What is a Marketing Campaign’s “Influence” on Deals?

How do you apportion marketing effort to sales results?

How do you apportion marketing effort to sales results?

I remember my first one-on-one meeting with the head of major account sales at Xerox.  For a bit of perspective, this gentleman ran the team responsible for over a billion dollars in document outsourcing services revenue.  I presented a carefully prepared summary of the industry marketing team results from the current year and plans for the next period. Included in this review was my analysis of the number and types of deals influenced by industry marketing activity and the size of the pipeline resulting.

Upon seeing those figures, he turned to me and said:

I would be careful about showing numbers like those around.  It’s easy for people to question the impact marketing has on sales.”

Like it or not, this attitude prevails within many enterprise sales organizations. It presents both a challenge and opportunity B2B marketers face at large companies like Xerox and small ones as well — how do you demonstrate the impact of marketing activity on the health of the sales pipeline?

Every sales opportunity or closed deal should have at least one marketing campaign, program, or activity associated with it.  If not, your company is missing an opportunity to drive the cost of sales down. Why?  Because business buyers get most of the information about products and services they might want to buy from sources other than the direct sales force.

When the Corporate Executive Board (CEB) published key research showing that buyers have completed 57% of the purchase process BEFORE they call a supplier, they quantified something we know intuitively — B2B purchasers use the Web, peers, colleagues, online recommendations, and so on to determine needs and buying criteria. They call in the vendors when it’s time to compete on price.

How do you impact that part of the purchase process that represents almost 60% of the time your reps aren’t in touch with the buyer? With marketing.

Source: Corporate Executive Board

Source: Corporate Executive Board

Communications, messages, and content that you send to prospects — or that they find when researching issues online — affect the purchase process.  Prospects and clients see this information, and may pay attention to it long enough to shape buying decisions. The difficulty is how to measure this impact and allocate the influence of marketing activity appropriately across pipeline and deals. And use this influence information to understand which campaigns played the greatest role in creating an opportunity or closing a deal.

Most marketing automation gives CMOs and their staff the false impression that they can use technology to figure this out easily.  However, most tools can’t factor in subjective criteria — like what to measure and how to determine the impact of any particular element on buying — that affect the equation.  Frequently marketers give all the influence credit to either the first or last touch before the deal closes, but this doesn’t help to understand which activities help to move opportunities from stage to stage or play a significant role in the overall process.

Luckily, I think the good folks at FullCircleCRM are on the hunt for a solution to this problem.  Take a break and listen as Andrea Wildt, VP of Products and Marketing, and I talk about the need to allocate influence, why it is difficult to do and the pros/cons of different allocation strategies. I think you will conclude that a weighted allocation works best for those with the analytics and tools to support this analysis.  However, most other B2B marketers should start simple and increase their sophistication as sales becomes more comfortable with talking to marketing about the pipeline and their mutual advantage in making it stronger.

“Moneyball for Marketing”: Why Automation Matters

Source: October 4, 2006, “Improving B2B Lead Management” Forrester report.

Remember this picture?   As a Forrester Research analyst, I published a report called “Improving B2B Lead Management” in October 2006 where this image first saw the light of day. 

Since then, it’s become popular with every marketing automation technology provider who uses to help explain a fundamental problem: how potentially good leads leak out of the demand generation process and how marketers must then spend more time, effort, and money recapturing them and putting these opportunities back in the sales pipeline. Which begs the question, “What am I really getting for my marketing dollar if some portion of the demand generation activity gets wasted?”

A CMO study sponsored by IBM last year found that, by 2015, most marketing departments will measure success using return on investment (ROI) as the primary metric. Most CMOs, however, struggle to demonstrate marketing’s ROI in a reliable way. Why? Because we haven’t instilled measurement discipline in marketing — or the technology, process, and automation to back it up. Since John Wannamaker turned his famous phrase about advertising, marketers have taken the easy way out by assuming much of marketing can’t be measured in a meaningful way.

Moneyball: The Art of Winning an Unfair Game (ISBN 0-393-05765-8) by Michael Lewis (2003)

But is the idea of measuring what matters in marketing that unattainable?  Recently, I joined Bonnie Crater, CEO of Full Circle CRM (a start up firm I advise), in a conversation about why it’s important to plug a leaky demand generation process. Bonnie drew a great analogy to the book Moneyball: The Art of Winning an Unfair Game by Michael Lewis, which details Oakland Athletic general manager, Billy Beane’s focus on an analytical, evidence-based approach to assembling a competitive baseball team, despite Oakland’s disadvantaged revenue situation.

