Light at the End of the Funnel

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:

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:

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:

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:

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.

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