best potential

leadsleads Industry code – SIC or NAICSIndustry code – SIC or NAICS Size of company – employee size/revenueSize of company – employee size/revenue The profile can be drawn from a customer profiling The profile can be drawn from a customer profiling

process – frequently not doneprocess – frequently not done

Match the inquiries to one of the large public Match the inquiries to one of the large public databases, enhance with these two data points to databases, enhance with these two data points to determine if they hit the “sweet spot” determine if they hit the “sweet spot”

Frequently, this step is viewed as Frequently, this step is viewed as just a fulfillment process or cost and not or cost and not importantimportant


If designed properly the response process “sets up” the ability to improve If designed properly the response process “sets up” the ability to improve the entire lead systemthe entire lead system Points you in the right direction at the startPoints you in the right direction at the start Tells the prospect that you’re “good”Tells the prospect that you’re “good”

Response Handling6 6

I wonder how they treat

orders?

Where shall

we start?

Say what?Say what?

Frequently, this step is viewed as Frequently, this step is viewed as just a fulfillment process or cost and not or cost and not importantimportant


If designed properly the response process “sets up” the ability to improve the If designed properly the response process “sets up” the ability to improve the entire lead systementire lead system

Points you in the right direction at the startPoints you in the right direction at the start Tells the prospect that you’re “good”Tells the prospect that you’re “good”

Response Handling6 6

Deman

dRes

pons

e

Process mapped?

Standards tied to VOC?

Clear ownership?

Actionable metrics?

Frequent reporting?

Stakeholders / allies linked?

Control plan current?

Sigma level?

3. Lead Qualification ProcessProcess

The qualification of the inquiry to see if it meets the The qualification of the inquiry to see if it meets the pre-set criteria of a sales lead.pre-set criteria of a sales lead.

MeasuresMeasures The number of leads qualified per inquires receivedThe number of leads qualified per inquires received

Leads ready for salesLeads ready for salesLeads that need developmentLeads that need developmentInquiries that are not qualified – mailing listInquiries that are not qualified – mailing listInquiries that are not “on-target” - discardInquiries that are not “on-target” - discard

The scoring of the lead against the qualification criteriaThe scoring of the lead against the qualification criteria

How can this be used? Allows for the discrimination of resources to follow up Allows for the discrimination of resources to follow up

inquiries – do not chase all inquiries the same, as they inquiries – do not chase all inquiries the same, as they are not all equalare not all equal

The goal of the first process is to separate the inquiries The goal of the first process is to separate the inquiries into one of the following categoriesinto one of the following categories

Average breakdown for every 100 inquiriesAverage breakdown for every 100 inquiries Leads todayLeads today 10 - 1510 - 15 Leads tomorrowLeads tomorrow 20 - 4020 - 40 Not qualifiedNot qualified 20 – 3020 – 30 Not interestedNot interested 30 - 4030 - 40 Other (competition)Other (competition) 20 - 3020 - 30

Common Criteria Qualified leadQualified lead

Need/problemNeed/problem that the product or service fits and/or solves that the product or service fits and/or solves Budget/capacityBudget/capacity to purchase (could depend on profile of best to purchase (could depend on profile of best

lead)lead) Authority level/involvementAuthority level/involvement of the contact(s) needed for a of the contact(s) needed for a

purchasepurchase

Sales opportunitySales opportunity TimingTiming of the purchase that aligns with the sales staff’s of the purchase that aligns with the sales staff’s

window, plus the contact’s desire to move forward in their window, plus the contact’s desire to move forward in their buying processbuying process

Lead Qualification What defines a lead for your company?What defines a lead for your company?

Do not ever call inquiries leads!Do not ever call inquiries leads!

