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Demand generation business case blueprint
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"Half the money I spend on advertising is wasted, the trouble is I don't know which half."
John Wanamaker, 1838 - 1922
Executive Summary
• The B2B Buyer has changed: need to pro-actively engage around educational topics
• Sales & Marketing need to be aligned more closely, creating a seamless buying process
• Lead management provides a dramatic ROI: many benefits, low risk, modest investment
• After right implementation there is an opportunity to turn marketing into a revenue driver rather than a cost center.
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“Nurtured leads produce, on average, a 20 percent increase in sales opportunities versus leads that are not nurtured.”
Current situation The Changing B2B Buyer
• Buyers are seeking and finding more information on their own—they’re in control
• Search engines and vendor Web sites are top information sources in the buying process
• To drive revenue, marketers must become more adept at identifying sales-ready leads and nurturing the remainder
• Vendors need to interact with prospects before the sales conversation, by providing relevant information that is relevant in the earlier stages of the buying process
Highlights from Enquiro’s BuyerSphere Project:
• Almost 50% of B2B buyers starts their buying process with online research
• Talking to vendors of often only the 4th step
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Order of Things – High Consideration
50%
37.5%
25%
12.5%
0% 1st 2nd 3rd 4th 5th
Online Research Talk to Users Talk to Vendors
The B2B lead development gap • Lead Nurturing, Lead Scoring, Lead Routing and Lead Monitoring
close the gap in the middle of the funnel
• Improve the dynamics of your revenue cycle to convert more potential customers into customers
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Current marketing focus Current sales focus The B2B lead Development gap
Issue 1: Marketing hands off Leads too early. Unqualified
Leads waste sales’ time.
Issue 2: Sales cherry picks leads, letting longer-time-frame leads leak out. Issue 3: Marketing spends
More to recapture lost leads.
Reach Interest Desire Convert Enrich Retain
Warm leads leak out
Lead Management Closes the Gap in The Middle of the Funnel
Source: October 2006, Best Practices “Improving B2B Lead Management”
Current situation
Current situation B2B CMO & CSO pain points
• An average B2B organization experiences a 3.9 percent conversion rate between inquiries and marketing qualified leads.
• 61% of B2B marketers send all leads directly to Sales; however, only 27% of those leads will be qualified. (Source: MarketingSherpa).
• 50% of leads are qualified but not yet ready to buy. (Source: Gleanster Research).
• 63% CMO expect that ROI will become main marketing effectives indicator but only 44% of them think that they are read for it. (Source: IBM CMO 2011 Study)
Current lead program
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Future lead program
Existing sales & marketing infrastructure limitations
• CRM systems see only very limited part of customer behavior.
• ERP systems see only historical and customers data.
• Company webpage internal owner is blind because prospects visits are not recognized and tracked.
• E-mail marketing platforms don’t see real customer engagement and e-mails are not delivered in right time with right content.
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“Companies that excel at lead nurturing are able to generate 50% more sales-ready leads at 33% lower cost per lead.”
Demand generation tools
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• Sales and marketing alignment • Customer personas • Lead scoring • Lead nurturing
• Lead recycling • Marketing automation • Pipeline generation, revenue funnel • Content marketing • B2B Social media marketing
Business case assumptions.
• Average sales (or Customer Lifetime Value): 110 000 zl, lead acquisition cost 1000 zl, margin 30%.
• Conversion rate between inquiries (prospects) and marketing qualified leads (MQL): average 3.9 strong processes 5.8 best practice 10.*
• Conversion rate between MQL and sales accepted lead (SAL): average 58 strong processes 66 best practice 75.*
• Conversion rate between SALs and sales qualified leads (SQLs): average 49 strong processes 56 best practice 61.*
• Conversion rate between SQL and closed business: average 23 strong processes 27 best practice 31.*
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“Companies that excel at lead nurturing are able to generate 50% more sales-ready leads at 33% lower cost per lead.”
* SiriousDecisions Field Marketing 2.0: The Heart of Growing Conversion Rates, 2008
Demand generation and marketing automation facts not considered as
business case assumptions.
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• Companies that excel at lead nurturing are able to generate 50% more sales-ready leads at 33% lower cost per lead.
