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Everything you do in marketing should ultimately drive profit. As with any investment, consider the revenue, profitability...
and timing for a given investment, and result such as revenue. The more effective your marketing spend, the more revenue a given investment will yield and the greater impact your marketing will have on the bottom line.
Regardless of other goals, your ultimate end goal should be (in order of priority) to get new customers and increase revenue in the most efficient way possible. Lead-to-revenue management (L2RM) helps marketers to strategize and operationalize this.
A comprehensive approach
Lead-to-revenue management encompasses the marketing and sales process, from capturing the contact information for leads and prospects all the way to closing the deal and turning prospects into customers. From surveying a variety of companies, analyst firm Forrester Research found that L2RM enabled them to accomplish the following:
- Manage automated, consistent prospect engagement at scale.
- Measure results based on multiple factors, including volume, velocity, quality, effectiveness and efficiency.
- Drive a holistic and seamless movement of prospective customers through the lead lifecycle, from capture to nurture to sell (i.e., from lead to close) across both marketing and sales.
- Ensure close collaboration between marketing and sales.
Orchestrating lead flow while responding to the buyer's journey
According to The Complete Guide to B2B Marketing by Kim Anne King, leads move through different stages: A marketing-qualified lead (MQL) can become a sales-accepted lead, then a sales-qualified lead (SQL), sales-qualified opportunity and then closed business. L2RM automatically orchestrates this movement in a closed-loop system.
At the same time, L2RM orchestrates the prospective customer's experience as they move through different phases of the "buyer's journey," which King said progresses from awareness of the problem to researching solutions to evaluation of vendors to the decision to purchase.
Let's consider the components required to make this possible.
According to Forrester, lead-to-revenue management platforms encompass a variety of methods, including lead capture, lead nurturing, lead scoring, optimization, and more. Marketing automation platforms and external systems include many of these capabilities, although you may choose a best-of-breed technology that integrates with a MAP instead.
- Marketing automation platform. The center of any L2RM system is a MAP, which at minimum orchestrates lead capture, tracking and movement. Ideally, a MAP will manage user experience as well, providing cross-channel execution so that customers get a consistent experience regardless of the company channel they use -- whether that is on the phone, on email, on the corporate website or on a social platform -- and real-time contextual triggers, for example.
- Lead scoring. As leads evolve through phases, lead scores need to be assigned based on activity, overt responses to questions, predictive lead scoring, etc. This can be handled through the MAP or external systems such as predictive lead scoring.
- CRM integration. The "revenue" portion of L2RM is captured in a CRM system, and often the CRM serves as the system of record, so seamless CRM integration is critical.
- Integrated reporting and analytics tools. MAP, CRM and best-of-breed reporting/analytics vendors provide a variety of options for reporting and analytics. Many of these tools provide powerful, real-time reporting so you can stay on top of results and adjust accordingly.
To ensure success, consider the following:
Automated processes. The more tasks you can automate, the better. Despite automation being the middle name of MAP, automation is not as automatic as you might think. For example, automated and integrated reporting and analytics can provide you with real-time data instead of manually created weekly or monthly reports (when it's too late to make changes). And automated lead scoring and automated processes can ensure that each lead is treated in the same manner, moving as quickly through the process as possible, alerting key stakeholders and shortening the time from lead to close.
Clearly defined lead and opportunity stages. You should also connect action with results. For example, a given event might prompt a suspect to become a new lead, or a campaign might cause a lead to convert to an MQL. The key is to ensure that sales and marketing consistently define and use each stage. For example, I worked with a company where sales reps created new sales opportunities for true new revenue opportunities as well as for target accounts lacking identified revenue opportunities, which broke the MAP's ability to automatically track leads to revenue. Sales and marketing agreements on specific definitions alleviate problems like this.
Sales and marketing partnership. To ensure a smooth handoff between the two departments, marketing needs to work together with sales to determine a joint service-level agreement (SLA). At a minimum, the SLA should include the definition of an MQL, the number of MQLs marketing will provide to sales during a specified period, and the maximum amount of time that sales will take to accept/reject and then follow up on leads. And by the way, if sales rejects too many MQLs, it may be time to change the criteria. If marketing and sales are out of sync, marketing may not provide enough good leads to sales, and sales may let leads go stale, both of which will drive down pipeline and revenue while actually increasing the marketing cost per sale.
Reporting and analytics. Marketing is a process of continual improvement and optimization. But you can't improve what you can't see. So, make sure that reporting provides insights on key performance indicators (KPIs), analytics that help you to predict future sales pipeline, and revenue and operational metrics as I described in a recent piece on metrics:
- KPIs. The most important KPIs focus on your top marketing goals overall, such as number of new customers, marketing-sourced and/or marketing-influenced opportunities and closed deals, average cost per lead and MQL, number of renewals, lead to close velocity, etc. Establish automated, continuous reporting to see how you're progressing against your goals.
- Analytics. Among other things, analytics may predict future pipeline and sales growth. For example, if marketing and sales have typically achieved a 10% conversion from MQL to close with an average time to close of two months, a 20% increase in MQLs could signal a similar 20% increase in closed deals in two months, assuming that sales can qualify and close an increased number of new opportunities.
- Program metrics. Program metrics help improve and optimize the marketing mix by comparing metrics of different campaigns, programs, channels or market segments against one another and/or a benchmark. These can include total cost per lead/MQL/deal, programs generating the highest percentage of MQLs or favorable lead score changes, etc. As you create, test and measure the results of different programs, you can determine which work best so you can achieve the best result with the least amount of resources -- which is, of course, a key element of lead-to-revenue management.
Where's the ROI? L2RM
Lead-to-revenue management can help to optimize your marketing investment. L2RM helps you to move the right number of qualified leads through your marketing and sales funnel to meet or exceed revenue targets for new and existing customers, maximize the number of qualified leads while reducing the cost per qualified lead, shorten the time from lead capture to close, and predict future pipeline and revenue.
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