Like putting together a championship sports program, marketing teams must run a broad range of programs from advertising, public relations, and social media campaigns to lead nurturing and customer engagement programs. And they must do all of this with shrinking budgets and resources, against competitors who seemingly always have more (like the New York Yankees who brought in 3X the revenue when compared to the A’s).  Showing how each of these programs contributes to the business requires a way to track every marketing generated response without overstating or distorting the results.

Using a response-based solution to automate this process helps level the playing field by allowing marketers to track, differentiate and report on the ROI of each program — and to connect multiple program touches to the people in the account where opportunities are developing. With response-centric intelligence, marketing executives can better optimize their portfolio and drive demand more efficiently. Automation allows marketers to be more like Billy Beane and the Oakland A’s, where you can use statistics and evidence to figure out which marketing tactics to “draft” and how best to put the lineup together.

Check out Bonnie and my conversation about what it takes to move to response-based marketing and see why marketing automation can help you get there.

Why Doesn’t Marketing Automation Impact the Business?

Photo courtesy of Full Circle CRM and iStock.

Earlier this month, Gartner published its Magic Quadrant for CRM Lead Management.  Naturally, Eloqua and Marketo commanded top spots in the upper right quadrant. But a cluster of really big companies look poised to close in on them from the lower left. So marketing automation – in particular lead management — looks pretty hot. Right?

I’m not so sure.  In this report, I was struck by the second sentence in Gartner’s opening summary, which said:

Impact on revenue generation is high and satisfaction with vendors is generally strong, but organizational alignment issues continue to reduce potential impact.”

Reduce potential impact.  Ouch.  Not good.

But which organizational alignment issues does Gartner mean?  Inside the vendors studied?  No, I think Gartner is referring to organizational issues between sales and marketing

Despite growth in market size, vendor offering sophistication, and customer interest, marketing automation has yet to reach that tipping point where marketing operations (who manages automation tools and directs campaign execution) stands on equal footing to brand, PR, product promotion, collateral development and sponsorships.  Even steadfast marketing automation practitioners still suffer from fundamental concerns about how well their systems pay off – especially when marketing metrics and sales numbers don’t line up. 

I hear many marketing execs ask the following questions, which – to my mind – are symptomatic of deeper problems in the automation world perpetuated by the chronic tension between marketing activity and sales results:

  • Which campaigns actually had the most impact on deals? Which drove the most sales activity and follow up that, in turn, drove more deals?
  • How can I demonstrate Marketing’s contribution and influence on revenue? And show the executive team that money spent in Marketing is more effective at moving the top line than hiring more salespeople?
  • How can we generate more pipeline/opportunity from each campaign?  Where should I invest to do this?
  • Why don’t my reports match what Sales has in its pipeline or forecasts? Why am I always defending Marketing metrics as a result?
  • What really happened to all those leads I generated last year? What percentage went into the pipeline?  Became deals? Are still active? Require more nurturing to re-engage? Why can’t we track sales activity on a per contact basis, instead of opportunity or lead?

These questions, and others like them, speak to the continuing inability to prove and improve Marketing’s contribution to the business.  To use this technology to really get to the facts and levers that move the business — and to stand on equal footing with Sales.

Because of my longstanding interest in demand management - and the people, process and technology issues that arise when marketers undertake automation efforts – I was intrigued when a friend told me about a new business she had started to help answer these questions. As a former CMO in large and small companies, she felt these pains acutely and believes marketing execs need something more to help them understand what’s happening with campaigns, make sure marketing data adds up, drive more revenue, and plan with confidence.

I was also very honored when she asked me to join her company’s advisory board to help her shape its future.  I worked with CEO Bonnie Crater at a company called Stratify (now part of Iron Mountain) in 2000 and 2001, and am pleased to become one of her firm’s advisors.

In future blog posts, I plan to share what I’m learning about marketing automation by working with Bonnie and her company. And shed some light on the best practices that answer the questions that will move automation and operations from the marketing back office into the forefront of the business.

Content That Generates Meaningful Thought Leadership

Talk to anyone about marketing automation, demand management, or lead nurturing and the conversation inevitably turns to content. 

