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2011 trends and challenges

B2B Lead Roundtable
B2B Lead Roundtable

The economic pressure is not letting up and 2011 will demand more of B2B marketers than ever before. How can you deliver what CEOs most want quality leads - within tight timelines and even tighter budgets? Where should you place your priorities? How can you rapidly make an impact on your companys revenue capacity, profit, and growth?

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2011 Lead Generation Trends and Challenges J. David Green Director of Best Practices, MECLABS #b2bleadgen
Agenda Audience Poll Challenges and Trends Economics of Demand Generation and Lead Management Sales costs and a cost-avoidance argument A revenue capacity argument Metrics Summary Key Takeaways 2 #b2bleadgen
Todays speaker J. David Green Director of Best Practices, MECLABS en & id Gre or Dav ayl y J. ael C. S Case study: $1B pipeline in 20 months B Mi c h Author and co-author of numerous white paper, blog posts, articles, and the book, The B2B Refinery速 Speak at MarketingSherpa, DMA, and other events 25 years of wide ranging B2B lead generation experience Working with large Cisco partner on lead nurturing projects Consultant on technology channel marketing 3 #b2bleadgen
MECLABS: A science lab with a consultancy More than 10 years of research 1,300+ major experiments Over 1 billion emails 10,000 sales-paths tested Hundreds of publications and conferences 4 #b2bleadgen
Audience poll How many direct or indirect sales full time employees do you support with leads? 500+ 100-499 50-99 20-49 Less than 19 5 #b2bleadgen
Audience poll On a scale of 1-5, how advanced would you say your lead generation practices are today? (5=best) 6 #b2bleadgen
Challenges & Trends
What is the biggest worry of innovative B2B marketers? 8 #b2bleadgen
The challenge In 2009, 68% of marketers saw generating high quality leads as their number one business challenge. In 2010, the percentage rose to 75% Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report 9 #b2bleadgen
The challenge For the last three years, marketers have focused increasingly on lead quality. This focus, in turn, has placed greater emphasis on: Data hygiene and enhancement Lead nurturing Lead scoring Funnel metrics Alignment The current economy intensifies C-suite demands on marketing for ROI 10 #b2bleadgen
What are the content implications of lead nurturing and lead scoring? 11 #b2bleadgen
Based on trends in 2010 and projected for 2011, nurturing and scoring depend on content More segmentation for relevance (personas, stage of consideration, verticals) Low-production value content (e.g., blogs, raw video) More employee writers/thought-leaders More re-purposing/multi-purposing Content aggregation services through web-crawling and linkage/summary Integration of social media into lead nurture streams (as well as a demand generation tool) 12 #b2bleadgen
What are data implications of lead nurturing and lead scoring? 13 #b2bleadgen
Based on trends in 2010 and projected for 2011, relevant content-nurturing requires data Less-end user data capture at the top of the funnel Incremental, optional, conditional end-user data capture Great focus on data hygiene Data appends (account, contact, triggers) Account-level modeling (propensity to buy and buying potential) Content extrapolation of problems, function, level, depth of interest 14 #b2bleadgen
Economics of demand gen: The cost of sales follow up
How does sales leadership see the economics of lead generation? 16 #b2bleadgen
Eight out of ten marketers hand raw leads straight to sales Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report 17 #b2bleadgen
Mountains of leads, molehill of sales New leads 40 100 Filled out web form, called toll-free number, visited booth, hours attended webinar, etc. Valid leads 28 - 34 70 - 85 Insufficient info, bogus info, hours not in target market Sales-ready leads 1.6 2.8 4-7 Lead scoring, tele-qualifications hours Decline in lead population through @ up to 5 attempts/lead the funnels early stages. & @ 10 dials/hour 18 #b2bleadgen
So what should those funnel numbers mean in terms of expense? 19 #b2bleadgen
Cheap leads cost a lot of money Annual cost Hourly cost Loaded cost/ Field sales rep $ (200,000) $ (102) Leads Hours Cost/Hour 100 New leads 100 40 $ (4,082) 70 Valid leads 70 34 $ (3,469) Sales-ready leads 7 2.8 $ (286) 7 Assumes 1,960 hours per year and 19,600 dials. 20 #b2bleadgen
