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May

16

2016

The 5 Most Common Mistakes Made By Veteran Inbound Marketers

ThinkstockPhotos-505619436-119666-edited.jpgAs a part of our process of determining how we will work with clients, we typically conduct an assessment of their overall demand generation strategy and execution. We look at what they’re doing to generate and nurture leads, how they’re utilizing their website and other digital (and non-digital) communication channels and how that all aligns with and connects to their sales approach.

For those that have not implemented inbound marketing or sales development initiatives, it provides an opportunity to create a clear roadmap to determine what issues, if any, need to be addressed; how to best address them, and what the quickest path to impact would be.

For companies that have been implementing one or both of these approaches, it’s an opportunity for a nice check-up to identify opportunities to enhance their efforts.

It’s no surprise given the increasing popularity and maturity of inbound marketing that an increasing percentage of these assessments are taking place with companies that actively engage in inbound efforts.

Over the last couple of months, we’ve conducted several assessments with companies that have been engaged in inbound marketing for at least three years, with some that have been doing so for as long as six. In all of these cases, these companies were getting good results, but had found that these results were plateauing or declining.

In the process of reviewing their efforts, we identified some common themes that are contributing to declining results, despite continued investment. As one of our clients said entering into the assessment, “We wonder if we’ve gotten everything we can get from our inbound efforts, and if it’s time to find something else.”

My sense is that she is not alone. I’m increasingly hearing the grumbles of frustration from inbound practitioners. The early (and easy) results from being one of few have disappeared and the playing field is noisier than ever. If you’re finding your results plateauing, be sure that you’re not falling victim to one of these themes.

1) Buyer Personas

I have to admit that this one surprised me. I’m used to talking about buyer personas with companies that aren’t implementing inbound. I figured that for multi-year veterans, personas would be a given. The group that we assessed fell into two groups on this issue:

  • They did not have written personas.
  • The written personas they had were vague and had fallen out of date.

I get it, creating personas is hard. Keeping them up-to-date is even harder. But they are absolutely crucial if you want to gain and maintain traction.

Creating personas requires more than just a couple of conversations and writing out a paragraph or two describing who they are. Effective personas combine two elements: a clear ideal client profile and an in-depth review of the key people you want to talk with.

When we create personas for our clients, we work to identify three types of personas:

  • Primary personas: These are the decision makers or key players involved in your sale.
  • Secondary personas: These are the people who may or may not be directly involved in a sales/buying process, but elicit significant influence.
  • Negative personas: These are the people who you want to be sure are not in a lead position when dealing with your solutions. For example, we worked with a company that sold HR information systems and in their case, the IT manager was the negative persona. If the interaction was perceived as an IT issue, rather than an HR issue, it represented problems for their efforts.

Regardless of how you create personas, the objective should be to clearly define:

  • What the clear identifiers are for each persona.
  • The challenges they deal with (from their perspective).
  • Their priorities.
  • Their experience in dealing with your products/services.
  • The important questions they seek to answer on an ongoing basis.

When completed, it’s easy to feel like you’re done with personas. Don’t make that mistake. Personas are never done. They should be constantly tweaked and updated. At a minimum, you should review your personas on an annual basis to ensure the information within them is still relevant and insightful.

2) Website

One of my favorite byproducts of talking about inbound marketing with businesses is that it naturally changes how executives think about their website. Rather than being a static, digital brochure, filled with we-do’s; the real value of the website emerges.

For anyone who has implemented a new inbound effort, you know that there’s a high probability you’ll make significant changes or even completely redesign your site to support the effort.

As with personas, the danger is when you feel like you’re done with your website. A common theme we’ve seen with inbound veterans is that they fall back on old habits with their website.

As their companies and offerings evolved, they continued to add material to the website, without thinking about the strategy behind what they were doing. As a result, the sites became quite complicated and confusing.

We could see by looking at how the site was originally crafted that many best practices were supported. The layout was clean. The conversion paths were clear. But over time, the site became overloaded and confusing.

Please note, I am in no way saying that you shouldn’t change your website. Quite the contrary. You must be constantly making changes to your website. If you’re not changing something that matters on at least a monthly basis, you’re not doing enough.

It’s how you manage the changes that are important. Today, when considering how to manage your website going forward, you must build it with the assumption that it’s going to be constantly changing. You’ll want to test and adjust layouts, colors, and design elements; not to mention all of the changes you’ll need to make as your company and offerings evolve. That doesn’t mean your site should become the digital equivalent of a Rube Goldberg device.

Remember the battle cry of your website visitor:  Don’t Make Me Think!  

3) Content Not Aligned With Buyer’s Journey

If you’re looking to continually gain traction and enhance results of your inbound efforts, you must embrace the fact that the relationship with your website and your visitors needs to be highly personalized. That means the message on every page must align with the person visiting – their persona and where they are in their journey.

One of my favorite tools for managing website content is what we call a content map. This map is a spreadsheet that lists every material page and asset (site pages, blogs, landing pages, graphics and CTAs) and identifies:

  • Which persona(s) it is built for
  • Which stage of the buyer’s journey it’s targeted to
  • What questions it’s designed to answer or actions it’s designed to stimulate
  • What device (mobile/desktop) the visitor is most likely to be using

When content is mapped in such a manner, you can be sure that you are addressing the important points on your visitors’ minds, and you’ll have the data you need to lead them through a well thought out conversion path.

4) Poor Nurturing Strategy

Inbound marketing is not a quick fix. Too often I see people utilizing inbound strategies to generate leads and then apply old school sales tactics to a bunch of people who aren’t ready or in a position to buy anything. Then they complain that inbound doesn’t work.

Our assessments were no exception. Effective content gives you the advantage to be relevant to your market before they’re in the market to buy. This is a HUGE advantage, if only you capitalize on it.

Noted marketing expert Seth Godin often talks about how attention from your desired market is the most valuable asset any business can have (it’s too bad there’s no spot on the balance sheet to report on it). Great content is the vehicle for building that attention.

But remember that people download things for their reasons, not yours. They most often download because their seeking information or knowledge on something that matters to them, not because they want or need to buy anything.

This is where nurturing comes in. An effective lead nurturing strategy cultivates the attention you’ve created, leads them to understand their problems better and highlights the value you create for them when they engage. Done correctly nurturing accelerates the sales cycle, increasing the average sales value and increases your win rates (now that’s what I call a real Triple Crown!).

Yet despite its clear value, very few do it well (if they do it at all). Nurturing is more than just sending emails schilling your webinars and other download offers. Lead nurturing requires a well thought out plan, a high degree of personalization and the discipline to sustain.

5) Not Utilizing Data to Drive Decisions

My absolute favorite attribute of inbound marketing is the data you are able to collect and utilize to assess progress and to make decisions going forward. Yet despite the data available to them, our experience is that very few companies are actually utilizing data to drive decisions.

It is absolutely critical that you develop what we like to call data rhythms. When we’re managing an inbound program, we break metrics into weekly, monthly and quarterly checks (and certainly there are some companies that should have daily rhythms with some metrics).

On a quarterly basis, we’re using data to set our course. We think of these quarterly rhythms as waypoints on our journey for long-term scalable growth. We set our key objectives and themes, and we review and update our service level agreements (SLAs).

Every month, we use the data to track progress against those objectives. More importantly, we dig deep into the data to determine what tests or experiments we want to run. Which pages are getting good traffic, but aren’t converting?  What’s converting, but not getting traffic?  What can we learn from that?  Additionally, we’ll run experiments like testing CTAs in a different location, running an off-beat PPC test and so on.

We’re always running tests and experiments. Some of these are designed specifically to improve performance. Other times, we’re just looking to gain insights. We may move a CTA, or where some key content is, so that we can watch how people interact. We then use that knowledge to drive other decisions.

On a weekly basis we’re watching for emerging trends and seeing how experiments are playing out. Not a week goes by that we aren’t tweaking or adjusting something that was done previously.