Copyright ITSMA 2011

Most marketing operations folks starting down the automation path talk more about their people, change management, and technology implementation woes. But after they get a couple of campaigns under their belt, the challenges of developing a steady stream of relevant, interesting content surface.

Here’s proof.  In the chart here, ITSMA shows that among services marketing teams surveyed in a 2011 study on lead management maturity, Leaders say content creation is the biggest concern they face.  So what does it take to create great content?  Great ideas.  Good marketers express great ideas through thought leadership. 

I think thought leadership is a fuzzy term. Many think thought leadership has to be truly unique and leading to be worthy of publication.  I like Forrester Research’s definition, from my former colleague Jeff Ernst, because it focuses on outcomes.  Jeff says that thought leadership is:

“The process of formulating big ideas and insightful points of view on the issues your buyers face capturing those ideas in multiple content vehicles and sharing the ideas with prospects and customers to enlighten them, engage them in a dialogue, and position your company as a trusted resource.”

At Xerox, I think we work hard to present insightful points of view on industry and the role of managed print, document, IT and business process services in those industries. I don’t think we are leading edge, but our experiences demonstrate that thought leadership is best crafted around three key ares:  your experts, your customers and your take on vertical industry problems (expressed as views shared with recognized industry experts.) 

If you are in the Denver Colorado area, and you want to find out more, please join me for the Colorado chapter of the BMA Keynote Luncheon on Wednesday, March 14, 2012.  I will post the slides from this presentation on my blog afterwards and share a few of the key comments, if you can’t make it.  I’m sure the folks at the BMA will share as well!

To preview a key lesson learned ahead of time, I want to point to Jeff’s research on thought leadership and say that his framework for upgrading your content to thought leading is very useful. He suggests 10 criteria for evaluating your content through a thought-leading lens, including:

  • Relevant – does your content deal with big issues your buyers face?
  • Provocative — does it challenge conventional thinking?
  • Forward-looking – does it anticipate what’s over the horizon?
  • Distinct – is it different than what your competitors, partners, or industry cohorts are saying?
  • Inspiring – does it energize people around this idea or way of thinking?
  • Actionable – does it provide advice on what to do now?
  • Results-driven – can using your ideas produce breakthrough outcomes or change?
  • Conversational – does your tone encourage dialogue and feedback?
  • Credible – how do you show your company can help others get there?
  • Independent – do you avoid making reference to your products and services?

(Source: Forrester Research, June 7, 2011, “Thought Leadership: The Next Wave Of Differentiation In B2B Marketing”)

Indirectly, many of the points Jeff makes are the same criteria we used in Xerox Document Outsourcing Services to determine which experts to feature, what type of content to develop, and which to feature in our campaigns. So it is a very useful and practical tool for assessing your content’s thought leadership acumen.

What challenges have you faced in developing great content?  I hope you will join in the conversation with the BMA and me next week.

A Revenue Marketer’s Journey

You busy this February 23, at 1 pm ET?  I hope you can spare a few and join me for my first (and hopefully not only) appearance on WRMR – Revenue Marketer Radio.

What is WRMR? 

Debbie Qaqish Host Revenue Marketer Radio

It’s the call letters for a virtual radio station.  Actually, it an online radio show sponsored by friends of mine at the Pedowitz Group – one of the up and coming demand generation agencies that help marketers build lead generation and nurturing programs that convert a larger number of prospects to opportunities and turn more qualified leads into sales pipeline.

I’ve know Jeff Pedowitz for about as long as I’ve been active in the lead management automation field. We met when he ran professional services at Eloqua. His business partner, Debbie Qagish, I’ve come to know since and found her to be one of the most dynamic and outspoken advocates for professionally generating and managing demand as a core marketing function. Together they have built a fast-growing, thriving business and live in the world of demand management daily.

Debbie invited me to join her for a little tête-à-tête on how I came to be a Revenue Marketer.  Or at least how I found myself on the journey to become one. 

And it is a journey.  A long one.

According to Debbie, the journey to Revenue Marketing nirvana begins by recognizing that marketing activity – outreach to prospective clients with educational and informational offers coupled with good inbound visibility and relevant content delivery — helps to speed the sales process along.  Just like with any problem, recognizing that you have one is the first stage.

The second part of the journey she calls Lead Generation where marketers begin to devise programs — and use some type of technology, typically an email service provider or ESP system — to help generate leads and deliver them to sales. Qualified leads, not just those fished out of a bowl at a tradeshow.  In the Lead Generation stage, marketers measure progress in terms like open rates, click through rates, and registrations – simple activities that correlate loosely to buyer interest.

