From First Click to Lifetime Customer WHITE PAPER From Cold to Hot: Lead-Nurturing Programs That Generate Sales
FROM COLD TO HOT: Lead-nurturing programs that generate sales Marketers eager to maximize the effectiveness of their efforts and help drive revenue recognize that there s much more to success than dragging a boatload of leads into the door. Especially for B2B companies involved in complex sales cycles, the art and science of lead management is critical to reaching and engaging new prospects, improving productivity, streamlining the lead-to-sales process, and improving marketing return on investment and impact on company revenue. Lead management encompasses five unique but critically important steps: 1. Lead generation: spreading a wide net to find as many prospective customers as possible 2. Lead scoring: determining at what stage in the buying cycle each lead is at and moving those deemed ready-to-buy to sales 3. Lead nurturing: continually communicating to leads that are not yet ready to buy 4. Lead notification & routing: providing the lead to the appropriate salesperson in a timely manner, with the appropriate visibility into the lead worth and details of interactions to marketing efforts 5. ROMI analysis: identifying the specific market activities that bring in the best revenue opportunities and adjusting marketing programs accordingly This white paper explains the importance of Step 3 lead nurturing in the lead-management process. It takes a look at best practices for nurturing leads in today s competitive business environment and offers advice for implementing a lead-nurturing program. Effective lead-nurturing programs can be simple or complex. On one end of the spectrum, they consist of a basic sequence of timed communications to all prospects to keep a company s offerings in sight of prospective buyers. More targeted and sophisticated programs include automated, proactive communications triggered by the responses, behavior or prior contact history of leads. Ultimately, the most important thing about a lead-nurturing program is that you begin one. Don t just leave prospects out in the cold. It is up to you to keep your prospects engaged with your brand. Because if you don t take care of your sales leads, someone else will. What Is Lead Nurturing? Lead nurturing is the practice of maintaining ongoing contact with prospects identified as not yet ready to make a purchase. By implementing marketing programs that gather information about where leads are in the buying cycle and moving them along in that process while favorably influencing them toward the company and its products, marketers are better able to influence and support revenue generation, and to measure the impact of marketing campaigns on sales results. Lead nurturing is a proven lead-to-sale methodology that can move prospects through the sales funnel toward purchasing your product or service. It consists of a series of automated, timed communications designed to build trust and keep your company top-of-mind until a prospect has received enough information and is ready to buy. Lead-nurturing communications activities can include informative emails, direct mail or telephone calls, Webinars, white papers, studies, newsletters, product information, industry news and more. Why Lead Nurturing Is Essential Sitting on leads is sitting on a gold mine. Your lead pool represents tremendous value for your company. An organized process to move leads that are ready to buy on to sales while ensuring that those with the potential to become qualified leads are nurtured along through the sales cycle is essential to B2B marketing. www.silverpop.com/b2b 1-877-484-7704 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 2
Analysts at Aberdeen Group find that companies with the highest leadqualification rates and lead-to-sales conversion rates are twice as likely as less successful companies to leverage formalized lead metrics that manage the flow of leads from marketing to sales and back again when warranted. 1 Most Prospects Become Buyers (someone s if not yours) Most of the leads that come into your marketing organization are still in the early stages of the buying process. If you don t make an effort to stay in front of these longer-term prospects, they will simply move through the buying cycle without you. You may even fall off their radar entirely as the time to purchase nears. Imagine the pain of losing new business to a competitor because a prospect simply forgot about you. Lead Nurturing Increases Efficiency and ROI According to industry research firm Sirius Decisions, only about 53 percent to 68 percent of leads that are qualified by marketing as sales-ready are accepted by sales. And, of those that are accepted, only about 50 percent to 57 percent are subsequently deemed as sales opportunities. 