Light at the End of the Funnel
By Virginia Sharma
I was recently invited to a C level conference which was sponsored by the who's who of the IT industry: IBM, Oracle, SAP, VMWare, Microsoft and others. This impressive turnout clearly demonstrates the investment technology vendors are making in educating, not only IT executives, but also business leaders like CEOs, CFOs and CMOs on how technology can help their businesses.
For 15 years, I not only attended but also hosted these types of conferences around the world. The lingo has evolved. From e-commerce and virtualization, every speaker now talked about cloud and big data. But the takeaways are the same. Embrace technology, transform your role or perish. We all walk away inspired but also anxious about being left in the dust.
Event over, I came back to work and reality set in quickly. I, like most marketers, face the typical roster of challenges. How can I deliver successful demand generation campaigns that deliver quality leads to the sales team and see those leads close and deliver revenue that is trackable and meaningful to the business? Despite all the technology innovations we talk about , we still suffer from the “Leaky Funnel” syndrome, a term that I learned on a Forrester webinar in 2006. Almost 10 years ago.
10 years later, despite great advances in marketing technology and enlightened modern marketers, B2B marketing campaigns have seen little improvement in ROI and conversion rates. The relationship with sales continues to be fragile. So where is the disconnect?
First, the good news. Content, web and mobile marketing have increased the volume of leads at a lower cost (than traditional events). Big data analytics has improved audience targeting so that we can deliver the relevant message to the right audience. Cloud based CRM systems have helped us democratize metrics, so that field marketing managers can track their leads through the sales cycle and manage their spends. Two thumbs up for modern marketing powered by technology!
Unfortunately, most marketing generated leads die on the vine. Some die because they are of poor quality to begin with, but somehow make it through the filters (my experience is that this is between 10-15% of the marketing pipeline). Some die because the prospect doesn't have the requisite budget, an urgent need or is still scouting for the right solution.
I believe there are human behavioral factors at play here. In the last decade, while technology was transforming marketing, the B2B sales process remained more or less similar to what it was when I had started my career. We have hunters and farmers. We have deal makers. We have a book of business and a 12 month quota and we are paid based on the size of the deal. We have wins and losses. We have sponsors and decision makers.
In the meantime, buyer behavior has changed dramatically. Here are some of the ways:
- There is no “one” decision maker. Not only are more people engaged in the purchase decision, every one of those stakeholders today, need different information.
- Technology is more accessible. It is possible that some progressive teams or individuals in an organization have piloted the proposed solution through an online self-service model even before the organization makes an enterprise wide commitment to it.
- Multi year contracts are a thing of the past. Now buyers want to pay as they go and would prefer flexible contracts with service options than a guaranteed price or working with a marquee brand name.
While some marketing teams still continue to rely on telemarketing agencies to cold call on rental lists, smart marketers have been able to adapt to this new buying process with the help of technology. For instance:
- Personas and their associated buyer journeys inform our marketing and channel/media strategy.
- Data analytics and visualization allow, to monitor the performance of content and engagement by channel.
- Easier to use web development tools make tweaking campaigns easier.
- Company websites allow smaller businesses to educate themselves, chat online and try and buy solutions at low risk.
Unfortunately, when it comes to sales, technology hasn’t influenced the process or approach, as dramatically. Sure, CRM applications have evolved to cloud based CRMs. Social selling is gaining traction. At LinkedIn, we encourage teams to adopt social selling (for more on this, follow Mac Witmer of the LinkedIn Sales Solutions team, a millennial social seller who blogs on the topic). But in many other companies (even successful ones), the selling process hasn’t changed much other than fresh faces joining the sales ranks quarter after quarter.
Meanwhile, the customer has evolved.
Marketing has followed suit and the leads being generated from modern marketing campaigns are well, modern leads. So I think sales, being the frontline of any organization, need to tackle these modern leads differently.
Think of the analogy of parenting. I was the youngest of 3 kids and I grew up in the 90s. My parents did a great job of raising my older sisters so by the time they got to me, they thought they had it all worked out. But I was from a different generation and I was exposed to new things. Had my parents adopted the same parenting skills with me as they did with my sisters, I would have rebelled. Modern leads are the same. If we handle them the same way, they will run away, probably with our competitor!
Marketing and Sales need to become modern parents together, which starts with changing the dialogue between the two functions. Deeming modern leads as a waste of time “low quality” or “unqualified” leads is akin to giving up on your “different” or “special” kid. You need to understand them before you declare them a lost cause.
In this new dialogue, sales and marketing leaders need to deliberate on:
- What they should do with leads that are interested but not ready to sign a purchase order
- How they nurture leads through both human and automated systems
- How they influence those leads on the fence, to make the leap
- Using context, not legacy to determine who the decision maker is
These are hard conversations but they are necessary. If swiped under the rug, the hole in that already leaky funnel will continue to grow. Somewhere between interest and desire, prospects will fall off, either because they were not convinced of the value, or the product fit. Our precious leads will run away.
Reverting to more traditional marketing techniques like events is not going to reverse the trend either. To understand, we just have to look at our own buying behaviors. Our decision to buy anything is seldom singularly tied to one event, or one mailer, or one search query, or one sales call, or one ad, or one referral. It is a combination of all these working together in tandem.
What can marketing do proactively?
Marketing needs to keep their eye on the true north and support the changing dialogue with modern ways to measure marketing effectiveness. Here is a great post by Douglas Karr that highlights so leading indicators organizations should look at.
Marketing must evolve its role as well. Here are some of the ways:
- We need to focus on demand management, not just demand generation.
- We need to clear define and agree on lead passing criteria with our sales partners.
- We need to get 360 feedback on which campaigns generated the best leads and which ones should be aborted.
- We need to develop sales enablement materials at the same time as marketing campaign assets and not have sales be an afterthought.
- We need to co-develop a channel strategy where small opportunities are routed to the self serve channel which results in better margins for the business and less wasted selling hours.
It’s time to move forward not backward. No one I have met yet has cracked this, but if you have some good tips do share them via the comments!
Meanwhile, take care of those precious leads, will you?!
This post was written to mark one year in my new role but also as an opportunity to reflect on what we have achieved and where we need to go next and how we can become world class. It is based on my own opinions and not those of my employer. Special thanks to Dev Das for contributing to this post.
Read more from Virginia Sharma in our Clubhouse.