By taking such an approach we are able to truly capitalize on the fundamental value of inbound marketing. Every day, week and month we are building our marketing asset and optimizing performance.

By looking to constantly iterate and continuously make small progress, we build significant advances over time and avoid the plateaus and pitfalls associated with other approaches.

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Jan

7

2016

The Executive’s Guide to Effective Lead Nurturing Programs

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Let’s start with some scary stats. According to SiriusDecisions 98% of MQLs never result in closed business. Additionally, 54% of sales reps won’t make quota. All this despite record investments in marketing automation and sales enablement tools.

Now consider that the top priority among B2B marketers is increasing the number of contacts/leads generated (Source, State of Inbound 2015). Of course, a close second priority is converting contacts/leads into customers. Over the last five years, I’ve seen the focus on lead generation increase significantly among small and mid-market businesses (SMEs). As recently as 2013, I would regularly engage executives who had reached out to me to discuss a sales problem in an effort to teach them that the cause of their sales problem was how they were (or more accurately weren’t) generating leads. Today I get to do much less teaching as more and more executives have increased their focus on lead generation.

While the focus on lead generation is great, there’s a huge difference between generating leads and creating bona fide sales ready leads that predictably turn into profitable customers. Simply look at the search difference between “lead generation” and “lead nurturing” and you’ll quickly see what I’m talking about. 

So, while lead generation is certainly important, investing in generating more leads without building an effective lead management process is simply, well, foolish.

What Is Lead Nurturing & Why Is It So Important

Now let’s look at some exciting stats:

I could go on.

Lead nurturing is the purposeful process of engaging a defined target group by providing relevant information at each stage of the buyer’s journey, positioning your company as the best (and safest) choice to enable them to achieve their objectives.

An effective nurturing process actively moves the prospects you’ve created through your marketing and lead generation efforts, through a sales development process to the point where they become paying customers. Lead nurturing utilizes both marketing and sales tactics to increase the predictability and velocity of revenue growth.

lead-nurturing-process.png

It should be noted that nurturing is far more involved than sending blast emails or monthly (or weekly) newsletters. Nurturing is more purposeful, following a clearly delineated process.

  • Educate: In the beginning, a lead nurturing process focuses on educating customers and delivering your commercial teaching point-of-view.
  • Inform: Teach your prospects how to make better decisions and advance their initiatives.
  • Engage: By sharing relevant content, gain the engagement of your prospect and begin the conversation.
  • Convert: Be clear about how your prospects can engage with you and how to start.

Types of Lead Nurturing

Lead nurturing is not a one-size-fits-all strategy. There are many types of nurturing programs geared to fit your prospects’ situations and your objectives. We’ve identified three types of programs that apply to the vast majority of situations.

  1. Engagement programs work to keep your leads engaged with your business by offering credible, straight-forward and uncomplicated content that is relevant to them and keeps their interest.
  2. Education programs challenge your leads to consider the benefits of your products or services and provide unique insights to how they can do their job better and more effectively.
  3. Active funnel programs are focused on leads that have actively entered their buyer’s journey. These campaigns are where the rubber meets the road…where marketing and sales must work in complete alignment to bring your work to the final goal – a paying customer.

Each of these programs have various types of campaigns that should be developed to meet the various objectives you have and to align with the context of your prospects.

How to Create Effective Campaigns

Here is the step-by-step process we use when creating lead nurturing programs for our clients:

Define buyer personas.

Understanding who it is you’re trying to reach provides a tremendous marketing and sales advantage. Creating buyer personas takes time, but once complete they focus and leverage your efforts. You simply cannot have consistently effective nurturing programs without clearly defined personas.

Progressive profiling.

The ability to gather information about the people visiting your website and downloading your content has never been easier. Through progressive profiling, your business is able to gather the right information about your leads to further focus your message and increase qualified conversation rates.

Create relevant content.

According to a recent study by the Content Marketing Institute and MarketingProfs, 70% of companies are producing more content than they were a year ago. Creating content isn’t enough. You must create relevant content. Here are some tips to make that a reality.

  • Know your audience
  • Consider the buyer’s journey
  • Set a conversational tone
  • Keep it simple
  • Personalize your content

Decide what programs to implement.

As you decide, consider these questions.

  • Which lead nurturing campaign(s) best fit your business needs?
  • Do you have the “people” capabilities to effectively execute the campaign?
  • What is still needed to make the campaign successful?
  • Do you have the appropriate systems in place to support the chosen campaign(s)?

Establish clear goals.

Before you begin any lead nurturing campaign you need to clearly define goals so you know what is considered “success”. Without clear objectives of what you are trying to accomplish with your lead nurturing campaigns you will never know if you’re seeing success are not. Goals can be as simple as “X% open rate and X% click-through-rate” or “X% conversion”. These are completely up to you but need to be established up front.

Test, measure and adjust.

Never stop testing and learning what resonates best with your buyer persona. Use every touch point as an opportunity to A/B test, whether it be emails or landing pages, or something else entirely. You want to test items such as image or headline, positioning of the form on the page, or email subject line. By doing so you can see what brings you closer to your established goals.

Bringing it all Together

Effective lead nurturing can have a lasting and profound effect of your business’ success. The ability to create and manage a successful program requires dedicated people, a powerful and strategic approach, solid technology and a good process that aligns actions from the beginning to the end.

While the effort is certainly significant, the reward is well worth it.

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Nov

30

2015

Why You Should Invest In Inbound Marketing Before CRM Implementation

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Since the beginning of time, humanity has sought to answer unanswerable questions, like which came first, the chicken or the egg?  Recently, I’ve come across a question with increasing frequency, that may not be as significant, but is probably even more important if you’re looking to embark upon a journey of accelerated sales growth.

What should you focus on first, building an effective inbound marketing/lead generation process or implementing a CRM to manage your sales and customer acquisition process?  While both are important, the question is should you focus on one before the other? 

To be clear, both are very important to making growth predictable, sustainable and scalable. If you have the resources and bandwidth you should be pursuing and enhancing both of them simultaneously. However, if you must choose between them, the decision you make will have a significant impact on your growth outlook.

Before answering the question, let’s take a look at the fundamental purpose of each initiative.

The Purpose of CRM

There are several advantages of an effective CRM system with the primary purposes being:

  • Building sales efficiency
  • Providing management insight into the status and progress of the overall sales effort
  • Ensuring compliance with the sales process
  • Providing clear reporting
  • Creating greater predictability throughout the entire sales process

The Purpose of an Inbound Marketing Program

Here too, there are lots of reasons you’d want to embark on an inbound marketing effort, with the primary purposes being:

  • Generating greater awareness and engagement with your desired markets
  • Standing out from your competition by creating and reinforcing relevant thought leadership
  • Increasing lead velocity and generating more sales qualified opportunities for the organization

To reiterate, all of these results are very important, but I think it’s pretty clear which initiative should be focused on first. That is Inbound Marketing.

3 Reasons Why You Should Focus on Inbound Efforts First 

1) CRM Doesn’t Fix Bad Processes, But Inbound Can

An effective CRM system provides tremendous value in increasing the efficiency of a good process. However, it does nothing to address an average or poor process.

For more than 20 years I’ve been working with companies looking to improve their results through CRM utilization. All too frequently significant investments are made in software, time is spent training on the system and absolutely nothing changes. The initial reaction is to blame it on bad CRM, when the reality is that it’s bad process that is the real culprit. Designing a CRM system effectively requires that you have a clear and effective demand generation process that can be mapped to the CRM.

While working on the CRM does little to address bad sales process, the process of implementing an inbound marketing approach does a tremendous amount to improve your sales process (and thus your CRM efforts).

Inbound marketing requires that you start at the top of the funnel and work your way through to the bottom. It makes you view demand and revenue generation from a holistic viewpoint, to understand your market better and to align your sales efforts to how your market behaves today. All of these things drive greater revenue opportunities and create the path to gain the very efficiencies that CRMs promise to create.