Economics of demand gen: The cost-avoidance argument
What financial yardsticks exist in your company for measuring lead generation effectiveness? 22 #b2bleadgen
Sales prospecting costs more than a CFO might expect How much time do your sales people spend prospecting? How much is that prospecting time costing your company? Source: CSO Insights Sales Performance Optimization report, 15th edition: over 1,800 companies surveyed. Copyright 息 2009 CSO Insights. All Rights Reserved. 23 #b2bleadgen
Sales prospecting cost Marketing budget? Sales prospecting scenario In this example at 20% of time spent on sales Revenue $ 1,000,000,000 prospecting, the entire Profit $ 100,000,000 marketing budget Marketing budget $ (50,000,000) equals the portion of the sales budget Sales budget $ (250,000,000) allocated to Other expenses $ (600,000,000) prospecting. Sales budget line item Time prospecting $ 1,000,000,000 Prospecting allocation $ 50,000,000 24 #b2bleadgen
Sales prospecting equals a lot of FTEs Given that $50m budget allocation to sales prospecting from the prior slide, a $200k loaded cost/field resource is the equivalent of 250 sales people. Annual cost Sales budget $ (50,000,000) Loaded cost/field sales rep $ (200,000) Sales FTEs 250 ($50m sales budget allocation) / ($200k/rep) = 250 reps 25 #b2bleadgen
Economics of demand gen: The revenue capacity argument
What revenue capacity can lead generation unleash? 27 #b2bleadgen
Sales & Marketing Resource Allocation & the Buying Cycle Lead generation scales sales 100% These reallocated sales resources As much as possible, replace result in Less these sales resources with lower- increased efficient cost methods of marketing & revenue sales Allocated telemarketing contact capacity/higher resources percent of sales productivity sales More resources efficient sales resources 0% Prospecting Nurturing Selling Buying cycle stages 28 #b2bleadgen
Sales-ready leads increase revenue capacity, profits and growth 10% more selling time Sales prospecting Scalable lead gen $10m increase in scenario scenario marketing budget Revenue $ 1,000,000,000 $ 1,100,000,000 Profit $ 100,000,000 $ 190,000,000 Marketing budget $ (50,000,000) $ (60,000,000) Sales budget $ (250,000,000) $ (250,000,000) Other expenses $ (600,000,000) $(600,000,000) Sales budget line item Time prospecting 20% 10% Prospecting allocation $ (50,000,000) $ (25,000,000) 29 #b2bleadgen
Economics of demand gen: Key pipeline metrics for forecasting and analysis
What funnel metrics can improve sales and marketing planning, forecasting and efficiency? 31 #b2bleadgen
For the first time in the seven years of this report, a slim majority (51%) of responding firms now track the ROI of their marketing campaigns. Source: CSO Insights 2010 Lead Generation Optimization report. Copyright 息 2010 CSO Insights. All Rights Reserved. 32 #b2bleadgen
Measuring discrete funnel stages improves forecasting and operational efficiency New leads Complex sales make Registered leads forecasting, analysis and funnel-tuning Rules-validated leads difficult Buying cycle Phone-ready leads Discrete funnel conversion stages Phone-validated leads improve forecasting Sales-ready leads accuracy and narrow 75% problem identification to Sales-validated leads 95% Feedback loops can Sales-forecasted opportunities improve upstream and downstream stages. Sales outcomes Copyright 息 MECLABS 2010, all rights reserved. 33 #b2bleadgen
Key takeaways
Key takeaways Lead quality concerns are driving initiatives in lead nurturing and lead scoring, which both are driving numerous marketing changes Sales prospecting offers marketers a financial yardstick for measuring lead generation effectiveness The cost avoidance argument: Sales qualification is very expensive Sales prospecting is very expensive 35 #b2bleadgen
Key takeaways The revenue capacity argument: lead generation can improve the sales and marketing expense-to-revenue ratio (sales scalability and sales productivity) The right metrics can improve forecasting and drive continuous funnel improvement 36 #b2bleadgen
Contact information Dave Green Director of Best Practices, MECLABS Co-Author of The B2B Refinery速 en & Gre ylor vid dave.green@meclabs.com J. Da ael C. S h a Mi c 409-770-0710 MECLABS.com MarketingExperiments.com MarketingSherpa.com StartWithaLead.com StartWithaLead.com/LinkedIn 37 #b2bleadgen

