Lead Lifecycle Analytics: Essential Metrics for Perpetual Revenue Growth
2 likes3,734 views
This document discusses key metrics for measuring marketing performance and revenue growth through the lead lifecycle. It outlines the buying cycle, sales cycle, and customer service aspects of the customer lifecycle. Top performers measure metrics like marketing qualified leads (MQLs), sales accepted leads (SALs), conversion rates, and revenue. Tracking leads through each stage from initial inquiry to purchase and beyond provides insights into improving marketing and sales efforts to maximize revenue. There is no single golden metric, and marketing, sales, and customer service must work together across the entire lifecycle.
Lead Lifecycle Analytics: Essential Metrics for Perpetual Revenue Growth
- 1. Sponsored by: Lead Lifecycle Analytics Essential Metrics for Perpetual Revenue Growth Ian Michiels Gleanster @InsightFanatic
- 2. About the Research Findings Top Performers: Respondents that achieved Top Quartile performance in key KPI’s TODAY’S STATS Everyone Else: Everyone Else Total survey responses: 432 Qualified survey responses: 321 Lead Marketing Prioritization Automation Gleansight Gleansight (Nov 2011) (Dec 2011) Growth in: REVENUE AVG CLICK-THROUGH LEAD-TO-SALES CONVERSION #AOWEB 2
- 3. Agenda for Today… • Managing by Revenue by the numbers: – Buying Cycle – Sales Cycle – Lead Lifecycle • Define how to actually measure the sales pipeline? • Lead Lifecycle Dashboard • 3 Tactics You Can’t Succeed Without #AOWEB 3
- 4. In a world… “The Board wants to raise our sales targets this year… I think we need to beef up our Marketing!” We need more leads. Mr. CEO Mary, what will it take to increase sales by 2x year-over-year? “How about we raise the marketing budget by 1%.” “Can we do it?” #AOWEB 4
- 5. One woman fights for success… Mary VP of Marketing What are my options? #AOWEB 5
- 6. Option 1: Tell Him Yes, and Hope We Can Mary Marketing Spend + Sales Effort = ? VP of Marketing I’m not sure exactly ? how effective my marketing spend was ? last year? ? ? # But, we reached our targets. “I just don’t know…” #AOWEB 6
- 7. Option 2: Go Check the Numbers I’ll check my Lead Lifecycle Analytics Dashboard! Mary VP of Marketing It tells me: • Exactly how many leads I need to reach 2x sales growth. • Exactly what it will cost me to generate those leads. • Exactly how I can set realistic expectations with sales about meeting our targets… If we both deliver on our plan. And I can make a tangible case for why I need a 10% increase in budget and not 2%. #AOWEB 7
- 8. First the Groundwork • A basic understanding of key concepts… • What do Top Performers measure? • What should you measure? • What are the best practices for measuring the lead lifecycle? #AOWEB 8
- 9. Hope Is Not a Strategy Gleanster Research : 9 out of 10 B2B marketers use “revenue growth” as the primary metric for measuring marketing success. 62% of Top Performers measure MQL to SAL conversion #AOWEB 9
- 10. What’s MQL and SAL? …Let’s dive into some key concepts #AOWEB 10
- 11. Demand Generation Concepts • Buying Cycle What’s with all the cycles and circles? • Sales Cycle • Lead Lifecycle #AOWEB 11
- 12. The Birds Eye View of Lead Generation Psst… that’s the Customer Lifecycle Leads Prospects Customers An inquiry into a A qualified A person or product, a decision making organization that potential individual with has purchased prospect. budget and goods or services. authority to Expressed interest influence a sale. in solving a problem. #AOWEB 12