2 This means that leads frequently fall out of the sales funnel after being handed off to sales. And many of those leads that fall by the wayside will eventually buy. From your competition. Well-planned and highly successful lead-nurturing programs ensure that marketing and sales work in concert to manage leads more efficiently. The first step is to get on the same page with your sales organization about what constitutes a qualified lead. When marketing sends sales only leads that meet the criteria jointly agreed upon by both organizations, the sales team is able to focus on the most highly qualified leads and achieve a higher conversion rate. Lead nurturing enables sales to work more efficiently, close more deals and generate higher revenues. It s important to remember that, even with the best nurturing program, people don t always move through the process exactly as planned. Even hot leads can get stalled. A budget gets cut; a timeline extended. To address the inevitability of hot leads suddenly going cool, make sure your lead-management program allows sales to send formerly qualified leads back to marketing for further nurturing. Similarly, marketing must be able to easily alert sales when prospects sent back for nurturing become re-engaged and are ready to be worked. Steps to Develop a Lead-Nurturing Program Most B2B marketers are familiar with the ubiquitous sales funnel. Hundreds or thousands of leads flow into one end, and a trickle of qualified leads emerges out the other end to be worked by sales. So it s not really a funnel as much as it is a sieve. Leads with enough bulk surrounding them (budget, authority to buy, need, timeline and more) are pulled out by sales and worked. The rest seep out. Capturing the leads that slip through the sieve and allowing them to flow into a special marketing program is the secret of a successful lead-nurturing program. Measuring the ROI of Lead Nurturing Marketers seeking to justify and increase budgets are under increasing pressure to demonstrate the effectiveness and worth of their programs. Simply measuring the number of leads generated by a marketing campaign won t give you enough insight to determine the ultimate effectiveness of your marketing program and its impact on the bottom line. To evaluate marketing ROI, you need to calculate: The percentage of marketing-qualified leads accepted by sales The percentage of sales-accepted leads that become sales-qualified The percentage of marketing-qualified leads that ultimately result in closed business To show how marketing contributes to the bottom line, you must get together with your sales organization, carefully define and agree on what you mean by ROI, and align your objectives. Make sure you understand your company s revenue and sales goals. Determine the number of sales-qualified leads that marketing needs to deliver and how many new leads are generally required to meet that goal. These calculations vary widely by industry, company, and competence of both the sales and marketing teams. Length of Lead Nurturing How long should I nurture my leads? The length of your individual lead-nurturing programs can vary greatly. But a good general rule is to actively nurture each lead for the length of your average sales cycle. If they still haven t become marketingqualified as ready for sales, you can move them into a long-term nurture program that enables you to unobtrusively stay in front of them and ascertain when they re-engage or enter an active phase of the buying cycle. www.silverpop.com/b2b 1-877-484-7704 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 3
Following are three steps to get you started with a lead-nurturing program. Step 1: Keep talking An easy yet powerful lead-nurturing initiative would be simply to send all leads in need of warming an automated, timed series of messages designed to keep your company and its products top-of-mind as the prospect moves through the buying cycle. At a minimum, you will want to contact everybody at least once, so that no one goes an entire sales cycle without having received a touch. For simplicity s sake, you can use a single channel, such as email, telesales or direct mail to maintain contact with leads in need of warming. But you can also mix it up, for instance, following up an email inviting them to join your newsletter with a call from inside sales, followed by a direct mail thank-you for their time and encouraging them to attend your next Webinar. Be sure to give prospects in your lead-warming program the ability to indicate that they may be ready to buy. This can be accomplished by making it easy for leads to update their information or requesting a demo or a call from a sales representative. Step 2: Hold individual conversations People buy for different reasons. One buyer may be severely price-sensitive while another may be more concerned about training modules and customer support. To warm leads into a sales-ready condition, it s important to increase the relevance of your messaging whenever possible. You can start by sending all leads the same initial message, but include a question with several possible answers. For example, ask prospects to select their greatest need, challenge or top priority related to the products or services you offer. Base subsequent messaging on each person s response. This more targeted approach enables those who select one answer to receive one series of communications, while those who select a different answer receive another. A slightly more complex lead-nurturing tactic would be to segment leads by criteria that indicate their propensity to buy as they come into your nurturing program such as by response to questions they answer in order to download a white paper. For instance, those who indicate very short purchasing timelines could be routed immediately to sales, while those who indicate longer timelines could receive longer-term communications, such as educational materials and case studies, and those who say they are just researching could be excluded from lead nurturing altogether. Step 3: Target high-potential leads Once you get a basic lead-nurturing program into place, you can begin to hone your targeting to more actively propel nearly sales-ready leads forward in the sales funnel. Communications campaigns based on the lead s location in the buying cycle can be automated to deliver the right