2) Effective Inbound Methodology Creates Better CRM Application

I deal with a lot of companies that have been using CRM for years. It is a rare event for me to come across someone who has either designed or implemented their CRM effectively. The data is, to put it bluntly, 90% crap.

A tremendous amount of the value you get from using a CRM comes from the ability to slice and dice the data to segment effectively and increase personalization. However, if you haven’t done the basic work of defining your buyer personas, designing the message to enable you to personalize and to determine how you are going to effectively nurture, you won’t have the clarity to use your CRM effectively.

In my experience, effective CRM reinforces an effective inbound marketing and sales approach, it does not create one. I’ve lost count of the number of times a client has had to substantially change their CRM as a result of the creation of an effective inbound marketing strategy.

3) You Cannot Have Predictable Growth Without Predictable Lead Generation

If I were to summarize the two most valuable benefits of a CRM it would be predictability and efficiency. As I’ve shared, inbound marketing creates the environment for an efficient process, but what about creating predictability?

Simply put, you cannot have predictable sales results or predictable growth if you do not first have predictable lead generation. While creating an effective lead generation strategy certainly involves more than just inbound marketing, inbound is a crucial component.

Inbound marketing enables you to build a true funnel that allows you to build a predictable pipeline for growth.  Consider the following:

The natural focus of building engagement that is created by fully adopting an inbound marketing approach builds a more efficient and effective sales process and make CRM adoption a much easier, more profitable effort.

Additionally, a major benefit of inbound marketing is that it creates revenue. No matter how you slice it, CRM is a cost (a valuable one, but a cost nonetheless). Building an effective revenue generation process creates the environment that allows efficiency and predictability to be sustainable.

Investing the time, money and energy into inbound marketing first, puts you in a stronger position to both implement an effective CRM initiative and to accelerate growth.

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Oct

28

2015

How to Create an Effective Sales and Marketing SLA

The alignment of an organization’s sales and marketing efforts is a crucial strategic imperative for companies that desire sustainable growth. Despite the evidence of improved business performance, it’s still a rarity to find an organization that has and maintains full alignment. The good news is that the issue is getting far more attention than ever before, and more organizations are making progress.

A major cause for the overall lack of progress is that while the issue of alignment is getting more strategic attention from executives, it’s still getting very little focus in terms of tactical and structural changes that need to be made within an organization to sustain the goal.

While talk and will power can improve results in the short run, structural change is required to sustain the effort and to gain the benefits of such a pursuit. It is for this reason that the development of a documented service level agreement (SLA) between sales and marketing is so important.

HubSpot’s 2015 State of Inbound Marketing report highlighted three compelling advantages for companies that maintain their SLA:

  • Companies with an active SLA are 34% more likely to experience greater year-over-year ROI than those companies that aren’t.
  • They’re 21% more likely to get greater budget allocations.
  • They’re 31% more likely to be hiring additional salespeople to meet demand.

Why SLAs Are So Important

Having been involved in creating many SLAs (for both my company and with clients) I can attest to the fact that while creating them can be difficult (they require a lot of thinking and working through details), the impact is significant. It is said that great communication is communicating not so that you can be understood, but so that you cannot be misunderstood. SLAs make that possible.

It is also said that Wwhat gets measured gets done, and what gets measured and monitored gets done faster. An SLA formalizes the measurement and monitoring processes that ensure progress and results.

Creating An Effective Sales & Marketing SLA

The process starts by bringing together the leaders of all disciplines into the same room to discuss roles, responsibilities, process, targets and accountability. At a minimum, a marketing and a sales leader need to be involved. As the sales development role continues to mature and grow, the leader of that group should be involved as well.

1) Defining Your Buyer Personas/Ideal Client Profile

As with everything else in your demand generation process, your service level agreement starts by clearly defining and communicating the criteria for who you are trying to attract. The more specific and clear the definition is, the better.

When you shortcut this step (and many organizations do) you leave far too much open to the interpretation of individuals. Let’s face it, salespeople and marketers are naturally opportunistic. Without formalizing, your profile definitions will drift and your demand generation process will get bogged down.

2) Standardize Lead Definitions

I regularly assess sales development and sales processes. One of the first questions I ask is to define what a lead is, and, further, to define each stage of an organization’s funnel. The answers almost always start with, “Well, uhm, well that’s a, uhm, good question. You see it kind of depends…”

At a minimum you must clearly define what qualified, marketing qualified and sales qualified leads are. This will force the participants to get into the minutia, but it’s critical to make your process scalable and sustainable.

3) Set Clear Goals

When setting goals, you should consider the maturity/ramp up of your team members and functional areas, past results and lead generation drivers. This is not the time to pull numbers out of the air and to make them motivating. Your goals must be based on real life situations.

The marketing team (and, if you have one, the sales development team) should be assigned goals around how many leads should be sourced, targets for each phase of the funnel and how many sales qualified leads (SQLs) should be turned over to the sales team.

All teams that are party to the SLA should meet every month to review results and update goals.

4) Define How The Handoff Occurs

Increasing lead velocity is truly a team effort. The handoff is a place where otherwise excellent demand generation processes blow up. You must determine if and how your SDRs will specialize, what determines when a lead is moved to that team and how leads are then handed off to the new sales team.

This is why you must have clear lead definitions. Without them your team will be dealing with too much ambiguity to sustain alignment and growth.

5) Establish Protocols For Managing Leads

The biggest, most common complaint I hear from salespeople and marketers is that the other group doesn’t know how to manage leads. This is the section of the SLA that eliminates that concern.

Clearly lay out how a lead should be treated – when, how often and how many times they should be “touched.” Closing the loop is also important. How should a sales accepted lead be reported as well as a sales rejected lead. Closed loop reporting is crucial to improving your processes.

6) Track, Measure & Assess Performance Metrics

Your SLA should clearly define the key performance indicators everybody will use to assess the progress and effectiveness of your demand generation processes. Tracking should be used to highlight performance issues/opportunities with individual contributors and to highlight and accelerate learning so that everyone is always improving.

7) Standardize the SLA Review Process

Determine the period of time that you will conduct a comprehensive review of the assumptions, processes and targets laid out in your SLA. For most companies a review of the SLA every six months is sufficient. For high-growth companies, we recommend reviewing quarterly.

Creating an SLA is a challenging task but one that is well worth the effort.  Clearly defining and communicating the expectations of your sales and marketing teams will go a long way in helping to meet or exceed the revenue goals you have established. 

SLA

Jun

30

2015

The Key to Driving Consistent Growth: Understanding Costs

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I have a confession to make. I’m a revenue (sales) guy. I can think about, conceive and vision growth opportunities without even trying. On the other hand, thinking about (and understanding) costs doesn’t come so easily to me.

I’ve learned that understanding your costs is crucial to creating profitable revenue consistently, sustainably and scalably. Unfortunately, very few small and mid-sized companies understand their sales cost structure well enough.

This creates two potential problems (one obvious and one not-so-obvious):

  1. If your costs are too high, you’ll struggle to grow profitably and your very sustainability will be threatened.
  2. If your costs are too low, you may very well struggle to gain the momentum and velocity you need to break through the noise, separate yourself from your competition and achieve your sales growth goals.

An important metric to understand is customer acquisition cost (CAC). While this metric is very common with SaaS companies, my experience is that it doesn’t get the attention it deserves in other industries. It’s important that you understand your CAC, the contributors to CAC and the model you’re implementing to manage it.

With a clear understanding, you can ensure that you are investing wisely in growth. A lack of understanding makes it impossible to determine the effectiveness of your sales and marketing efforts. In this post, I outline the process we recommend for building out your sales cost model and how to monitor its effectiveness alongside your sales and marketing investments.