- 13. The Birds Eye View of Lead Generation Leads Prospects Customers Customer Lifecycle Buying Cycle Sales Cycle Service #AOWEB 13
- 14. 1) Buying Cycle Email Social Media Banner Ads PR Re-Targeting Website Video Webinars Advertisements Microsites Search Mobile Events Direct Mail Affiliations MARKETING Attention Interest • Known Desire Problem? • Recognized need • Seek solution Action to need Goal #1: Become a trusted advisor – DON’T SELL! Goal #2: Relevant communications #AOWEB 14
- 15. 2) Sales Cycle Engagement • Traditional “funnels” are less useful in the context of sales these days – Prospects are educated beforehand – Sales performance can be predictable • 71% of Top Performers implement Lead Scoring to increase sales productivity – Sales enablement is the name of the game: • Meaningful value added dialogs • Marketing shares responsibility • Minimize sales qualification • The input and output matter most, not what happens in-between. #AOWEB 15
- 16. 3) Service • Marketing tactics used to acquire new prospects should be applied to existing customers • You probably have LOADS of info on your customers, use it for micro-targeting – Earn their loyalty with relevant communications #AOWEB 16
- 17. Lead Lifecycle Management Metrics and Measurements Revenue Growth BUYING CYCLE MAXIMIZE REVENUE Cost per Lead # of qualified leads generated Close rate on marketing-sourced leads Nurture Opportunities Conversion rate “Not Ready to Buy” Marketing-sourced deals as share of pipeline Response rates SALES CYCLE Marketing cost per revenue dollar Cost per lead Cross-Selling and Incremental revenue from marketing efforts Up-Selling Marketing-sourced revenue Click-Through Rate CUSTOMER Open Rate SERVICE Bounced Emails #AOWEB 17
- 18. What are the levers that impact revenue? Hint: There’s more than one. #AOWEB 18
- 19. It’s Not a Handoff… It’s a Team Effort Leads Prospects Customers Customer Lifecycle Buying Cycle Sales Cycle Service Marketing Marketing Marketing Sales Sales Sales #AOWEB 19
- 20. Follow the Revenue Leads Prospects Customers Customer Lifecycle Buying Cycle Sales Cycle Service Revenue PROSPECTS Revenue DROP OUT OF PIPELINE CUSTOMERS Revenue UP-SELLING / CROSS SELLING #AOWEB 20
- 21. There is no Golden Metric • Revenue is a byproduct of marketing • Lead Lifecycle Analytics measure the levers that impact revenue Leads Prospects Customers Customer Lifecycle Buying Cycle Measurement SalesMeasurement Cycle Service Measurement Revenue PROSPECTS Revenue DROP OUT OF PIPELINE CUSTOMERS Revenue UP-SELLING / CROSS SELLING #AOWEB 21
- 22. What should you measure? Leads Prospects Customers Customer Lifecycle Buying Cycle Sales Cycle Service When the prospect Inquiry. Sales Accepted Lead (SAL) purchases they become a (Unknown buying intent) = Prospect customer , requiring ongoing service and support. Customers can also be Marketing Qualified Leads Sales Qualified Lead (SQL) nurtured to encourage up- (MQL). = Valid Opportunity selling and cross-selling. #AOWEB 22
- 23. Back to Mary Mary VP of Marketing • Exactly how many leads I need to reach 2x sales growth. • Exactly what it will cost me to generate those leads. • Exactly how I can set realistic expectations with sales about meeting our targets… If we both deliver on our plan. • How do I justify more budget? #AOWEB 23
- 24. Lead Lifecycle Metrics 15 Critical Metrics But, don’t be overwhelmed… #AOWEB 24