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2011 trends and challenges

  • 1. 2011 Lead Generation Trends and Challenges J. David Green Director of Best Practices, MECLABS #b2bleadgen
  • 2. Agenda Audience Poll Challenges and Trends Economics of Demand Generation and Lead Management Sales costs and a cost-avoidance argument A revenue capacity argument Metrics Summary Key Takeaways 2 #b2bleadgen
  • 3. Todays speaker J. David Green Director of Best Practices, MECLABS en & id Gre or Dav ayl y J. ael C. S Case study: $1B pipeline in 20 months B Mi c h Author and co-author of numerous white paper, blog posts, articles, and the book, The B2B Refinery速 Speak at MarketingSherpa, DMA, and other events 25 years of wide ranging B2B lead generation experience Working with large Cisco partner on lead nurturing projects Consultant on technology channel marketing 3 #b2bleadgen
  • 4. MECLABS: A science lab with a consultancy More than 10 years of research 1,300+ major experiments Over 1 billion emails 10,000 sales-paths tested Hundreds of publications and conferences 4 #b2bleadgen
  • 5. Audience poll How many direct or indirect sales full time employees do you support with leads? 500+ 100-499 50-99 20-49 Less than 19 5 #b2bleadgen
  • 6. Audience poll On a scale of 1-5, how advanced would you say your lead generation practices are today? (5=best) 6 #b2bleadgen
  • 8. What is the biggest worry of innovative B2B marketers? 8 #b2bleadgen
  • 9. The challenge In 2009, 68% of marketers saw generating high quality leads as their number one business challenge. In 2010, the percentage rose to 75% Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report 9 #b2bleadgen
  • 10. The challenge For the last three years, marketers have focused increasingly on lead quality. This focus, in turn, has placed greater emphasis on: Data hygiene and enhancement Lead nurturing Lead scoring Funnel metrics Alignment The current economy intensifies C-suite demands on marketing for ROI 10 #b2bleadgen
  • 11. What are the content implications of lead nurturing and lead scoring? 11 #b2bleadgen
  • 12. Based on trends in 2010 and projected for 2011, nurturing and scoring depend on content More segmentation for relevance (personas, stage of consideration, verticals) Low-production value content (e.g., blogs, raw video) More employee writers/thought-leaders More re-purposing/multi-purposing Content aggregation services through web-crawling and linkage/summary Integration of social media into lead nurture streams (as well as a demand generation tool) 12 #b2bleadgen
  • 13. What are data implications of lead nurturing and lead scoring? 13 #b2bleadgen
  • 14. Based on trends in 2010 and projected for 2011, relevant content-nurturing requires data Less-end user data capture at the top of the funnel Incremental, optional, conditional end-user data capture Great focus on data hygiene Data appends (account, contact, triggers) Account-level modeling (propensity to buy and buying potential) Content extrapolation of problems, function, level, depth of interest 14 #b2bleadgen
  • 15. Economics of demand gen: The cost of sales follow up
  • 16. How does sales leadership see the economics of lead generation? 16 #b2bleadgen
  • 17. Eight out of ten marketers hand raw leads straight to sales Source: MarketingSherpa 2010 and 2011 B2B Marketing Benchmark Report 17 #b2bleadgen
  • 18. Mountains of leads, molehill of sales New leads 40 100 Filled out web form, called toll-free number, visited booth, hours attended webinar, etc. Valid leads 28 - 34 70 - 85 Insufficient info, bogus info, hours not in target market Sales-ready leads 1.6 2.8 4-7 Lead scoring, tele-qualifications hours Decline in lead population through @ up to 5 attempts/lead the funnels early stages. & @ 10 dials/hour 18 #b2bleadgen
  • 19. So what should those funnel numbers mean in terms of expense? 19 #b2bleadgen
  • 20. Cheap leads cost a lot of money Annual cost Hourly cost Loaded cost/ Field sales rep $ (200,000) $ (102) Leads Hours Cost/Hour 100 New leads 100 40 $ (4,082) 70 Valid leads 70 34 $ (3,469) Sales-ready leads 7 2.8 $ (286) 7 Assumes 1,960 hours per year and 19,600 dials. 20 #b2bleadgen
  • 21. Economics of demand gen: The cost-avoidance argument