The terms that must be defined and agreed to by all The terms that must be defined and agreed to by all concerned – specifically salesconcerned – specifically sales Inquiry Inquiry Qualified leadQualified lead Sales opportunitySales opportunity

Sales people are already jaded – they will say “most leads Sales people are already jaded – they will say “most leads

are crappy!” or “not worth the paper they are written upon”are crappy!” or “not worth the paper they are written upon”

Lead Accelerators If the inquiry arrives by mail or phone be sure to If the inquiry arrives by mail or phone be sure to

respond within 24-48 hoursrespond within 24-48 hours If possible, notify the inquirer by phone or email that If possible, notify the inquirer by phone or email that

the response is on the waythe response is on the way

If the inquiry arrives by e-mail respond in less than 4 If the inquiry arrives by e-mail respond in less than 4 hours or it will negatively effect brand image!hours or it will negatively effect brand image!

Always give the inquirer a reason to respond again and Always give the inquirer a reason to respond again and an individual to respond to (not the sales person)an individual to respond to (not the sales person)

pre-set criteria of a sales leadpre-set criteria of a sales lead MeasuresMeasures scoring of the lead against the qualification criteriascoring of the lead against the qualification criteria not chase all inquiries the same, as they are not all equalnot chase all inquiries the same, as they are not all equal separate the inquiries by categoriesseparate the inquiries by categories Decision criteria – agree on definitions, weightings, etc. ahead of time – argue Decision criteria – agree on definitions, weightings, etc. ahead of time – argue

about the criteria and process, not the output of the tool.about the criteria and process, not the output of the tool. The terms that must be defined and agreed to by all concerned – specifically The terms that must be defined and agreed to by all concerned – specifically

salessales Inquiry Inquiry Qualified leadQualified lead Sales opportunitySales opportunity

Lead AcceleratorsLead Accelerators

Lead Qualification6 6

Some key words & phrases mentioned.

pre-set criteria of a sales leadpre-set criteria of a sales lead MeasuresMeasures scoring of the lead against the qualification criteriascoring of the lead against the qualification criteria not chase all inquiries the same, as they are not all equalnot chase all inquiries the same, as they are not all equal separate the inquiries by categoriesseparate the inquiries by categories

Lead Qualification6 6

Decision Criteria Matrix

Budge

tAut

horit

yNee

d Tim

ingSize Ind

ustryQualification

Criteria9 10 9 7 9 10

Inquiry 1 6 9 3 6 9 1 304Inquiry 2 9 1 9 9 9 6 376Inquiry 3 3 9 9 6 1 6 309Inquiry 4 1 9 9 6 9 3 333Inquiry 5 9 9 6 9 9 1 379

Inquiry nth

Qualification Criteria

Agree on definitions & weightingsAgree on definitions & weightingsArgue about criteria and process, Argue about criteria and process, not about the output of the toolnot about the output of the tool

4. Lead Development

ProcessProcess A continual process that “works” the lead A continual process that “works” the lead

until it reaches the pre-set qualification until it reaches the pre-set qualification criteria for a sales leadcriteria for a sales lead

MeasuresMeasures The number of leads developedThe number of leads developed The cost of the each “developed” leadThe cost of the each “developed” lead

Lead Development/Nurturing Two studies by Penton and Reed Business (Cahners) Two studies by Penton and Reed Business (Cahners)

have shown that from 30-50% of all B2B inquiries have shown that from 30-50% of all B2B inquiries bought the product or service they inquired about bought the product or service they inquired about within an 18-24 month period from time of inquiry.within an 18-24 month period from time of inquiry.

What is your conversion rate?What is your conversion rate? The best seen is about 10% of inquiries to sales, and that The best seen is about 10% of inquiries to sales, and that

was in a demand generation program that started with a very was in a demand generation program that started with a very “hard offer”.“hard offer”.

Reasons for Low Conversion No lead process in place – inquiry distribution is not a No lead process in place – inquiry distribution is not a

lead processlead process

Lead qualification is not rigorous enough to separate Lead qualification is not rigorous enough to separate lower level or warm leads from “hot leads” or real lower level or warm leads from “hot leads” or real sales opportunities – only sales opportunities should sales opportunities – only sales opportunities should be sent to sales. They will not act or discard the rest.be sent to sales. They will not act or discard the rest.