- 25. Lead Lifecycle Analytics Dashboard Period of Measurement: _____________________ Spend / Channel Cost per Marketing SQL to Closed Sales Ratio Qualified Lead SALES SUCCESS METRICS MARKETING & SALES ALIGNMENT METRICS Use as basis for optimization MARKETING SUCCESS METRICS # Inquiries / Channel Total # of Sales Accepted Average Deal Size Leads (SALs) Automate with technology Track in CRM Total # of Inquiries Ratio of MQL to SAL Sales Cycle-Time Track with: web analytics, marketing automation, search Use as basis for optimization Average sales cycle length analytics, etc. LIFECYCLE REVENUE Total # of Marketing Cost per SAL # SQL Not Ready to Qualified Leads (MQLs) Purchase Add Sales overhead to METRICS marketing spend Sent back to marketing Ratio of Inquiry to MQL Total # of Sales Qualified Cross-Selling & Up-Selling Leads (SQLs) Revenue Growth/Decline Use as basis for optimization Track in CRM #AOWEB 25
- 26. Lead Lifecycle Analytics Dashboard Period of Measurement: _____________________ Spend / Channel Cost per Marketing SQL to Closed Sales Ratio Qualified Lead SALES SUCCESS METRICS MARKETING & SALES ALIGNMENT METRICS Use as basis for optimization MARKETING SUCCESS METRICS # Inquiries / Channel Total # of Sales Accepted Average Deal Size Leads (SALs) Automate with technology Track in CRM Total # of Inquiries Ratio of MQL to SAL Sales Cycle-Time Track with: web analytics, marketing automation, search Use as basis for optimization Average sales cycle length analytics, etc. LIFECYCLE REVENUE Total # of Marketing Cost per SAL # SQL Not Ready to Qualified Leads (MQLs) Purchase Add Sales overhead to METRICS marketing spend Sent back to marketing Ratio of Inquiry to MQL Total # of Sales Qualified Cross-Selling & Up-Selling Leads (SQLs) Revenue Growth/Decline Use as basis for optimization Track in CRM #AOWEB 26
- 27. Lead Lifecycle Analytics Dashboard Period of Measurement: _____________________ Spend / Channel Cost per Marketing SQL to Closed Sales Ratio Qualified Lead SALES SUCCESS METRICS MARKETING & SALES ALIGNMENT METRICS Use as basis for optimization MARKETING SUCCESS METRICS # Inquiries / Channel Total # of Sales Accepted Average Deal Size Leads (SALs) Automate with technology Track in CRM Total # of Inquiries Ratio of MQL to SAL Sales Cycle-Time Track with: web analytics, marketing automation, search Use as basis for optimization Average sales cycle length analytics, etc. LIFECYCLE REVENUE Total # of Marketing Cost per SAL # SQL Not Ready to Qualified Leads (MQLs) Purchase Add Sales overhead to METRICS marketing spend Sent back to marketing Ratio of Inquiry to MQL Total # of Sales Qualified Cross-Selling & Up-Selling Leads (SQLs) Revenue Growth/Decline Use as basis for optimization Track in CRM #AOWEB 27
- 28. Lead Lifecycle Analytics Dashboard Period of Measurement: _____________________ Spend / Channel Cost per Marketing SQL to Closed Sales Ratio Qualified Lead SALES SUCCESS METRICS MARKETING & SALES ALIGNMENT METRICS Use as basis for optimization MARKETING SUCCESS METRICS # Inquiries / Channel Total # of Sales Accepted Average Deal Size Leads (SALs) Automate with technology Track in CRM Total # of Inquiries Ratio of MQL to SAL Sales Cycle-Time Track with: web analytics, marketing automation, search Use as basis for optimization Average sales cycle length analytics, etc. LIFECYCLE REVENUE Total # of Marketing Cost per SAL # SQL Not Ready to Qualified Leads (MQLs) Purchase Add Sales overhead to METRICS marketing spend Sent back to marketing Ratio of Inquiry to MQL Total # of Sales Qualified Cross-Selling & Up-Selling Leads (SQLs) Revenue Growth/Decline Use as basis for optimization Track in CRM #AOWEB 28