  • 22. What financial yardsticks exist in your company for measuring lead generation effectiveness? 22 #b2bleadgen
  • 23. Sales prospecting costs more than a CFO might expect How much time do your sales people spend prospecting? How much is that prospecting time costing your company? Source: CSO Insights Sales Performance Optimization report, 15th edition: over 1,800 companies surveyed. Copyright 息 2009 CSO Insights. All Rights Reserved. 23 #b2bleadgen
  • 24. Sales prospecting cost Marketing budget? Sales prospecting scenario In this example at 20% of time spent on sales Revenue $ 1,000,000,000 prospecting, the entire Profit $ 100,000,000 marketing budget Marketing budget $ (50,000,000) equals the portion of the sales budget Sales budget $ (250,000,000) allocated to Other expenses $ (600,000,000) prospecting. Sales budget line item Time prospecting $ 1,000,000,000 Prospecting allocation $ 50,000,000 24 #b2bleadgen
  • 25. Sales prospecting equals a lot of FTEs Given that $50m budget allocation to sales prospecting from the prior slide, a $200k loaded cost/field resource is the equivalent of 250 sales people. Annual cost Sales budget $ (50,000,000) Loaded cost/field sales rep $ (200,000) Sales FTEs 250 ($50m sales budget allocation) / ($200k/rep) = 250 reps 25 #b2bleadgen
  • 26. Economics of demand gen: The revenue capacity argument
  • 27. What revenue capacity can lead generation unleash? 27 #b2bleadgen
  • 28. Sales & Marketing Resource Allocation & the Buying Cycle Lead generation scales sales 100% These reallocated sales resources As much as possible, replace result in Less these sales resources with lower- increased efficient cost methods of marketing & revenue sales Allocated telemarketing contact capacity/higher resources percent of sales productivity sales More resources efficient sales resources 0% Prospecting Nurturing Selling Buying cycle stages 28 #b2bleadgen
  • 29. Sales-ready leads increase revenue capacity, profits and growth 10% more selling time Sales prospecting Scalable lead gen $10m increase in scenario scenario marketing budget Revenue $ 1,000,000,000 $ 1,100,000,000 Profit $ 100,000,000 $ 190,000,000 Marketing budget $ (50,000,000) $ (60,000,000) Sales budget $ (250,000,000) $ (250,000,000) Other expenses $ (600,000,000) $(600,000,000) Sales budget line item Time prospecting 20% 10% Prospecting allocation $ (50,000,000) $ (25,000,000) 29 #b2bleadgen
  • 30. Economics of demand gen: Key pipeline metrics for forecasting and analysis
  • 31. What funnel metrics can improve sales and marketing planning, forecasting and efficiency? 31 #b2bleadgen
  • 32. For the first time in the seven years of this report, a slim majority (51%) of responding firms now track the ROI of their marketing campaigns. Source: CSO Insights 2010 Lead Generation Optimization report. Copyright 息 2010 CSO Insights. All Rights Reserved. 32 #b2bleadgen
  • 33. Measuring discrete funnel stages improves forecasting and operational efficiency New leads Complex sales make Registered leads forecasting, analysis and funnel-tuning Rules-validated leads difficult Buying cycle Phone-ready leads Discrete funnel conversion stages Phone-validated leads improve forecasting Sales-ready leads accuracy and narrow 75% problem identification to Sales-validated leads 95% Feedback loops can Sales-forecasted opportunities improve upstream and downstream stages. Sales outcomes Copyright 息 MECLABS 2010, all rights reserved. 33 #b2bleadgen
  • 35. Key takeaways Lead quality concerns are driving initiatives in lead nurturing and lead scoring, which both are driving numerous marketing changes Sales prospecting offers marketers a financial yardstick for measuring lead generation effectiveness The cost avoidance argument: Sales qualification is very expensive Sales prospecting is very expensive 35 #b2bleadgen
  • 36. Key takeaways The revenue capacity argument: lead generation can improve the sales and marketing expense-to-revenue ratio (sales scalability and sales productivity) The right metrics can improve forecasting and drive continuous funnel improvement 36 #b2bleadgen
  • 37. Contact information Dave Green Director of Best Practices, MECLABS Co-Author of The B2B Refinery速 en & Gre ylor vid dave.green@meclabs.com J. Da ael C. S h a Mi c 409-770-0710 MECLABS.com MarketingExperiments.com MarketingSherpa.com StartWithaLead.com StartWithaLead.com/LinkedIn 37 #b2bleadgen