Even if a lead is “qualified” on the score card, but Even if a lead is “qualified” on the score card, but lacks the “timing” criteria, sales will not likely follow lacks the “timing” criteria, sales will not likely follow up with dedication and convert it.up with dedication and convert it.

A Sales Perspective As a planning assumption, all sales people have been As a planning assumption, all sales people have been

involved in “lead” systems where they have gotten involved in “lead” systems where they have gotten unqualified leads – they are already highly skeptical and unqualified leads – they are already highly skeptical and need proof to change their perception and behavior!need proof to change their perception and behavior!

Any lead system must align with the sales compensation Any lead system must align with the sales compensation system.system.

On average sales people will use 10% of their time on On average sales people will use 10% of their time on leads – unforced and without any incentiveleads – unforced and without any incentive At 3 calls per day this works out to 60 lead calls per year or 5 per At 3 calls per day this works out to 60 lead calls per year or 5 per

month or about 1 per week!month or about 1 per week!

Lead Development First, be sure that a common and accepted definition First, be sure that a common and accepted definition

exists between marketing and sales on what is a “sales exists between marketing and sales on what is a “sales opportunity”.opportunity”.

Once this definition has been reached, only pass “sales Once this definition has been reached, only pass “sales opportunities” to sales. Feedback systems will opportunities” to sales. Feedback systems will automatically improve if this is done.automatically improve if this is done.

Do not keep secret or hide from view those inquiries Do not keep secret or hide from view those inquiries that have not been qualified and/or the leads that are that have not been qualified and/or the leads that are still being worked on by marketing.still being worked on by marketing.

Lead Development Depending on the lead qualification criteria, those Depending on the lead qualification criteria, those

leads remaining to be “developed” do not meet the “cut leads remaining to be “developed” do not meet the “cut level” in one or more of the criteria.level” in one or more of the criteria.

Quick review of BANT – Note: these classic lead Quick review of BANT – Note: these classic lead criteria are not necessarily in the order of when the criteria are not necessarily in the order of when the criteria can be assessed or is known by buyer.criteria can be assessed or is known by buyer. BudgetBudget AuthorityAuthority NeedNeed Timing*Timing*

Lead Development The job of marketing is to stay with the lead until it is The job of marketing is to stay with the lead until it is

a sales opportunity, and either move it along or know a sales opportunity, and either move it along or know when the “lead” is now a sales opportunity.when the “lead” is now a sales opportunity. The buyer may move at their own pace and in this The buyer may move at their own pace and in this

case you just need to be aware of when they are case you just need to be aware of when they are ready for a sales effort/call.ready for a sales effort/call.

This requires a dedicated and, at times, a complex This requires a dedicated and, at times, a complex process that is worthy of a dedicated staff/assigned process that is worthy of a dedicated staff/assigned responsibility and budget.responsibility and budget.

30-50% of all B2B inquiries bought the product or service they inquired 30-50% of all B2B inquiries bought the product or service they inquired about within an 18-24 month period from time of inquiry.about within an 18-24 month period from time of inquiry.

A continual process that “works” the lead until it reaches the pre-set A continual process that “works” the lead until it reaches the pre-set qualification criteria for a sales lead – qualification criteria for a sales lead – gets to the outcome?

conversion rate?conversion rate? The best I’ve seen is about 10% of inquiries separate the inquiries by The best I’ve seen is about 10% of inquiries separate the inquiries by

categories categories Let’s hope that rate is considered “defective” Lead qualification is not rigorous enough Lead qualification is not rigorous enough Discipline is always a challenge!Discipline is always a challenge! lead system lead system must align with the sales compensation systemmust align with the sales compensation system common and accepted common and accepted definition existsdefinition exists between marketing and sales on between marketing and sales on

what is a “sales opportunity what is a “sales opportunity marketing is to stay with the lead until it is a sales opportunitymarketing is to stay with the lead until it is a sales opportunity

Lead Development6 6 More key words &

phrases mentioned.