Calculating CAC

Determining your customer acquisition cost is a relatively simple calculation. You calculate it by dividing the total costs associated with generating new customers by the number of new customers you gained in a specific period of time.

When determining your costs, only include the costs associated with getting new customers. Do not include the costs of retaining or servicing them. If you’ve got salespeople who have responsibilities for both, you must prorate those expenses according to how they spend their time. The same is true for any technology or other sales and marketing overhead.

Here’s a sample calculation based on one year (note: you can run this calculation for any period of time, but for this post every example is based upon one year):

CAC-Cost-Sample-1 

In this case, it cost this company just under $20,000 to acquire each of their 17 new customers. But, here’s the unanswered question: is that good or bad? Did this company spend too much to get their customers, or could they have benefitted from investing more?

Determining Where Your Costs Should Be

To answer that question, you need to determine what your target CAC% is. Calculating target CAC% is done by dividing your CAC by the average lifetime value of a customer. Average lifetime value simply measures how much money a customer contributes to your business over the lifetime that they are with you.

To determine lifetime value, we recommend using a variation of gross profit in the calculation. The variation is determined by taking the value of the sale and reducing it to only the non-sales, direct costs of what is being sold.

Let’s go back to our example. In this case, our sample manufacturing/distribution company earns an average gross profit of $24,000 per customer per year, and their average customer lifetime is 3.5 years. So the lifetime value of the typical customer is $84,000 and the CAC% is 23.5% (calculated by dividing their CAC (19,702.94) by their average lifetime value ($84,000)).

The next step in the process varies depending on several factors, such as the type of business you’re in, your revenue model and how aggressively you’re growing. Most sales and marketing benchmarks recommend that CAC be targeted between 20% and 35% for growth businesses.

As a general rule, here are some key contributors to determine where on the range yours should be:

CAC-Cost-Continuum 

As a side note, if you’re a very young business you should often go above these norms.

Given the nature of their business, our sample company is in a reasonable range. However, one could make the argument that if they invested more in customer acquisition, they’d be able to grow faster and more profitably.

The next step in this process will determine whether that argument can be won.

Establishing Your Optimum Lead Generation Model

One of the most common mistakes I see companies making that aren’t growing at the sustained rate they desire is they’re not allocating enough resources towards the top and middle of the funnel (the lead generation and lead management functions).

To be able to clearly answer the question about the effectiveness and sustainability of your effort, you must dig deeper into the CAC numbers and determine which parts of the process are your costs being allocated. A simple model to use is:

  • Lead Acquisition Costs Percentage – what percentage of your customer acquisition costs are allocated to create sales qualified leads (SQL).
  • Sales Acquisition Costs Percentage – what percentage of your customer acquisition costs are allocated to support the new-sales process.

Let’s go back to our sample manufacturing/distribution company and see how it stands up. By using the same numbers as we did to determine the overall CAC but changing the % allocated column to reflect the percentage of costs that go towards creating an SQL, we can determine the cost per SQL.

CAC-Percentage-Sample 

Now we’re quickly able to see that less than 10% of their acquisition costs are geared to support lead generation, and more than 90% go to supporting the actual sales process. This is a formula for stagnation.

Knowing the company that this data is based upon, they’re challenged because they feel that their sales team is at capacity and they’re still not getting the growth results they want. They would be far better off allocating more money toward the top and middle of the funnel to create more sales qualified leads and/or to improve the quality and readiness of those leads when they get into the hands of the sales team.

Here again determining how much money you should invest in the lead generation efforts is highly influenced by the business you’re in and the model you’re using. We recommend that anywhere between 25% and 60% of your CAC be allocated to the creation of SQLs. The following items will help determine how to split your acquisition costs between lead generation and sales:

  • How complex is your sale?

The more complex the sale, the more you’ll want to allocate towards the sales process, and therefore be on the lower end of the scale. Don’t make the mistake, however, of under-allocating resources towards lead generation, nurturing and conversion.

  • What’s the value of the sale?

A higher value sale will often allocate more towards the sales process and a smaller percent towards lead management.

If you don’t, you should consider one. This would put you towards the middle or even upper band of the lead cost percentage continuum.

  • How much of the sale do you want done before it gets in the hands of a salesperson?

A growing trend in the world is empowering the customer to do more of the sale on their own so that when they get to your new-sales team, they’re better educated and ready. This would mean you’d allocate more of your CAC towards lead management.

The Benefits of Allocating More Resources to Lead Generation

When more money is allocated towards lead generation and management, your sales process becomes much more efficient and effective. You’re able to increase the volume and velocity of your lead generation, thus enabling you to increase the average sale value and your closing ratio. Research shows that companies that manage leads well enjoy 50% more sales ready leads (Forrester Research) that make 48% larger purchases (The Annuitas Group).

Up to this point I’ve been highlighting how to calculate and use this data when looking at the results of your efforts. This data is equally important when planning for the future. Determining what you can and should invest in each part of the revenue generation process is valuable when determining the tactics you will use, how you will implement them and how you’ll track your progress.

We call these numbers your target costs. To determine this we created The SQL Target Cost Calculator. Now let’s go back to our manufacturing/distribution company and figure out how much they should be allocating towards creating SQLs (for where they are now and what they should do to drive better results). 

SQL-Cost-Calculator 

Over time, as you improve and enhance your process you’ll see that your sales costs, and even acquisition costs, will decrease. While this is a strong indication of an effective process, don’t make the mistake of under-allocating resources as you may kill the very momentum you worked so hard to create.

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Apr

21

2015

The Critical Role of Sales Development in Inbound Marketing

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It sounds so promising. Create compelling content (consistently). Share and promote the content. Prospects engage, download stuff and become qualified leads.

Those leads are passed on to the sales team, who instantaneously reach out and are immediately welcomed into the prospect’s world. The meeting quickly turns into a bona fide sales opportunity. Proposals are requested, immediately acted upon and sales are made.

Sure, that scenario may be a little bit overstated, but isn’t this story the fundamental promise of inbound marketing? All of the data and statistics shared by inbound marketing practitioners talk of increased lead generation, lower costs per lead and higherROIs.

The answer to the question is a qualified, “Yes.”  Inbound marketing is instrumental in building predictable, sustainable and scalable sales growth, but it does not solve the entire problem.

The Chasm Between Leads and Sales

There’s a chasm that exists between sales and marketing. While effective inbound marketing does drive a higher volume of leads and qualified leads, that doesn’t mean that these leads are sales ready when they’re created.

Additionally, the very nature of inbound means that many of the leads you create, while qualified, won’t naturally move into a buying cycle with you. Gleastner Research identified that as many as 80% of the leads you create are caused because someone was looking for valuable content to answer a question or to solve a problem… not because they wanted to buy something.

What makes the chasm so nasty is that unless you have the right tools in place to manage and measure it, it is invisible to most executives. They can see that leads are being created, and they can see that the investment isn’t translating into high volume sales success. The phenomena is the primary reason that research done by CEB found that 87% of the words used by sales and marketing professionals in one discipline to describe the other are negative.

This chasm has two adverse consequences:

  • The marketing function is often undervalued (or even overlooked), put off to the side to work on case studies, trade shows and “arts and crafts.”
  • Far too much of the weight and pressure falls on the sales team. This was fine years ago when prospects needed to talk with sales people, differences between offers were clear and life was much simpler. Today, the world of sales is simply too complex to be left to the sales team alone.

Sales Development Is The Answer

Here’s the truth about inbound leads: they’re not ready to buy. I recently heard someone describe the value of inbound marketing as:

Rather than you having to go out and interrupt people with your message, the people who you want to do business with will find you. Because they download something you know they’re interested and they’re highly likely to buy from you.

The only truthful part of that statement is the first sentence. Inbound means you can stop using interruption as your primary lead generation tactic. But, the vast majority of inbound leads are not ready to buy, and when they get turned over to the sales team as if they are, bad things happen.

