Let’s not confuse CRM with Marketing Automation.
Customer Relationship Management is about “customers”. Marketing automation deals with managing your lead generation and lead nurturing processes – before they are converted.
Many South African businesses from enterprise to SME share a similar DNA default in the methodology behind the management of their marketing spend.
The kink in the armor is a lack of actionable data.
Fact is that most marketing/lead-generation activity is unstructured, based on hit and hope, gut-feel, outdated practice and are woefully inefficient to deliver the type of lead volume and, more importantly, lead quality that companies need in order to:
- Decrease their cost of sale
- Increase conversion/closing rate
- Meet their targets for “new business” sales
In order to get this right you need to:
- Calculate your ballpark lead generation requirements
- Define your lead nurturing process
- Manage that process from one, central, location – preferably using marketing
How many leads do you need to make your sales target?
Every business is different, of course, but for the purposes of highlighting where the starting point of your marketing journey should be let’s use this basic example:
Your new sales target for the year is R10m.
- You know that your average deal size is R100,000.00
- For you to reach your new sales target you need to close 100 deals
- Say there’s 11 (realistic) trading months if you are in the B2B space, that’s 9 deals per month.
- If your closing ratio from lead to sale is, say, 5% – you would need: 181 good leads a month.
What does it cost to generate 181 good leads?
- Say a ballpark figure of R400.00 per good lead and you are looking at a monthly budget requirement of R72,400.00 in marketing to generate R900,000.00 worth of sales.
Yes, of course this is a rather simplistic way of looking at it but the methodology is sound and it gives you something to measure your lead generation activity against.
Obviously the Cost-per-Lead is not necessarily R400.00 and you will find some activities deliver leads at much lower (or much higher) CPL than that – and you will not, consistently, generate the number of leads you are looking for but the mathematics in the above example (closing ratios, sales targets and the like) do not lie.
Knowing this allows you to then put KPIs in place re: closing ratios (improving presentation quality, improving lead quality, improving lead qualifying) and all sorts of related metrics – each playing its part in helping your organisation achieve its turnover targets for the year.
Good marketing automation software (and successful application of it) will help you manage and report on these KPIs and improve the performance of your overall sales/marketing function.
Defining your Process
Before you run off into the software sunset, looking to purchase mentioned automation solution, you need to first be clear about the process your company will follow once a lead is generated.
There is no point, after all, spending money on marketing before knowing what you will do with a person who shows interest in your product or service.
Defining these processes allows you to minimise “lead drop off” and maximise return on your marketing spend, it will also allow you to streamline human resource requirements and, hopefully, shorten your leads’ buying cycles.
Basic process outlines (for example):
- What does a contact need to do to be considered a “lead” in your organisation?
- Once a lead is generated, what communication can they expect to receive?
- Based on their interaction with that communication, when should the lead be contacted?
- Based on the outcome of that “courtesy” call, what process is then followed?
- When is a lead worthy of a “field sales visit”?
- What information should be gathered before that visit, and what communication should the lead (plus their colleagues) receive prior the visit?
- What happens after the field sales visit? (from communication flow to personal contact sessions)
- When lead converts into client, what does the customer take-on process look like?
All the above (and more) may sound pedantic but unless processes are defined and followed, your organisation will leave millions in potential revenue on the table.
Manage processes with marketing automation software
Right, now that you know where you want to go and what you need to get there, you also need to implement a solution to help you steer the ship.
Marketing automation solutions like Marketo, Silverpop, SharpSpring, Act-On and the like (there are many) give you insights and helps marketing to manage the communication and nurturing processes without the assistance of IT.
It also allows sales to see which leads are hot, what the outcomes were from meetings and automate many of the alerts to ensure that follow-ups happen, as and when determined by your process.
Turn insights into intelligence
I’ve simplified things in the above explanation (of course) and we can (and will) get into greater detail going forward but the reality of doing business without clear visibility into what you are doing to generate leads, and what is happening to those leads once earned – is akin to thinking the world is flat or that the moon is made out of cheese.
Knowing is everything… and is the edge you are looking for in a rapidly evolving world.
I look forward to engaging with you next time as we dive deeper into the topic of lead scoring, knowing which leads are worthy of your time and which are not ready for a sales call, just yet – and what to do about it.
Best wishes until then.