In software technology companies, which is the market my company, Leap Analytix, serves, the number one priority for CMOs is maximizing LTR (lead to revenue conversion), in an environment where that is becoming more and more difficult. New demand for accountability, increased marketing complexity, plus a shift in power to the customer have all created new challenges for CMOs. In response, solutions for marketing automation have cropped up in the marketplace in recent years, each claiming to be the answer for demand generation and lead management.
According to industry experts, marketing automation is now a mainstream necessity – a “silver bullet” for CMOs looking for the benefits of automated campaign execution. And it has fulfilled its fundamental promise of improving both the speed and accuracy of executing campaigns. MA solutions, coupled with internal CRM solutions, have simplified communications in a way that is single-sourced, measurable, and centralized. It has become easier to reach out, has given companies a common platform to determine campaign effectiveness, and, along with investments in social media, has allowed marketing to be “always on.” It has provided a systematic way to nurture “buyers” towards a sales-ready state. Seeing this, software technology companies, like many others, made major investments in software and implementation, and put MA into practice with high hopes for greater quality sales opportunities and increased LTR conversions.
As a demand generation company, we talk regularly with the CMOs and top marketing executives of software and technology companies. In the past few years, many of them have adopted MA solutions. Those who have, consistently tell us that, despite new efficiencies in the execution of campaigns and increases in the numbers of inquiries, they have not seen an appreciable lift in LTR conversion rates. In fact, some of our clients are already on their second-generation MA solution, hoping to find the remedy in updated software. We believe, however, that the real reason for the disappointing results in LTR has little to do with the technology, but much to do with differences in the type of sales cycle, and here’s why.
While MA works well for transactional sales, in the complex world of software technology sales, with ERP or other enterprise solutions, the standard MA model doesn’t align. These prospects have different buying behaviors from the typical B2B transaction. Software technology sales are characterized by an extended and complex buying cycle, with multiple contacts and multiple solutions spanning multiple industries. What sales people in this market have traditionally needed, and still need, is the kind of deep-dive, insider intelligence, gathered from multiple contacts, that MA doesn’t provide. We call that “ground level intelligence” and it’s not something that you can get without a conversation.
The paradox of marketing automation is that it may be obscuring true insight into your prospects’ real buying propensity.
In his book, The Sum of All Fears, Tom Clancy said, “You cannot convert the absence of information into a conclusion.” In the high tech B2B market, what drives purchases are business cycles, not clicks-through on marketing campaigns. It is this business cycle insight that is the “absence of information” in the MA model. MA solutions rate the prospects’ buying propensity using programmed algorithms that combine fixed criteria (i.e. size of company, title of contact) with responder activity, such as clicks-through to online offers, number of pages visited, and other implied indicators of interest. This is certainly valuable information, but it is not enough. It doesn’t tell you where the responder is in the buying cycle or what’s driving the initiative to respond. In practice, we’ve found that about 80% of responders are not in the buying cycle. They’re just kicking tires – doing research or gathering information. To find ground level intelligence on business drivers, you need to have ground level conversations with decision makers. That’s where teleprospecting creates real value and why it should be a cornerstone of your overall lead generation funnel.
Sirius Decisions, in its new version of the demand generation waterfall (released in May 2012), re-emphasized the importance of the role teleprospecting plays in creating demand. To quote Tony Jaros, SVP Research at Sirius Decisions, “If you take a look at the phases between inquiry and the status of Marketing Qualified Lead (MQL) that occur right now, there are two things happening: Number one is some sort of system generated qualification, and number two is some sort of telequalification,” he said. “Telequalification is more important than ever.” [i]
A personal conversation with your prospect can tell you what’s happening with their business drivers, their propensity to purchase, latent needs, other interested stakeholders, and internal politics or agenda. Every conversation, with every stakeholder, builds on this intelligence. If you make it part of your sales lead acceptance process, this information will not only improve the quality of marketing qualified leads (MQL) but will increase the rate of acceptance of those leads by sales. In other words, when you leverage teleprospecting, you deliver actionable ground level intelligence, which, in turn, creates value and fosters a closer alignment with sales. As an added benefit, teleprospecting can supply unexpected insights to marketing on how to improve demand generation and nurturing efforts. As a result, teleprospecting, together with marketing automation, creates a holistic process that builds on itself, drives optimization of the sales process, and ultimately, generates increased LTR conversions.
In upcoming blog posts, we will explore topics like the real statistics in responder analytics (based on a 40,000 responder data pool), the advantages of benchmarking inside sales performance and how to do that, and using teleprospecting to drive marketing strategies.
We’d love your insights and encourage you to share your experience with both marketing automation solutions and teleprospecting in your comments.
Jeff Drilling, CEO, Leap Analytix LLC
How does teleprospecting fit into your demand generation strategy?
Next blog: The Real Statistics in Responder Analytics – a Case Study