It’s a big jump from Lead Generation to the next phase: Demand Generation.

Marketers in the Demand Generation phase graduate to higher levels of automation and campaign sophistication.  They use marketing automation tools integrated together with a CRM system. (This also implies some rigorous use of the CRM system by sales and sales management for the purpose of managing accounts and tracking pipeline progress. — More on this if you come listen to the show.) They learn to measure marketing impact in terms like Marketing Qualified Leads, lead-to-acceptance rates, and pipeline value generated. In this stage, the marketer can begin to demonstrate a direct impact on revenue without getting laughed out of the room by sales.

The ultimate stage defines the whole process – Revenue Marketing.  In this phase marketing programs, processes and results earn the RPS seal of approval, where RPS stands for Repeatable, Predictable, and Sustainable. (Sounds a lot like the words my buddy Sean Geehan uses in his B2B Executive Handbook. But I digress.)

On Thursday, I’ll share some of my hard-won insights into what it takes to get started on the journey to becoming a revenue marketer at a large, multi-billion dollar enterprise with a highly-recognizable brand and a long history of sales management best practices. I plan to share a bit about my role in industry marketing and how this led to the start of my revenue marketing journey.  How my team and I adopted marketing technology to drive revenue. And what makes Revenue Marketing at a large, global, diverse enterprise — with many long-standing sales traditions — different than RM at smaller, younger firms.

The goal of our talk show segment is to help pave the way on your road to becoming an elite Revenue Marketer and to make your journey smoother — with less bumps and potholes.  If you can’t make this date and time, don’t worry, BlogTalkRadio records the session for you to access on demand.  Check it out when you can.  Or you can download them from iTunes.

(Full disclosure: This post is not an ad for the Pedowitz Group. I am appearing on the show as a favor to Debbie and to boost my personal brand on this topic.  I receive no compensation.  Although she did buy me a drink a couple of times…)

5 B2B Marketing Predictions for 2012

Sourced from http://www.freedigitalphotos.net (see below)

Happy New Year! To kick off 2012, I thought I’d journey back to my industry analyst roots and make a few predictions about the issues most likely to impact B2B marketers during the next 12 months. I can’t say these predications are as well researched as my prior efforts, but – hey! – I don’t get paid to give advice any longer. (Doesn’t stop me from doing it, however.) I based this list of ruminations more on firsthand experience than third-party study and pseudo-science stuff:

1. Marketing automation (MA) interest, purchase, and use will accelerate. Despite claims from the vendors here, the MA market has been slow to develop. As the recession deepened, marketers turned to MA to cut costs and shift expenses from heads to tools. But the automation investment stakes will rise in 2012 as large enterprises move beyond initial trials to tap into the promise of building demand ahead of the sales effort. Sirius Decisions predicts 50% of enterprises will make the jump to MA by 2015 and Annuitas CEO Carlos Hidalgo expects MA purchase intent to double this year. I think the trend is positive, but that growth won’t accelerate dramatically. Experiencing this shift at a big company (Xerox) these past 18 months, I believe that the transition will be slower – and more painful – than these predictions as large enterprises in particular come to grips with the talent, process, and content issues (not the technology) that keep marketing automation on the B2B backburner.

2. Market program focus will shift from building brand and consideration to sales enablement. Marketing and sales cannot survive independently from each other, but only a minority of executives will address this dilemma in 2012. I don’t believe the solution is to make Marketing report to Sales and lose its position at the boardroom table. However, the core marketing conversation must demonstrate how marketing activity impacts sales pipeline and, ultimately, revenue. I see revenue performance management become more than just a buzzword as B2Bers start to demonstrate predictable, sustainable growth in sales, fueled by tighter marketing and sales alignment. Interestingly, notable successes will come from firms that grow sales with existing clients rather than bold moves into net-new markets.

3. The role of the customer advocate will emerge and take shape. B2B marketers have long known the value of the customer reference. Buyers want proof that you did what you say you do for someone else like them. And they want to learn from those experiences. While customer case studies and success stories were the physical and online record of this achievement, lower cost advances in technology will make it far easier for B2B marketers to capture customer testimonial in the form of video or interactive apps, particularly those suited for tablet presentation. I see companies like BrightTALK, ntara interactive, StoryQuest, and Velocity World Media experiencing a bumper year in 2012. Social networks – and plain, old, traditional industry associations and conferences — will let marketers turn clients into advocates by promoting mutual successes and shining the spotlight on customer achievement rather than product features.

