A few years ago, sales and marketing experts were talking about the concept of lead-to-revenue management, which attempts to calculate how much various marketing activities contribute directly to sales. It turns out to be a lot harder than it sounds.
Market research firm Forrester offers one of the best frameworks for explaining lead-to-revenue management (L2RM). It outlines a four-stage process where B2B firms discover, plan, act and optimize their marketing activities.
“Lead-to-revenue management (L2RM) is not demand generation on steroids,” the report says. “The payoff from L2RM investments comes from the deeper customer insights that, when shared across the company, help systematically win, serve, and retain increasingly empowered customers.”
Canadian small and medium-sized businesses may feel L2RM is something so complex that only the largest companies can pull it off, but that’s not true. In fact, there are reasons why SMBs may find even greater value as they invest in things like marketing automation software. Three simple questions could set you up for success.
Where Did The Lead Begin?
One of the biggest challenges in attributing revenue to marketing is that, by the time a deal closes, the path the lead took from start to finish can become difficult to see. While you could assume that many B2B prospects first become leads by visiting a website, there could be nearly as many who first encounter a company by visiting their booth at a trade show, opening an e-mail message or watching a video on YouTube.
The number of potential touch points is only going to increase as technology become more sophisticated. Think of wearables that will offer new channels for marketing messages to reach customers. Consider how the Internet of Things will create highly connected environments that offer personalized and contextual experiences for marketers to deliver content. This means anyone embarking on an L2RM initiative should think through the following questions:
- What are the key marketing tactics used today, and what are the associated metrics?
- What tactics/channels will be necessary within six months/a year/eighteen months and what will the metrics be?
- What might some of the typical journeys from lead to sale look like across current and future channels? Where might blind spots occur and how can technology help?
What Can Be Automated Today Vs. Tomorrow?
Launching a full-scale L2RM overhaul might be unfeasible for a number of reasons. Most experts suggest starting small, by looking first at the buyer journey and the touch points that most lend themselves to being tracked via marketing automation.
Take e-mail as an example. You can probably already look at open rates and click-through rates. What about the next steps where leads respond or convert, are passed on to sales and later closed? Identify where tracking and analysis is being handled manually today, and scope out the areas where automation can be introduced. Look at a variety of measurement criteria — volume, velocity, quality, effectiveness and efficiency are just some of the possibilities experts recommend.
Make sure sales and marketing departments are in sync on the critical definitions. For example, what constitutes an “opportunity” vs. a “lead” in your organization? What will ultimately count as a marketing-qualified lead (MQL) versus a sales accepted lead (SAL)?
How Can The Boundaries of L2RM Be Extended?
Although the “L” stands for “leads,” true L2RM isn’t just about generating the possibility of a sale, but assessing the impact marketing departments can have on retaining customers and encouraging loyalty. That’s why it’s critical SMBs ensure they work with a partner who can not only supply marketing automation but CRM where data can be easily integrated and analyzed.
Some call this ROMI – return on marketing investments. That may be overly complex for an SMB, but the point is to set up a process that ultimately provides richer data that sales can use within the CRM. After all, a considerable amount of spending in B2B happens in teams and are not impulse buys but carefully considered purchases. L2RM offers a clearer window into that process that benefits the entire organization.
L2RM may sound like the Holy Grail, but it’s a good way of prompting greater collaboration between sales, marketing and even the top leadership of a company in coordinating everything they do more effectively. Here’s hoping 2016 will be the year the first big L2RM success stories start to get told.
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