This is our third guest blog post written by Carlos Hidalgo of The Annuitas Group. Carlos’ post today analyzes several common misperceptions that B2B marketers have about lead management. As always, he helps us understand how evolving our demand generation strategies is about not only technology, but also people and processes. Today's post is a great addition to this dialogue. ~ABN
Lead management continues to be a hot topic in the world of B2B marketing as we turn the corner and head into the second half of 2010. Over the last 12 months, marketing and sales dialogue increasingly has focused on how marketers can better engage with the more empowered B2B buyer and what they need to do in order to leverage the B2B buyer relationship.
As a leader in lead management process development, our firm has seen a lot of confusion in the market about what constitutes lead management. There is quite a bit of uncertainty on how companies should approach lead management and what it takes to achieve best practices. In addition to the confusion, we’ve also witnessed the emergence of many falsehoods about lead management.
In this post, we’ll dispel what we see as the Top 5 Myths of B2B Lead Management.
So what are these myths?
Myth #1: A Marketing Automation Solution by Itself Will Deliver Lead Management
This myth is at the top of the list as it is so prevalent in the market and causing a lot of confusion for many organizations.
In the late 90’s and early 2000’s many companies fell prey to a similar promise. Remember the initial emergence of CRM solutions? Companies embraced the hope of increased revenues and a more effective sales force if they simply implemented CRM. What they found however was that CRM didn’t help them fix their faulty sales process.
Today many B2B marketers are buying into a similar idea: If they acquire a marketing automation solution, then they will wind up with a lead management process. Nothing could be further from the truth. Technology adoption must occur hand-in-hand with process evolution.
Lead management is a business process that is enabled by technology (in this case marketing automation). Groups such as Aberdeen Group and Gartner have substantiated this claim with their research into the B2B market. Any organization seeking to develop effective lead management must remember that it is process first, technology second, not the other way around.
Myth #2: Lead Management Is a Marketing-only Initiative
While the development of an internal closed-loop lead management process necessitates involvement from marketing, it is not solely a marketing program. In fact, if organizations approach lead management from a “marketing only” perspective, the chances for long term success are short lived.
The development of a lead management process, at the very least, must involve a collaborative effort between marketing and sales. These two groups must work together to define, agree to and implement the process.
In many cases there also will be other groups that will need to be involved, including IT, finance, third-party agencies, partner channels, etc. The best lead management initiatives include a collaborative effort among all groups that have any stake in the demand generation continuum. By including all of the appropriate groups, you will obtain a much fuller perspective on your prospects and customers, significantly increase the likelihood of company wide buy-in to lead management, and develop a process that has long term sustainability.
Myth #3: Lead Management = Lead Scoring + Lead Nurturing
When our firm first engages with a prospective client, it’s not uncommon for us to hear them say something like, “I need help with my lead management process. Can your firm help me create a lead scoring and nurturing program?”
While lead scoring and nurturing are important components of the lead management process, they certainly don’t constitute the whole. To focus solely on these two parts would be akin to replacing only one tire on your car when all four are worn down.
When developing a lead management process, there are six key areas that should be taken into account. At The Annuitas Group, we’ve defined this as the Lead Management FrameworkTM . This framework consists of the following components:
- Lead Planning
- Lead Qualification (Includes lead scoring)
- Lead Routing
- Lead Nurturing
We use the term 'framework' to describe the conjoined nature of these components. Getting back to the tire analogy, to address only one of the components would be like replacing just one tire when all four are bad. You can still drive the car, but the fuel efficiency is going to be significantly lower than hoped for. In the same way, improving only one or two of the lead management components will not lead to significant marketing and sales effectiveness. Instead, lead management must be looked at holistically. Building out this framework in its entirety will provide a solid foundation and yield the best results.
Myth #4: I Have a Solid Lead Generation Engine, So I Don’t Need To Worry About Lead Management
As referenced at the beginning of this post, the B2B buyer is now more empowered than ever before. Their self directed path to buying has changed significantly. The most notable change in this path is that sales interaction comes at the end of the buying cycle instead of at the beginning. In addition, buyers are now demanding one-to-one communication as they drive their own buying experience. It is incumbent on organizations to engage in this one-to-one dialogue if they want to win over the buyer.
Since this is the case, having rock solid lead generation campaigns, i.e. filling the top of the funnel, only serves to begin the dialogue with the buyer. True success comes from also having the ability to manage the relationship all the way through the buying process, i.e. lead management. Most B2B companies fail in this area.
It has been estimated by Gartner that up to 70% of leads generated by a campaign do not get the proper follow-up. Ignoring these leads by not having effective lead management doesn’t just limit potential marketing ROI, it actually costs an organization money.
Myth #5: My Executive Team Would Never Sign-Off On a Lead Management Initiative
In situations where executives have said 'no' to a lead management initiative, it’s often because the initiative is presented as just another program. In the minds of many executives, a new program = new expense. With the economic turbulence over the recent years, executives want to know how to generate revenue, and cut expenses. However, initiatives that can focus on generating revenue have a better chance of getting funded. In other words, lead management should be presented as an initiative that will generate revenue.
This scenario occurred with one of our clients. The VP of marketing didn’t see the wisdom in spending money on the initiative. Here was the response that we helped our client provide:
The lack of lead follow up is having a significant effect on sales productivity and overall revenue. Gartner reports that 70% of all sales leads are never acted upon. In addition, they report that 45% of the leads a company receives will eventually buy that company’s product or service, but not necessarily from that company.
Applying these percentages to the qualified lead totals generates the following:
- Total Leads/Responses Generated in 1-Month: 3,510
- 20% are qualified: 702
- Leads not followed up on (70%): 491
- Of the leads not followed up on, those that will buy(45%): 221
- Average sale amount: $100,000
- Potential unrealized sales: $22,100,000
When the executive was faced with the reality that developing a lead management process could help his organization recoup $22M in monthly sales, the approval was enthusiastically given.
Executives speak the language of revenue. By framing lead management in 'dollars and cents' language, you can make the case for its importance.
As the B2B marketplace and the B2B buyer continue to change and mature, it will be vital for organizations to develop a cohesive, holistic lead management process. Understanding truth from fiction will help companies from getting derailed, and will have a transforming affect on marketing and sales results.