- 29. Lead Lifecycle Analytics in Action • Exactly how many leads do I need to reach 2x sales growth? Assumptions: • Using predictable marketing channels: web, search, email • Average Deal size is known • Average SQL to Close Ratio is known Period: Quarterly Period: Quarterly Formula Formula Inquiries 1000 Inquiries 2544 Ratio to MQL 40% Ratio to MQL 40% MQL 400 1000*.40 MQL 1018 2544*.40 ? Ratio to SAL 80% Ratio to SAL 80% SAL 320 320*.80 SAL 814 1018*.80 Ratio to SQL 89% Ratio to SQL 89% SQL 285 285*.89 SQL 725 814*.89 Ratio to Close 12% Ratio to Close 12% Closed Sales 34 34*.12 Closed Sales 87 87*.12 Average Deal Size $23,000 Average Deal Size $23,000 Expected Sales $786,048 Expected Sales $2,000,000 #AOWEB 29
- 30. Lead Lifecycle Analytics in Action • How do I justify more budget? If Marketing and Sales performance remain consistent then: Period: Quarterly Period: Quarterly Formula Formula Inquiries 1000 Inquiries 2544 Cost per MQL = $345 Ratio to MQL 40% Ratio to MQL 40% MQL 400 1000*.40 MQL 1018 2544*.40 Ratio to SAL 80% Ratio to SAL 80% To reach $2M in Sales, I need 320*.80 SAL 320 SAL 814 1018*.80 $345 x 1018=SQL Ratio to 89% Ratio to SQL 89% SQL 285 285*.89 SQL 725 814*.89 Ratio to Close 12% Ratio to Close 12% $351,210… aSales increase in34 34*.12 Closed 9% my Closed Sales 87 87*.12 budget! Deal Size Average $23,000 Average Deal Size $23,000 Expected Sales $786,048 Expected Sales $2,000,000 #AOWEB 30
- 31. Awesome, but does anyone do this? • Yes… almost • Check out the stats on Top Performers # Marketing Sourced Leads (Inquiry) 79% # Marketing Qualified Leads 71% Conversion Rate from Inquiry to MQL 62% Marketing Sourced to Pipeline Ratio 54% Response rates 49% Marketing Cost per Revenue Dollar 42% 0% 25% 50% 75% 100% Top Performers Source: Q4’11 Marketing Automation, n= 378 #AOWEB 31
- 32. How do Top Performers Calculate Metrics Currently Using Tool 100% 96% 85% 82% 75% 59% 50% 43% 24% 23% 25% 16% 0% Web Analytics Stand-Alone Email Marketing Microsites Marketing Tool Automation Tool Top Performers Everyone Else Source: Q4’11 Marketing Automation, n= 378 #AOWEB 32
- 33. Top 3 Critical to Success Factors for Top Performers (Tactics you can’t succeed without…) #AOWEB 33
- 34. 1) CRM Integration is Key *38% *29% *Percentage of Top WEB LANDING Performers that integrate ANALYTICS PAGES technology with CRM *58% *46% EMAIL MARKETING MARKETING AUTOMATION CRM DATA WAREHOUSE Other Channels (Less frequently integrated) DIRECT MAIL DIGITAL SIGNAGE BUSINESS FULFILLMENT MOBILE MARKETING INTELLIGENCE SOLUTION DIGITAL SIGNAGE WEB CONTENT MANAGEMENT DIGITAL ASSET MANAGEMENT #AOWEB 34
- 35. 2) Standardize Definitions for Measurement • 83% of Top Performers document the definitions for: – Marketing Qualified Leads – Sales Accepted Leads – Sales Qualified Leads • Lead Scoring with Marketing Automation tools is a form of standardizing definitions • Be consistent about measurement and calculations – You can’t benchmark on a moving target #AOWEB 35
- 36. 3) Let Technology do the Heavy Lifting • Turn to technology for multi-channel measurement – More channels = more measurement • Email, Website, SEM, Webinar Integration, Social Media Integration • Keep as much of the measurement in a system as possible – 2 out of 3 Top Performers adopt standardized out of the box metrics from Marketing Automation #AOWEB 36
- 37. Thanks! Q&A Ian Michiels Gleanster @InsightFanatic 37
- 38. Guide to Lead Lifecycle Analytics Deep Dive: Lead Lifecycle Analytics All registered attendees will be getting a complimentary copy via Act-On! #AOWEB 38
- 39. Thank You! Within 24 hours: You will receive an email with webinar recording, slides and Act-On Information. Learn more about Act-On: Join our weekly 30-minute live demo Customer case study webinars And more: www.actonsoftware.com #AOWEB