30-50% of all B2B inquiries bought the product or service they inquired 30-50% of all B2B inquiries bought the product or service they inquired about within an 18-24 month period from time of inquiry.about within an 18-24 month period from time of inquiry.

A continual process that “works” the lead until it reaches the pre-set A continual process that “works” the lead until it reaches the pre-set qualification criteria for a sales leadqualification criteria for a sales lead

conversion rate?conversion rate? The best I’ve seen is about 10% of inquiries separate the inquiries by The best I’ve seen is about 10% of inquiries separate the inquiries by

categoriescategories Lead qualification is not rigorous enoughLead qualification is not rigorous enough lead system must align with the sales compensation systemlead system must align with the sales compensation system common and accepted definition exists between marketing and sales on common and accepted definition exists between marketing and sales on

what is a “sales opportunity what is a “sales opportunity marketing is to stay with the lead until it is a sales opportunitymarketing is to stay with the lead until it is a sales opportunity

Lead Development6 6

Some Sigma truths that apply:1. Process mind-set is vital to achieving “break-through” results from

problem-solving efforts

2. Process discipline (rigor) is paramount to process outcomes meeting expectations. CHANGE MGT. plans can not be ignored or shorted.

3. Processes are not usually independent of the impact of other processes – look for interfaces and linkages – complete the total picture! Usually a process input is someone else’s process output– beware of losses in the “white space” between processes or procedural steps.

4. Who is the owner of the process? Who cares most about the output?

Lead Development6 6

Dem

and

Resp

onse

Qualif

icatio

nDe

velo

pmen

t

Process mapped?


Clear ownership?

Actionable metrics?

Frequent reporting?



Sigma level?

5. Hand-off to Sales

ProcessProcess Distributing the lead/sales opportunity to the sales Distributing the lead/sales opportunity to the sales

force or distributor networkforce or distributor network MeasuresMeasures

Number of sales opportunities actively Number of sales opportunities actively engaged/accepted by salesengaged/accepted by sales

Number of days taken to engageNumber of days taken to engage Prospect satisfaction with follow-up promisedProspect satisfaction with follow-up promised

Hand-off to Sales6 6

ProcessProcess• Distributing the lead/sales opportunity to the sales Distributing the lead/sales opportunity to the sales force force or distributor networkor distributor network

MeasuresMeasures• Number of sales opportunities actively engaged or Number of sales opportunities actively engaged or

accepted by salesaccepted by sales• Number of days taken to engage Number of days taken to engage • Even though they may want more leads, the Even though they may want more leads, the

actual capacity and desire is less than representedactual capacity and desire is less than represented

More key words & phrases mentioned.


ProcessProcess• Distributing the lead/sales opportunity to the sales Distributing the lead/sales opportunity to the sales force force or distributor networkor distributor network

MeasuresMeasures• Number of sales opportunities actively engaged or Number of sales opportunities actively engaged or

accepted by sales accepted by sales Key metric?Key metric?• Number of days taken to engage Number of days taken to engage Another key Another key metric? metric? How do you measure it? When? How do you measure it? When? Where? Who?Where? Who?• Even though they may want more leads, the Even though they may want more leads, the

actual capacity and desire is less than representedactual capacity and desire is less than represented

Classic challenge of processes and hand-off points.

Root cause?Why? Why? Why? Why? Why?


Dem

and

Resp

onse

Qual

ifica

tion

Deve

lopm

ent

Hand

-off

Process mapped?


Clear ownership?

Actionable metrics?

Frequent reporting?



Sigma level?

6. Sales Conversion & Feedback ProcessProcess

Sales calls/effort to convert the opportunity to a Sales calls/effort to convert the opportunity to a customercustomer

Providing feedback to marketing on the result Providing feedback to marketing on the result achievedachieved

MeasureMeasure Speed and completeness of feedbackSpeed and completeness of feedback Revenue obtained – sale, yearly, LTVRevenue obtained – sale, yearly, LTV Cost of the saleCost of the sale

Obtaining Feedback From Sales Most comments from marketing people are as follows:Most comments from marketing people are as follows:

““We sent leads to sales and they disappeared into a We sent leads to sales and they disappeared into a black holeblack hole!”!”