Sales development is the discipline that ensures that leads (of all types) are managed effectively. Your sales team stays focused on their highest value actions – managing and winning new sales.

What is sales development? Trish Bertuzzi, found of The Bridge Group, defines it as the combination of data analysis tools, email nurturing and phone prospecting teams in a specialized role that is exclusively focused on creating sales qualified leads and preparing them for new sales people.

The sales development discipline is the missing piece that ensures alignment between marketing and sales. By properly managing marketing qualified leads (MQLs) and giving the personalized attention to move prospects through the funnel to maximize conversion opportunities, sales development bridges the chasm.

The Need for a Third Discipline

Sales Development and Inbound Marketing are (or should be) kindred spirits. They both rely on data, process and clarity to be successful. They’re designed to work the way customers manage decisions today and reinforce one another.

I’m often asked which function should be in charge of sales development and my answer is neither sales nor marketing. Instead the third discipline of Sales Development should get its own leader.

In my experience, the challenge is that both the inbound and sales development functions fall between the disciplines of sales and marketing. What typically happens is that inbound falls under the marketing department because it has the word “marketing” in it, and sales development falls under sales’ umbrella for the same reason.

The trouble is that the very alignment that was supposed to be created falls apart with the split, and in most organizations the functions take a secondary role to “core” marketing or sales issues.

Certainly both marketing and sales have responsibility for revenue growth. However they approach the issue from very different mindsets. Marketing tends to view things from a long-term, rules driven mindset; while sales tends to view the world from a shorter-term, opportunistic perspective. Managed effectively, this creates great opportunity.

The sales development perspective (of which I think inbound is a subset of) creates a completely different mindset. The sole focus of sales development is generating an increasing flow of qualified leads, and nurturing and preparing those leads for sales as quickly and effectively as possible. Marketing has more on its plate than just generating leads, and sales must be maniacally focused on “hitting the number.”

Companies that raise the sales development discipline to the same level as marketing and sales gain a tremendous advantage over those companies that don’t. They gain greater traction, learn and evolve faster and sustain faster growth rates.

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Mar

30

2015

How to Diagnose Your Funnel to Create Predictable Growth

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If I’ve learned one thing about companies and organizations that enjoy consistent growth, it’s that they’re maniacal about monitoring their data and numbers. They’re clear on what has to happen to achieve their goals.  In contrast, companies that don’t experience consistent, predictable growth also do not have clarity of their funnel metrics.

So, the first step to creating predictability is to define, measure and track your funnel. In its simplest form (and the reality is that no matter how complex you make you measurement system, it still boils down to this), there are three phases of your funnel that need to be measured:

  1. The top of the funnel, where the focus is on traffic.
  2. The middle of the funnel, where the focus is on lead conversion.
  3. The bottom of the funnel, where the focus is on sales and revenue.

The benefit of tracking your go-to-market efforts in such a manner is that you can diagnose problems often before they have a negative impact on your revenue results.

From this perspective, there are only eight scenarios that you could be facing. Each scenario has its own set of opportunities and dangers.  By identifying which scenario applies to you, you can then initiate specific actions with confidence.

The 8 Conditions of a Marketing & Sales Funnel

When measuring these conditions, it’s important to note that strong or weak are relative terms. The goal behind this effort is to build a structural approach to growth.  It’s not about just making a sale today, or even growing this year. It’s about being able to do so predictably, sustainably and scalably.

If you don’t have clear targets for traffic, conversion and sales, you’ll need to develop them before you can make an assessment.  For help, you can review our recent post on The 9 Metrics You Must Be Tracking to Scale B2B Sales or use our lead generation calculator.

1) Strong Traffic, Strong Conversion, Strong Sales

This is the condition that everyone strives for.  Your top, middle and bottom of the funnel are all dialed in producing the results you need to maintain your growth rate.  When you find yourself here, your primary job is to develop the early warning systems to alert you to a changing condition (oh yeah, and don’t forget to celebrate a little).

2) Weak Traffic, Strong Conversion, Strong Sales

In this scenario, you’re generating an adequate number of leads, and you’re meeting your sales targets; but you’re not driving new visits to your site and the top of your funnel is weak.  The danger here is that maintaining (let alone accelerating) your growth rate will be very difficult.

Here are the three most important actions to take in this situation:

  • Put more focus on the top of the funnel. You can do this by increasing the rate at which you are creating new content (like blogs), by ensuring your website is properly optimized or by encouraging your entire customer facing team to share your content through the appropriate channels.
  • Identify potential “kindred spirits.” These are people or organizations who share a viewpoint with you, provide complementary products/services and communicate with the same target market. Engage with these people and empower them to share your message.
  • Consider implementing a lead introductory campaign to entice targeted prospects to visit your site. It’s important to note that the focus of your campaign should be educational. If you get too salesy your efforts will backfire.

3) Strong Traffic, Weak Conversion, Strong Sales

This is a very common condition among mid-market companies and among companies that have engaged in SEO and pay-per-click (PPC) efforts.  They’re driving plenty of traffic to their website, but they’re not converting that traffic into leads.  Despite that, the company is still able to meet its sales goals.

The fundamental problem here is that far too much of the weight for making sales is falling on the sales side of the organization.  While marketing may be actively involved, creating awareness and driving traffic, those actions aren’t leading prospects to act.

If you find your company in this situation, it’s a clear symptom of misalignment between your marketing efforts and your sales efforts.  There are three underlying causes for this problem:

  • The content is not resonating with prospects.
  • The traffic is low quality, and is not attracting the right type of people.
  • The site is not designed to support the buyer’s journey and lead conversion.

Here’s what you should do in this scenario:

  • First and foremost, review your buyer personas (you have developed your buyer personas, haven’t you?) and confirm that a) the personas are accurate, and b) the content you’re creating resonates with what matters to them. 
  • Map your prospect’s journey, paying particular attention to the Epiphany Awareness and Consideration phases. Do you have the right message and are you creating the right content for each phase of the journey? If your website and marketing materials are filled with “we-do’s,” it’s a pretty good bet you’re not going to see a good conversion rate.
  • It may be time for a website refresh or redesign.  If your website isn’t built to directly support lead generation and lead management, it won’t convert. On several occasions, we’ve worked with companies who were getting plenty of traffic but little to no conversion. Within a couple weeks of a new website launch, we’ve seen conversion rates jump from under .5% to over 3%.

4) Strong Traffic, Strong Conversion, Weak Sales

In this scenario, it appears that you have a strong marketing process and a weak sales process. I see this on a fairly consistent basis with companies that implement an inbound marketing or other lead generation approach. 

Because you’re focusing on the top of the funnel and you’re generating conversion opportunities, you’re seeing your lead velocity grow; but it’s not translating to sales.

This can be the most frustrating point in the journey of generating predictable growth. You’re doing the right things by focusing on lead generation, but you’re frustrated because it’s not translating to real opportunities or sales.

The issue here is all about lead management, and there are specific actions you need to take to turn leads into sales.  Here are the highlights:

  • Use a lead triage process to assess the quality of the leads you are generating.  If you find that you’re not creating an adequate number of quality leads, then you’ve got a conversion problem.  To solve that problem, refer to the Stong/Weak/Strong scenario above.
  • If you’re generating enough quality leads, look next to your sales development approach.  Your prospects aren’t waking up every morning asking themselves, “What can I do to buy something from ABC Company today?” Regardless of how clear you think it is that a lead should know to reach out to you to discuss how you can help them solve their problems, they’re most likely not going to. You need to have an effective process to follow up with those leads and to turn them into sales opportunities.
  • Lastly, be sure to develop effective lead nurturing processes to keep your leads engaged and to support them as they continue through their journey.

As we move into the scenarios that have multiple weaknesses, I’m not going to restate the actions to take that I shared previously.  The most important thing to remember when treating multiple weaknesses is to always start at the top.  Your impulse will be to “solve for the bottom of the funnel.”  While this can lead to short-term improvement, the reality is that you’re not going to actually solve anything. 