information to the right prospect at the right time. For example, you might send prospects just beginning to search for solutions a white paper about industry issues to establish your company s thought capital. Next, follow up with an invitation to a Webinar showcasing research explaining how various technologies solve the issue in question. Next, send a survey to identify movement along the sales cycle, and depending upon results, use telesales to ascertain whether they are ready to begin evaluating solutions. Impressions LEAD-MANAGEMENT WATERFALL Inquiries LEAD-NURTURING PROGRAM Marketing Qualified Sales Accepted Sales Qualified New Business Impressions. The sum of all marketing exposure across all lead-generation campaigns. Inquiries. Person has raised hand by responding to an offer or requesting information. Marketing Qualified. Through a series of actions and interactions, a prospect indicates an intention to buy, and the lead is sent to sales for follow-up. Sales Accepted. Sales acknowledges that the agreed-upon definition of qualified has been met, and works the lead. Sales Qualified. Sales determines that an opportunity exists, and the lead enters the sales pipeline. New Business. Opportunity results in a closed sale. www.silverpop.com/b2b 1-877-484-7704 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 4
At the point that the lead can be moved to sales, it doesn t have to be abandoned by marketing. Marketing should monitor the progress of the lead and be ready to fold it back into the lead-warming process if sales determines it needs additional nurturing. From Cool Interest to Hot Pursuit of Solutions: Messaging That Moves Prospects Off the Dime The technology of an automated, triggered lead-warming process is only a part of the program. Once you have prospects lined up to listen to your enticements, what will you tell them? At this stage in the game, a strong lead-nurturing program employs two-way messaging that helps marketers better understand a prospect s needs while at the same time instills confidence in the company s ability to meet those needs. Recognize that potential customers have important and complex decisions to make. As they move through the buying cycle, they must: Understand the possible solutions to their problem Identify companies offering those solutions Familiarize themselves with your company Perceive that you are an industry leader and expert Be confident you understand their specific needs and can solve them Trust you enough to want to enter into a business relationship with you As you create your lead-nurturing messages, make sure you answer the following questions: How can we build credibility with our prospects? How can we show that our products and services will help them achieve their goals? How can we differentiate ourselves from the competition? Lead nurturing is not the practice of bombarding people with promotional messages and calls to see if they re ready to buy. Lead nurturing is a process that is used to educate leads about various solutions and yours in particular and become a trusted adviser. Whether at the beginning or end of the sales cycle, the goal of a strong lead-nurturing campaign is to ensure that prospects will immediately think of you when they are ready. Good lead-nurturing messages provide insights and solutions, not overt sales pitches. Segment to Increase Relevance Although you can send everyone in your lead-nurture program the same series of messages, dividing your prospects into groups enables you to more effectively: Target communications in order to increase relevancy Align your marketing and sales resources Transition from product-centric to customer-centric messaging You can segment your leads based on: Demographic information BANT information (Has Budget allotted; Authority to purchase; a Need that we solve; a defined Timeline to purchase) Behaviors Map Lead-Nurturing Programs to Your Buying Cycle To understand how to best influence prospects, you must understand your buying cycle the sequence and duration of phases that a typical customer goes through when deciding to purchase your product or service. Mapping your lead-nurturing programs to these phases is key to moving prospects through the purchasing process. Top-notch lead nurturing consists of incubating prospects until they are ready to buy, both before and after the hand-off to sales. To ensure that the maximum number of prospects make it into the sales pipeline and result in new business, marketing must continue to work with sales to create and send appropriately timed nurturing messages even after leads have been passed to www.silverpop.com/b2b 1-877-484-7704 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 5
sales. Let s examine the four basic phases of a buying cycle Awareness, Evaluation, Choice and Purchase and how lead nurturing can be used to influence each. Frequency of Contact How often should I contact my prospects via a lead-nurturing program? A good rule of thumb is to contact people one time for each month of your sales cycle. So if it typically takes a prospect nine months from awareness to purchase, you should have nine touch points to guide leads to conversion. But also keep in mind that how frequently you contact someone is also related to the value and timeliness of your content as well as the unique business needs of your industry or prospects. Buying Cycle Phase 1: Awareness Prospects are no longer satisfied with the status quo and recognize a need for change. They have responded to one of your marketing campaigns, indicating an interest in the types of solutions your company