4. To increase lead scoring effectiveness, marketers incorporate fit and interest criteria. Sales continues to complain that marketing delivers terrible leads. Lead scoring helps to bring discipline to the lead development and qualification process. But scoring backfires as marketers get too sophisticated too early when rating the value of prospect engagement with marketing activity. Because the threshold always changes, smart marketers will use scoring to prioritize leads, and let sales determine where to draw the line. As a best practice, they will use hard profile information – rightness of fit, account demographics, contact relevance, and audience rating – to augment softer behavioral information passed along with each “qualified” lead.

5. Content marketing will evolve as a separate function within the marketing organizational structure. The Internet has helped to make B2B buyers more sophisticated. Today, over half of the purchase decision is complete by the time buyers talk to sales. To get noticed during the early investigation phase – when the realization dawns to decision makers that the status quo is not working – marketers must produce interesting, educating, thought-provoking content. In 2012 they will quit relying on agencies to do this. The need to publish points of view in-line with thought-leading positions will cause firms (in particular: big ones) to hire or retain journalist-quality writers to pump out content for field and solution marketing programs (demand gen) to consume.

What do you see and how is that view different?  Post a comment here to share your thoughts.

PS: I sourced this image from http://www.freedigitalphotos.net/images/view_photog.php?photogid=809

What Did B2B Marketers Learn in 2011? – A discussion on Focus.com

Craig Rosenberg, VP and leader for the Focus Expert Network (aka @funnelholic), invited me to participate in an online discussion about what B2B marketers learned in 2011. Now that I am into my “sophomore year” at Xerox, I can’t presume to speak for all B2B marketers like I did when I was an analyst. However, I thought I would share a few personal insights about what I’ve learned working from the marketing trenches at a very large, very tenured, highly-recognized brand in the tech space.  Here are my top 5 “hard won” lessons from this year:

1) B2B marketers must give Sales any excuse to talk to clients. There are a million things to do as a B2B marketer. If you prioritize those things that create an opportunity for your account managers to check in with a client — or your sales reps to reach out to a prospect — you will do more to align marketing activity with sales outcomes and increase marketing’s value to the business. As you put together marketing programs and campaigns, always ask “where does Sales engage the customer in this process?”

2) Time spent on segmentation and targeting is invaluable. B2B marketers are learning to understand buyers better, but the lesson isn’t complete. Knowing your buyer intimately — having the ability to define a buying persona precisely– lets B2B marketers develop the content that engages buyers and put it where buyers will find it. You also have to understand who Sales considers a target, because if you develop leads that aren’t in anyone’s territory or too small to sustain your average deal size, no one will pick them up and work on them.

3) The pressure to move from lead generation to demand management will continue to increase. Sales can’t pursue every “lead” that marketing uncovers because sales need to focus on those prospects that offer the best immediate opportunity.  B2B marketers who think beyond the current event, campaign, or quarter-end will better create programs that develop demand, qualify it over time, and deliver those “ripe” opportunities to sales — within the territory and opportunity criteria that sales wants to pursue. This is the best way to scale the pipeline and put the revenue generation engine of your firm into high gear.

4) The value of marketing content must be measured in the buyer’s eye, not yours. This is a tough one for B2B marketers to learn because they believe their products and services are so special — and require such obscure, tedious description — that they find it hard to talk about much else with authority.  This past year, top marketers learned that hiring people who know how to write, who can tell a compelling story, and who can make content interesting to watch is the best way to leave the meaningless blather and inside-out perspective behind.

5) Learn how to extend the life of your content assets and events. B2B marketers focus a lot of activity around events like tradeshows, sporting events, dinner meetings, or webinars. While these events help tell your story or make executive-to-executive connections, the activity also presents many opportunities to capture an asset and use it to engage those who could not be there live. Whether it is slides, photos, video recordings, interviews, tweets, or blog posts, every event creates artifacts that smart marketers can use to help sales keep client conversations going — or to engage new prospects — while demonstrating your unique point of view, expertise, and commitment to building deeper customer relationships.

What have been your key lessons from 2011? Check out the Focus.com discussion on this topic and join in!


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