5) Weak Traffic, Weak Conversion, Strong Sales

The most likely causes here are either ignoring the top of the funnel altogether or a lack of clarity into who you are trying to attract.  Start by defining your buyer personas and then use your blog to consistently deliver content that is valuable to them.

6) Strong Traffic, Weak Conversion, Weak Sales

Take a look at your website and sales process.  It’s likely that you’re message is not resonating with your prospects and is in need of retooling. When you’re finished adjusting your message, determine what prospecting strategies you want to implement.

7) Weak Traffic, Strong Conversion, Weak Sales

This happens when you create a very popular piece of content.  The key here is to dig deeper and figure out why a conversion path is so effective.  What’s driving the prospects behavior and what problem are they trying to solve?

From there, find ways to recreate that type of content in other areas.  We had a client experiencing this precise problem. One piece of content was particularly popular.  It was responsible for about half of their conversions and the quality of the leads was very high.

Using this piece of content, we built a series of follow up tools that brought prospects further down the funnel, leading to a free assessment.  Additionally, we recreated the approach for other content pieces. The result was stronger sales and an expanding top of the funnel.

8) Weak, Traffic, Weak Conversion, Weak Sales

This is where everyone starts. If you find yourself with this scenario, it’s a great time to implement an inbound marketing approach.

Looking to get started on improving your conversion funnel? Download our calculator today to forecast exactly what you need to adjust to hit your growth goals.

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Mar

10

2015

3 Ways to Use Buyer Personas to Shorten Your Sales Cycle

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The most important and valuable piece of knowledge any business can have is the deep understanding of who their customer is. When speaking with sales and marketing organizations across North America, I share that the most important question a business can answer is, “Who do we want to be a hero to?”

It’s not enough to merely talk about it among the senior team and occasionally in sales meetings, nor is it enough to document your buyer personas and then cast them aside with your marketing plan to collect dust.

Your buyer personas should be among the most worn out documents in your sales and marketing arsenal. While there has been a meaningful increase in the adoption and use of personas on the marketing side (as a recent report from CMI and MarketingProfs supports), the sales side of most organizations still seem to be lagging in this area.

While using personas to map content marketing strategies is useful, it provides only a small percentage of the value that it should. If both sides of the organization aren’t fully committed to using personas to guide their day-to-day actions, the fracture between sales and marketing will multiply and sales momentum will stagnate, causing customer acquisition costs (CAC) to skyrocket.

We use personas to guide our actions every day, both in terms of the sales efforts we pursue for Imagine Business Development and to guide the actions we provide for our clients. This not only creates tremendous clarity for everyone, it enables us to materially shorten the sales cycle. Here are the primary means through which mutual clarity and use of buyer personas can help you shorten your sales cycle:

1) Seek and You Will Find

As the saying goes, seek and you will find. What people often forget, however, is that if you don’t know what you’re seeking, it’s going to be very hard to find.

When I’m working with salespeople (both young and experienced), I see that the greatest amount of time wasted is when they’re spending time with the wrong people, or delivering the wrong message.

When personas are used across the entire organization, salespeople know who to target (so they find them faster), they know what to say, and they know how to navigate the connections between role players.

2) Alignment Between Sales and Marketing

According to MarketingProfs, 61% of B2B marketers send all leads directly to sales, despite only 27% of those leads actually being qualified. Not only does that contribute to significant time wasted (see point 1), it also represents a tremendous waste of resources and opportunity.

Without clearly agreed upon buyer personas, there can be no effective lead triage or scoring mechanism put in place. This not only means that salespeople have less time to focus on their best opportunities (thus decreasing the probability for success), they are also approaching those opportunities with bad messaging and tactics.

I recently got into a debate with the CMO of a SaaS company. He took issue with me in my characterization of the typical conflict between the sales side and marketing side of the business. He claimed that there was no such conflict and that I was overplaying it for my own self-serving purposes.  However, when I asked him (and others in the organization) to describe their best opportunities and the personas within them, there was no clear answer. 

Simply put, it is impossible to have alignment with clarity on who you are trying to attract without defining your buyer personas. Service level agreements are wonderful, but buyer personas are at the center of alignment. 

The impact of this is quite significant. Research from The Aberdeen Group found that companies that had highly aligned sales and marketing organizations achieved, on average, a 32% year-over-year revenue growth, while their less aligned competitors saw a 7% decrease in revenue.

3) Sales Call Planning

My favorite place to use buyer personas is when I’m planning my sales strategy. Clear personas inform my sales development reps (SDRs) who they should be focused on connecting with.

Even more importantly, they guide my actions (and those of my salespeople) when managing specific opportunities. Since buyer personas are a fictional representation of what the best opportunities look like, there’s never a situation where a prospect fits the description completely.

What’s tremendously valuable for me and for my sales team when we’re developing our opportunity strategy is to highlight how the specific prospect is like the description, and how they’re different. For example, I’ll come back from a sales call and share something like this with my opportunity strategy team:

Mary is our Eric Entrepreneur in this opportunity. She’s a lot like him in that she’s very vision-oriented, she started this business and has been the most successful salesperson in her company. She’s different because, well first she’s a she, but more importantly she has a bit more of a formal business background than our typical Eric. 

While my conversations get much deeper than that, they allow all of us to quickly get on the same page and quickly determine the sales tactics we should employ.

This cuts down the analysis time by a factor of 10 and allows us to maintain a proactive posture throughout the sales process, further cutting the sales cycle time.

I should point out that buyer personas should never be considered complete. They are always a work in progress. By ensuring that personas are clearly communicated and utilized throughout the go-to-market process, you also ensure the ability to keep your personas up-to-date, making your marketing and lead generation efforts more effective and further cutting cycle times and sales costs.

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Feb

24

2015

10 Tips When Hiring for a Job You Know Nothing About

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It will only be a matter of time before you are put in a position where you have to hire someone in an area where you lack expertise, or know absolutely nothing about it. Hiring is always a difficult task, fraught with risk. When you add the fact that it’s in an area where you may lack expertise, the risk is even higher.

In this case when I talk about hiring, I’m not limiting the action to bringing on employees. We confront this challenge everyday, as our clients must determine what company they will use to support their lead generation and lead management efforts. Our clients often lack expertise in this area (a major reason why they’re talking with us in the first place).

So, whether you’re looking to hire a new employee, outsource a function, or simply buy something from a vendor in an area where you lack sufficient knowledge, it’s important that you abide by a process that will maximize the probability of success. 

Over the years, I’ve made a number of hires in this area and supported clients as well.  Here are the 10 tips I’ve developed to increase the likelihood of success.

1) Focus on the Results

Bob Corlett, President of Staffing Advisors, often finds himself guiding his clients in areas where they lack expertise.  He often jokes that it’s easier to make a good hire when you lack expertise because the only thing you can fully understand are the results you desire and you don’t get lost on details and biases you may have about a position.

It’s no surprise that he calls his process The Results-Based Hiring Process. As he’s shared with me, the job description (whether you’re hiring an employee or looking to outsource a function) is even more critical when hiring in such a situation.  The problem with most job descriptions is that they’re heavy on tasks and light on results.  The key, Corlett says, “is to be completely clear on the results you need from the hire.”

2) Don’t Hire Someone New to the Task

This rule is from the CEO of UDR, Tom Toomey. He says, “I never hire someone new to me to do something that is new to them.”  I have to admit that when I heard him say this, I had a “hands to face” moment.  I quickly lost count the number of times I had violated this rule, and those hires never worked out.

When hiring in an area where you lack knowledge, it’s easy to confuse motivation or desire with competence. A few years ago, we were looking to significantly improve our execution and knew that effective use of technology would be important. 