has to offer. Goal of nurturing program at this stage: To reinforce awareness of need, identify solutions and create interest in further exploration. Common elements of nurture program at this stage: An automated series of communications offering educational materials and best practices such as white papers, newsletters and Webinars. Buying Cycle Phase 2: Evaluation Buyers have decided to act, and are searching for and evaluating solutions. They have indicated a specific need or interest in your product or service. Goal of nurturing program at this stage: To assess whether they are ready to be sent to sales; to assist them in identifying their decision criteria; to position your solution with these criteria in mind; and to learn more about their needs and respond with appropriate information. Common elements of nurture program at this stage: An automated series of communications that offer white papers, case studies and testimonials, Webinars, special event invitations and product/service data sheets. Buying Cycle Phase 3: Choice Buyers have evaluated solutions and have narrowed their choices. They begin thinking about the personal and business risks that may be involved. They take actions highly indicative of a decision to buy, such as updating personal information, viewing an in-depth product page, or requesting a demo or sales call-back. Goal of nurturing program at this stage: To uncover prospects perceived risks and help find ways to alleviate them; to help buyers justify a decision to choose your company and its products. Common elements of nurture program at this stage: At discretion of assigned sales representative, an automated series of communications offering pricing comparisons, feature comparisons, product capabilities, data sheets, testimonials, assisted demo, free trial and relevant marketing statistics can be sent. Buying Cycle Phase 4: Purchase Buyers have selected your solution and are ready to purchase. Negotiations and contractual agreements are being finalized. Sales interaction validates buyer decisions to purchase. Active lead nurturing has concluded, but marketing organization continues to track sales opportunity through to close to ascertain/confirm role in closed business/roi. www.silverpop.com/b2b 1-877-484-7704 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 6
Goal of nurturing program at this stage: To minimize buyer s remorse and to instill an early sense of value in the purchase decision. Common elements of nurture program at this stage: Product accolades, success stories, key contact references and personal thank-you messages. Offers aligned to the buying cycle not only keep more prospects in the pipeline, they help you learn more about your potential customers needs and nudge them closer to a purchase. Many industry experts believe offers are critical to moving B2B as well as B2C prospects through the buying process. Have a library of offers suitable for buyers in each category of your sales chain. Conclusion A key attribute of top-performing, demand-creation marketers is their ability to build processes and systems that effectively track and manage leads across the entire lead-to-sale process. Marketers tend to think of their role as lead generators only until leads are ready to be handed off to sales. But the best lead-management systems will consider the entire process from inquiry to sale. Fortunately, powerful tools are now available that enable B2B and other marketers with complex sales processes to develop a dynamic, repeatable and measurable lead-nurturing process. In fact, Aberdeen found that 73 percent of top-performing companies use a lead-management system. 1 These systems are designed to engage prospects, increase response rates, accelerate sales opportunities and provide visibility into marketing initiatives. Tightly integrated with a company s CRM or sales force automation system, they allow for accurate, unbiased ROI reporting, clearly demonstrating marketing s successes and overall contribution to the company s business goals. When you incorporate lead nurturing into your overall lead-management plan, be sure your marketing automation solution can: Continue to nurture leads even after they ve been handed off to sales. Return stalled leads back into ongoing marketing programs for further nurturing. Alert sales in real time when leads re-engage or take specific actions that could indicate a readiness to buy. Track sales-accepted follow-up in an automated fashion. Track nurture-influenced revenue in order to fully measure the success of your marketing program. A study issued by analyst firm Gartner found that marketing automation is one of the fastest-growing CRM investment areas a trend it expects to continue through 2011. Gartner estimates that companies that implement lead-management solutions such as those offered by Silverpop and others will see as much as a 50 percent increase in lead conversion rates. 3 So if you haven t implemented an automated lead-management program, now is the time. Footnotes 1. Demand Generation Automation: Kick Start Your Business, Aberdeen Group, Sept. 2007 2. Effective Lead Management SAL to SQL, Research Brief, Sirius Decisions 3. Predicts 2007: A Return to Growth Fuels Marketing Technology Spending, Gartner, Nov. 2006 To find out more about Silverpop s Engage platform and how it can benefit your company, please contact us toll-free at 1-877-484-7704. Visit us at www.silverpop.com/b2b www.silverpop.com/b2b 1-877-484-7704 2010 Copyright Silverpop. All rights reserved. The Silverpop logo is a registered trademark of Silverpop Systems Inc. 7