Why is this the case?Why is this the case? It almost always revolves around the issue that sales people It almost always revolves around the issue that sales people

do not see their benefit for providing feedback to marketing do not see their benefit for providing feedback to marketing – no matter how easy the Internet or CRM systems have – no matter how easy the Internet or CRM systems have made itmade it

Also, feedback systems can be perceived as “big brother”Also, feedback systems can be perceived as “big brother”

Some Benefits to Sales Improving the lead processImproving the lead process

Better campaign targeting and executionBetter campaign targeting and execution Improved qualification processImproved qualification process Higher quality leads = more salesHigher quality leads = more sales More sales = higher compensationMore sales = higher compensation

An improved lead process eliminates calls that are of An improved lead process eliminates calls that are of low value and interest to saleslow value and interest to sales

Reducing the cost of the lead process and/or increasing Reducing the cost of the lead process and/or increasing the ROI allows marketing to budget for other important the ROI allows marketing to budget for other important sales related activitiessales related activities

What is Feedback? Must balance between too little and too muchMust balance between too little and too much

What are the key facts that are needed to improve What are the key facts that are needed to improve the lead process?the lead process?

Targeting question – company and peopleTargeting question – company and people Offer acceptance and applicabilityOffer acceptance and applicability Stage of the buying processStage of the buying process Sales revenue obtained and future potentialSales revenue obtained and future potential Input section – ideas from salesInput section – ideas from sales

Allow for sales to “hand-back” a lead for more Allow for sales to “hand-back” a lead for more development without penaltydevelopment without penalty

Process to Follow with Sales First, involve them in the setting of the lead First, involve them in the setting of the lead

qualification and sales opportunity development qualification and sales opportunity development process – involvement equals buy-inprocess – involvement equals buy-in

Find the benefits that resonate with them – do not Find the benefits that resonate with them – do not stress how important it is to marketing unless the stress how important it is to marketing unless the benefits to sales have been first establishedbenefits to sales have been first established

Let them know how much a lead costsLet them know how much a lead costs

Allow visibility to all the inquiries and leads – don’t Allow visibility to all the inquiries and leads – don’t hide anything from saleshide anything from sales

Second Level Techniques RecognitionRecognition

Internally recognize those who are doing a good job on Internally recognize those who are doing a good job on feedbackfeedback

Do not publicly “dog-house” those sales people who do Do not publicly “dog-house” those sales people who do not provide feedbacknot provide feedback

Share sales success stories – show what feedback has done Share sales success stories – show what feedback has done for the lead process and other sales peoplefor the lead process and other sales people

RewardReward Contests/rewards work to initiate a feedback program, but Contests/rewards work to initiate a feedback program, but

are not a long-term solutionare not a long-term solution

Distributors/Business Partners Feedback is much more difficultFeedback is much more difficult

Use the same process of involvementUse the same process of involvement They view the prospect/customer as theirs and not yours – They view the prospect/customer as theirs and not yours –

are they right? are they right? Many OEM’s have misused feedbackMany OEM’s have misused feedback

Third party data centers may be a option, but keep Third party data centers may be a option, but keep control of the original data on the leadcontrol of the original data on the lead

Legal issuesLegal issues The teeth to enforce feedback systems should be in the The teeth to enforce feedback systems should be in the

“primary area of responsibility” section of the agreements“primary area of responsibility” section of the agreements

Conversion & Feedback6 6

ProcessProcess Sales calls/effort to convert the opportunity to a customerSales calls/effort to convert the opportunity to a customer Providing feedback to marketing on the result Providing feedback to marketing on the result Sounds like the final steps Sounds like the final steps

of a process map.of a process map. MeasuresMeasures

Speed and completeness of feedback Speed and completeness of feedback Standards & Metrics & reportingStandards & Metrics & reporting Cost of the sale Cost of the sale Measure, report, track AND then analyzeMeasure, report, track AND then analyze How many sales opportunities should be handed off to sales people at How many sales opportunities should be handed off to sales people at

any one time? any one time? Standards for flow rates and what will fit through Standards for flow rates and what will fit through the the smallest point of constraint.smallest point of constraint. sales people do not see their benefit for providing feedback to sales people do not see their benefit for providing feedback to marketingmarketing

Every change management plan– every control plan has to address Every change management plan– every control plan has to address this. People processes need this like machines need grease, oil & fuel.this. People processes need this like machines need grease, oil & fuel.