We brought someone on board who talked about how to use technology very well.  He talked about the need to automate processes and stated the vision we had in mind. He shared his experiences at other companies in the process. What we didn’t confirm was what he did. While he had a clear picture of what was possible, he never actually figured out how to do it.

3) Seek Outside Guidance

Just because you don’t have experience in an area, doesn’t mean that someone in your company doesn’t; or that an advisor or peer doesn’t have knowledge.

As Les McKeown, management expert and author of Predictable Success says, “To consistently hire great people, you need multiple perspectives. Use hiring panels of two or more people as much as possible, and during the hiring process expose the candidates to the other people they would most interact with. Use internal and external customers in particular. Think of the perspective that brings to the process.” 

No one says your hiring panel needs to be employees of your company.

4) Ask About What Can Go Wrong

When I was a wealth management advisor, I regularly had to hire people for functions where I lacked the expertise. In this case I wasn’t hiring employees, but various money managers to oversee the investment of my clients.

It was then that I learned my acid-test question.  I would always ask the company that was proposing to manage money for me (or more appropriately my clients) “How will I get hurt with this investment? In what situations is this the wrong investment?”

Less than 10% of candidates could answer this question. They would either dodge the question, or insist that this investment was good in all situations.

The thing I’ve learned about experts is that true ones know what can go wrong.  They understand the causes for failure.  They realize there are aspects they can control and others they can’t; and they work like hell to make sure the causes of failure never take hold.

Wanna-be’s and poseurs always talk of benefits and success, and can’t talk about what goes wrong, because they don’t know.

5) Judge the Candidate on the Questions They Ask

Here’s the problem with the way most people hire employees or outside vendors.  They ask a series of questions and judge the respondent by their answers. From there, they judge whether the candidate has the expertise and ability to do the job successfully.

That can work when you have expertise, but how do you judge someone when you don’t have the expertise to understand their answers?  It’s actually quite simple.  Judge them on the questions they ask you.

The right candidate will make you smarter about the function you’re hiring for.  The questions they ask to understand your situation and to dig deeper will make you smarter about the role, and about your needs.

If the candidate doesn’t ask you questions that you can’t answer, and then enable you to figure out the answers effectively, it’s a pretty good bet you’re not hiring someone with the necessary level of expertise to get your job done. As Thomas Edison is attributed to saying, the real demonstration of knowledge is one’s ability to explain things simply.

6) Avoid the Halo Effect

One of the most famous examples of this was when JC Penney hired Ron Johnson, who had experienced tremendous success with Target & Apple.  Fourteen months after he took over, Johnson was fired. How could a hire that was so universally praised, fail so miserably?

In hindsight, it is was quite obvious what caused the mis-hire.  Johnson had never been a CEO, had never been involved in a turnaround and had no middle-market management experience. 

Additionally, while he was there, and certainly contributed to success, Johnson was never the one making the calls.  JC Penney fell victim to what Phil Rozenzweig calls the “Halo Effect.” The “Halo Effect” is a well-documented mental tendency to assume that, simply because we judge a person or thing to be good in one area or quality, we then assume that they must also be good in other separate, but unrelated areas.

Applied to business, Rozenzweig argues that the knowledge of high performance (or indeed low performance) in a company leads us to falsely assume that their culture, systems, strategy and leaders must all share the same performance characteristics as you do.

7) Use Gamification

When you’re filling a position or need where you lack the knowledge, you must admit to yourself that you cannot assess a candidate’s competence from conversation alone. So rather than rely on traditional approaches, try something different.

As HR strategist Paul Keijzer shares, “using games for recruitment has been highlighted as one of the top 10 HR technology trends by the Society of Human Resource Management for 2014. If you’re not going to implement it, you must at least be aware of it.

For example, we’ll often create real-life based practicums to assess a candidate’s ability to do the job.  One of our favorites is the “in-box” exercise. 

The candidate comes in, and we will allocate 2 – 3 hours for the exercise. We give them a computer and a folder with a variety of tasks, requests and communications all based upon the critical skills needed for the position. We then have them go through their “in-box,” and act upon each item as if they were on the job. This way we don’t have to ask them how they would handle something, we see how they actually do it.

8) Try the Job Yourself

One of the biggest pitfalls when hiring someone in an area where you lack expertise is that you are more likely to turn away a good candidate or hire a wrong one than you are to make an effective hire, says Corlett.

His advice?  Do the job yourself for a few weeks:  “If you are the hiring manager, do the job yourself for a few weeks.   I am always delighted when I encounter a manager who has done this.  It dramatically, profoundly, reduces the risk of them making a hiring mistake.”

Why is doing the job yourself so helpful?  There are many reasons, but here are a few:

  • You will get a much, much clearer picture of the capabilities of the other team members.
  • You’ll understand the day to day challenges of the job, and what it takes to do the job well – this will help you avoid “under-hiring” someone not quite good enough to handle it, or “over-hiring”, because again, you’ll actually understand what the job is, and what it is not.
  • You will be able to establish sensible performance metrics for the job, and be far more comfortable holding your new hire accountable to those standards.

9) Have Clear Metrics

As McKeown says, you must “know precisely what you are looking for when hiring.”  Chief among those is the metrics you will use to judge and measure the candidate you hire. 

Top performers like to win, and if you’re not clear on the metrics that you’ll use to keep score, you’ll attract the poseurs and repel the right candidates. 

I see it all the time when companies hire salespeople.  They’re big on vision, and weak on metrics.  They attract the wrong candidate pool and inevitably make a bad hire. 

When the metrics are clear, your ability to assess a candidate’s competence is multiplied.  Further, if you do make a mis-hire, you’ll be able to more quickly adjust.

10) Never Forget, You’re Still Hiring for Fit

Another common mistake made when hiring in such an area is to over-emphasize expertise.  At Imagine Business Development, our hiring mantra is “Right people… right seats.” 

Hiring for fit is critical when bringing people on board to address an area where you lack expertise. Hiring someone to do something you know nothing about will always be challenging. I hope the 10 tips we shared with you here make your next hire a little bit easier.

Are there any other tips we missed that you might suggest?

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Jan

26

2015

5 Attributes of an Effective Lead Management Process

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Inbound marketing is a powerful strategy. When we implement it for a company here at Imagine Business Development, we will typically see a 2 to 7 times increase in lead generation in the first year and a 5 to 10 times increase in future years.

A 2013 study identified generating high quality leads as the number one challenge for B2B marketers. It’s no surprise that Inbound Marketing, with it’s proven track record, is exploding in use. While Inbound Marketing will certainly increase the generation of quality leads, it will also generate more low-quality leads. 

In our experience, of the leads created by an effective Inbound Marketing approach between 50% and 90% of leads will never become qualified in any fashion.  This rate is highly dependent upon the industry you’re in, how clearly you’ve segmented your market and how effective your process and strategy is.

It’s important to note that generating low quality leads is not, in and of itself, a bad thing. For companies whose message (and offers) appeals to a broad marketplace, and yet whose actual products and services appeal to a small percentage of that market, will experience a fairly high low-quality lead percentage. 

At Imagine Business Development, for example, we typically run between a 12% and 16% quality lead rate (meaning as many as 88% of the leads we generate are low quality and never enter any type of nurturing or pipeline process).

While at first blush this seems bad (it certainly did to me), our lead velocity growth rate of qualified leads (which at the end of the day is what we care about) is actually quite healthy.

What’s interesting is that when generating leads is among your biggest barriers to growth, you tend not to consider what you have to do when your lead velocity increases. We see this everyday, as oftentimes our clients are initially stuck once the leads start to develop. As I shared in an earlier post, inbound leads don’t behave like traditional outbound leads, and must be handled differently.

As you embark upon, or enhance, your Inbound Marketing efforts the development of an effective lead management process is crucial to maximize the ROI of your lead generation efforts.