(Source: Forrester) • Nurtured leads make 47% larger purchases than non-
nurtured leads. (Source: The Annuitas Group) • Companies that automate lead management see a 10%
or greater increase in revenue in 6-9 months. (Source: Gartner Research)
Real demand generation and marketing automation outcomes not considered as
business case assumptions.
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McAfee (Intel company) 35% number of leads reduction with four-fold lead to opportunity conversion rate increase. PerkinElmer (healthcare) conversion rates have increased 99% over a 6 month period. Hear and Play Music (music lessons) 416% increase in customer lifetime value. Opsview (software company) bookings in the form of revenue have increased 178% since marketing automation was implemented. Arrow S3 (telecommunication) Marketing funnel doubled in size, increase of 28% in closed-won opportunities, opportunities increased 47%.
Prospect acquisition
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Marketing channels Prospects Conversion rate
Prospects to MQL
Costs Cost per prospect Velocity
Website inbound 2 000 12% 10 000 5 18
Online Ad 1 500 5% 50 000 33 30
Trade Show 300 2% 40 000 133 42
Webinar 600 3% 5 000 8 32
Partner 400 10% 20 000 50 50
Sponsorship 200 2% 30 000 150 54
Organic – Google 2000 3% 0 0 32
SEO / CEM 2500 5% 45 000 18 39
Not Available 500 1% 0 0 76
TOTAL 10 000 200000
Communication campaign cost: 200 000 zl Total prospect acquisition: 10 000
Revenue funnel
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business case scenario
Marketing Average After implementation Best Practise
No of prospects (inquires) 10 000 10 000 10 000
Conversion rates
Prospects vs. MQL 3,9% 5,8% 10,0%
No MQLs 390 580 1000
MQL vs. SAL 58% 66% 75%
No SAL 226 383 750
Sales
Conversion rates
SAL to SQL 49% 56% 61%
No SQL 111 214 458
SQL to Wins 23,0% 27,0% 31,0%
No Customers 25 57 141
Customer Lifetime Value 110 000 110 000 110 000
Total revenue 2 750 000 6 270 000 15 510 000
Costs & ROI calculation
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Marketing costs Average After implementation Best Practise
Prospects acquisition 200 000 200 000 200 000
Department costs allocation 50 000 50 000 50 000
Software and IT costs 0 15 000 15 000
Campaign implementation 0 25 000 25 000
Total marketing costs 250 000 290 000 290 000
Sales costs
Per lead acquisition cost 1 000 1 000 1 000
Total lead costs 25 000 57 000 141 000
Department costs allocation 150 000 150 000 150 000
Total sales costs 175 000 207 000 291 000
Total costs 425 000 497 000 581 000
ROI calculation Average After implementation Best Practise
Total revenue 2 750 000 6 270 000 15 510 000
Revenue margin 30% 30% 30%
Profit 825 000 1 881 000 4 653 000
Campaign costs 425 000 497 000 581 000
Total profit 400 000 1 384 000 4 072 000
ROI -6% 178% 601%
Market
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19% of B2B organizations are planning to implement marketing automation and another 17% are expanding their usage.
Adoption of these tools will expand beyond technology companies . 20% of manufacturers, 20% of financial services firms, and 18% of business and professional services firms plan to implement marketing automation.
19%
17%
New implementations
Expanding usage
20%
20%
18%
manufacturers
financial services firms
business and professionalservices
According to Forrester Q4 2011 B2B Marketing Organizations And Investments Survey:
Ekspert ds. projektów generowania popytu, automatyzacji marketing oraz zarządzania przychodami. Od 1998 doradza firmom w zakresie komercyjnego wykorzystania internetu. Posiada doświadczenie z wielu branż, firm różnej wielkości oraz rynków B2B i B2C, w tym jako szef marketingu w UPS Polska, Zastępca kierownika działu marketingu w T-Mobile (Era). Prowadził również interaktywną agencję reklamową oraz marketing portalu Onet.pl. Śledź go na Twitterze @Ment_adventure
Grzegorz Urban
E-mail: [email protected] Mobile: +48690024400
The Value of Lead Nurturing
Lead Nurturing helps turn more inquiries into qualified leads and decreases cost per qualified lead
Conversion: Inquiry to Qualified Lead
Cost per Inquiry
Cost per Qualified Lead
Without Nurturing
27% $50 $185
With Nurturing
40% $50 $125
Source: actual data from software vendor
50% increase
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