ControlsControls Some Benefits to Sales What are the key facts that are needed to improve the lead process?What are the key facts that are needed to improve the lead process?Process to Follow with Sales

More key words & phrases mentioned.


ProcessProcess Sales calls/effort to convert the opportunity to a customerSales calls/effort to convert the opportunity to a customer Providing feedback to marketing on the result Providing feedback to marketing on the result Sounds like the final steps Sounds like the final steps

of a process map.of a process map. MeasuresMeasures

Speed and completeness of feedback Speed and completeness of feedback Standards & Metrics & reportingStandards & Metrics & reporting Cost of the sale Cost of the sale Measure, report, track AND then analyzeMeasure, report, track AND then analyze How many sales opportunities should be handed off to sales people at How many sales opportunities should be handed off to sales people at

any one time? any one time? Standards for flow rates and what will fit through Standards for flow rates and what will fit through the the smallest point of constraint.smallest point of constraint. sales people do not see their benefit for providing feedback to sales people do not see their benefit for providing feedback to marketingmarketing

Every change management plan– every control plan has to address Every change management plan– every control plan has to address this. People processes need this like machines need grease, oil & fuel.this. People processes need this like machines need grease, oil & fuel.

ControlsControls Some Benefits to Sales What are the key facts that are needed to improve the lead process?What are the key facts that are needed to improve the lead process?Process to Follow with Sales

By now we’re repeating the same basic message – disciplined and data-driven breakthrough thinking in areas of business where process mentality has been scarce will yield great results.


Dem

and

Resp

onse

Qual

ifica

tion

Deve

lopm

ent

Hand

-off

Conv

ersi

on

Process mapped?


Clear ownership?

Actionable metrics?

Frequent reporting?



Sigma level?

7. Measure and Adjust Campaigns

ProcessProcess Analysis of the entire lead process and the Analysis of the entire lead process and the

marketing campaign adjustments required to marketing campaign adjustments required to improve resultsimprove results

MeasuresMeasures Return on expense/investment – E/RReturn on expense/investment – E/R

ROI is not really measured but is talked aboutROI is not really measured but is talked about Customer lifetime value createdCustomer lifetime value created

Measurement of the Lead Process

To obtain credibility with management true To obtain credibility with management true results must be measured – not activitiesresults must be measured – not activities

The measurement ladderThe measurement ladder Activity measurementsActivity measurements Value measurementsValue measurements Result measurementsResult measurements

Four Activity Measurements1. Cost per thousand or CPM1. Cost per thousand or CPM

Just know it – don’t try to reduce itJust know it – don’t try to reduce it

2. Response rate2. Response rate A common measure of direct marketing but a “false god”A common measure of direct marketing but a “false god”

3. Cost per inquiry – average $2003. Cost per inquiry – average $200 A fairly good measure to compare the effectiveness of mediaA fairly good measure to compare the effectiveness of media

4. Cost per lead – average $20004. Cost per lead – average $2000 Depends on the strictness of the lead qualification criteria and Depends on the strictness of the lead qualification criteria and

process to qualifyprocess to qualify

Value Per Lead This is a new concept in measurement that attempts to This is a new concept in measurement that attempts to

place a value (not cost) on each leadplace a value (not cost) on each lead

It is a measurement that bridges the gap between activity It is a measurement that bridges the gap between activity and result measurementsand result measurements Average B2B sales cycle is 8 months and management usually Average B2B sales cycle is 8 months and management usually

wants to know campaign results faster than thatwants to know campaign results faster than that