From our experience, here are the 5 attributes of an effective lead management process:

1) Clear Definitions for Each Stage of the Funnel

It is important that you clearly define each stage of your funnel. For purposes of illustration, I will highlight the minimal areas of classification and share with you a baseline definition:

  • Visits – we define a visit simply as a unique visitor to our website. We have clients that weave in offline measurements (like trade show visits, ad impressions, etc.) to this metric.  The point here is that there’s no right or wrong definition, so long as there is a clear one.
  • Lead – we consider a lead simply a lead.  There’s no qualification.  The measurement we use for this is names that are added to our database. This could either be the result of someone downloading something online, leaving a business card at a trade show, a referral, etc.  An important point here is we measure leads as individuals, not companies.
  • Marketing Qualified Lead (MQL) – these are companies that have identified themselves as being more engaged, have the pain that you solve, and meet initial criteria that indicate they could be a fit.
  • Sales Qualified Lead (SQL) – these are companies who not only have the pain we solve, but meet a deeper fit analysis that indicates a potential match. Additionally, these are companies where we’ve connected with the proper authority level, they demonstrate a defined need/pain and are open to conversation.

In our programs we define categories within each level of the funnel and provide a more detailed explanation that ensures a single definition that is understood and followed by all.

2) Clearly Articulated High Probability Indicators (HPI)

Spend the time before prospecting to identify the HPI that connect to the 3-5 causes that lead a prospect to buy from you. From there, you can build your story, challenge their thinking and create a stronger impression that will lead to action.

Clear HPIs provide focus for your marketing and sales efforts, which allow for greater alignment and more effective action.

3) Lead Triage or Lead Scoring Process

I’ve written much about lead triage vs. lead scoring (and for those that don’t want to read that post, only a small percentage of companies should actually be doing lead scoring, most should be doing triage).  For purposes of space, I won’t repeat all that I’ve written here.

Suffice it to say that a clear process for assessing both the company and the contact needs to be in place.

4) Service Level Agreement (SLA) Between Marketing, Sales (and if Necessary, Sales Development)

An effective service level agreement, at a minimum, meets three criteria

  1. Provide clear definitions for each stage of the funnel (as mentioned in the first point).
  2. Clearly lays out the protocols of who (marketing, sales development, sales) does what (connect, email, call, voice mail) when and how often.
  3. Lays out clear targets and measurements that will be used to assess progress and create accountability.

SLAs can certainly be deeper than these three criteria, and for those more advanced or looking to scale bigger and faster it certainly should be.  However, if you don’t have an SLA (and the majority of companies with marketing budgets under $1 million don’t), start with these three criteria and evolve from there.

5) A Defined Nurturing Process

The power of building out a full funnel is that it builds predictability and scalability into your growth efforts. The frustrating part is that just because someone is a “qualified lead” doesn’t mean that they’re ready to buy or talk to a salesperson. According to Gleanster Research, that applies to 50% of your qualified leads, and I’ve seen stats that indicate it could be as high as 80%.

Additionally:

  • Leads who are nurtured with targeted content produce a 20% increase in sales opportunities (source: DemandGen)
  • Companies that excel at lead nurturing generate 50% more sales ready leads at a 33% lower cost (source: Forrester Research)

The bottom line is that effective nurturing is a requirement if you want to see the returns from your marketing and lead generation investments.

Want to learn more about lead management? Download our guide on how to effectively manage inbound leads.

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Dec

23

2014

How and When to Follow up With All Types of Leads

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In the sales and marketing world, there are few issues that are getting more attention than the issues surrounding lead management and follow up. In my experience, clarity around lead management, qualification and response times are the crucial linchpin to align sales and marketing efforts.

It’s a rather scary statistic, but according to a study most recently done for Harvard Business Review, 71% of qualified leads are never followed up with. What’s more is, of the leads that are followed up on, they’re only touched an average of 1.3 times. This represents tremendous opportunity costs not only in revenue, but in the customer/prospect experience as well.

This is why creating a clear service level agreement (SLA) is important. An effective Lead Management and Response SLA lays out how leads should be treated, when they should be followed up with, how often they should be followed up with and how the sales and marketing sides of the organization will be held accountable in the process.

While there is a tremendous amount of research on how to respond to inbound leads, developing effective protocols requires more than just determining the source of a lead. What’s important is determining the quality and the context of the lead you have generated.

The Four Components of Lead Classification

We’ve identified four components that must be factored in when developing lead management protocols:

1) Type of Product/Service

Is your offering one that fills an already existing need, with an existing line item; or, are you selling something to solve a problem that isn’t being managed, with no existing line item? If you’re selling the former, you’re response management is going to need to be on the faster side of what I explain below.

2) Source

Where did the lead come from? The simplest designation via inbound or offline efforts. Inbound leads typically need much faster response that offline leads do. However, it’s not always that simple. There are offline sources that need quick responses, but not every inbound lead should be responded to immediately.

3) Company Quality

An important rule to remember when qualifying leads is to always be qualifying the company, not the contact. Whether it’s someone who downloaded a white paper or checklist from your website, gave you a card at a trade show or called in to your main number, you want to be paying attention to the company when assessing the strength of a lead. The higher the lead quality the faster you’ll want to respond.

4) The Buyer’s Journey

You must consider where the prospect finds themselves in their buying journey. While responding within five minutes of a download is ideal at the bottom of the funnel, it can turn people off when they’re at the top. To get a feel of where your prospect most likely is, consider:

  • Which of your buyer personas do they represent?
  • What offer did they download (or how else was the lead created)?
  • What other actions have they had with your company and website? 

The lower the prospect is in the funnel (the closer they are to their decision stage), the faster you are going to want to respond.

Lead Scoring vs. Lead Triage

With your lead classification criteria clear, next you’ll want to decide whether you’ll take lead scoring or (what I like to call) a lead triage approach. While lead scoring is a hot topic, with the siren song of certainty, I’ve found that very few companies are in a position where they should actually focus on lead scoring. Lead scoring works when:

  • There is certainty about what actions and attributes cause a prospect to be more likely to buy, and
  • You’re being overwhelmed with more leads than your sales team can manage. If you’ve got capacity to respond to more leads, lead scoring is relatively useless.

Lead triage is a simple (and at least partially manual) process of reviewing each lead to categorize it within the context of your lead management SLA. The job is to simply classify each lead as qualified, not-qualified or not enough information to determine.

For qualified leads (QLs) the vast majority of companies will do fine designating each QL as low, moderate or high quality. That designation should trigger corresponding actions within your SLA. If you feel the need for a more nuanced approach you can add a bottom/not-bottom category to each designation.

Effectively Responding to Leads

The first rule of lead response is “respond.” Keep things simple, as the statistic at the beginning of this post highlight, merely responding to leads puts you in the top quartile of organizations.

Timing of Response

For a lead generated online, waiting just five minutes will reduce the likelihood of contact by 10x factor. Now, as I shared in the classification section, I’m not an advocate that every online lead be contacted instantly. First off, few companies have the resources to consistently respond in such a manner, and secondly the context of your prospect often make it unnecessary.

I share this statistic to highlight that time is of the essence. For companies with a lead response system in place, the average response time is 46 hours, 53 minutes – almost two days! That is simply too long for the average initial response.

Frequency of Response

When developing your lead response process, you want to address not only the time that a qualified lead should be responded to, but the frequency as well.

As I shared above, the typical lead is touched by a salesperson on average only 1.3 times. Increasing the number of touches to six increases the likelihood of making a contact by 70%.

When crafting your response protocols, you’ll want to integrate voice mail and email. Highly qualified leads should get at least six outreaches over a sustained period of time.

The Importance of Nurturing

As a part of your lead management process, you’re going to want to designate whether a lead is being actively or passively managed. If you fail to connect with your prospect within the time prescribed in your SLA, and even if you connect and no sales action is initiated, you’ll want to make sure you have a defined nurturing process in place to position yourself strongly in the future.

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