Requires a prior result or assumptions Requires a prior result or assumptions % of leads converted to sale – 20% is average % of leads converted to sale – 20% is average $ value of the sale - yearly or lifetime$ value of the sale - yearly or lifetime

Which Would You Rather Report? Cost per lead of $2,000Cost per lead of $2,000

OROR

Value per lead of $20,000Value per lead of $20,000 Customer value of $100,000 (Year or LTV)Customer value of $100,000 (Year or LTV) Conversion rate of 20% or 20 sales from every 100 Conversion rate of 20% or 20 sales from every 100

leadsleads Total customer value generated is $2,000,000Total customer value generated is $2,000,000 100 leads divided into $2 million = $20,000/lead100 leads divided into $2 million = $20,000/lead

Three Result Measurements1. Breakeven1. Breakeven

How many sales are required to pay for the campaign How many sales are required to pay for the campaign expense is the “breakeven”expense is the “breakeven”

Benchmarks the campaign cost before execution and Benchmarks the campaign cost before execution and provides insight into the appropriate budget levelprovides insight into the appropriate budget level

Requires a definition and agreement on what is the Requires a definition and agreement on what is the margin of the salemargin of the sale

Gross margin - usually around 50%Gross margin - usually around 50% Net margin – 10-20%Net margin – 10-20%

Three Result Measurements

2. 2. Expense to Revenue or E/RExpense to Revenue or E/R Is a place holder for ROI, as this is almost never Is a place holder for ROI, as this is almost never

truly measured properly in accounting termstruly measured properly in accounting terms

Measures the ratio of the total campaign expense Measures the ratio of the total campaign expense to the total gross revenue achieved to the total gross revenue achieved

1/10 is a minimum1/10 is a minimum 1/20 is good1/20 is good

Three Result Measurements3. Lifetime value of the customer3. Lifetime value of the customer

Should be measured in margin dollarsShould be measured in margin dollars

Is usually a large number and can be very helpful in B2B, Is usually a large number and can be very helpful in B2B, but is not often calculatedbut is not often calculated

How long is a lifetime? (three years)How long is a lifetime? (three years)

Needs to include all on-going sales and service costsNeeds to include all on-going sales and service costs

Recommend Fredrick Reichheld’s book on Recommend Fredrick Reichheld’s book on The Loyalty The Loyalty EffectEffect

Justifies spending more money to keep customersJustifies spending more money to keep customers


Right metrics?Represent VOC adequately?Available, accessible, reported?Management will use?Change will result?Sustainable?

What about process metrics?

General Summary6 6

Demand Response Qualify Develop Hand-off Convert +

Measure

Process mapped?


Clear ownership?

Actionable metrics?

Frequent reporting?



Sigma level?

Remember Big picture Watch the “white” spaceData for decisions.Discipline of processSustain the gains!

Summary from 1 Sales BB Take time – define the defect well.Take time – define the defect well. Data is scarceData is scarce Processes are usually ill-definedProcesses are usually ill-defined Process ownership is a fleeting conceptProcess ownership is a fleeting concept Process standards and CTQ’s not specific Process standards and CTQ’s not specific Process metrics may not be linked to process outputsProcess metrics may not be linked to process outputs Stakeholder expectations vary greatlyStakeholder expectations vary greatly Root causes can be elusiveRoot causes can be elusive Humans are not machines = Change mgt. is tough!Humans are not machines = Change mgt. is tough!

Applying Six Sigma

The purpose of The purpose of 6 6 is to is to a c c e l e r a t ea c c e l e r a t e implementation of implementation of business strategies.business strategies.

Applying Six Sigma

Our purpose today is to Our purpose today is to a c c e l e r a t ea c c e l e r a t e adoption of adoption of 6 6 as key as key to aligning lead to aligning lead processes with business processes with business strategies.strategies.

Applying Six Sigma

Think Think about it!about it!

Documents

Lead Process + Six Sigma = Increase in marketing Productivity