CRM

The Six C’s of a Customer-Centric Marketing and Sales Pipeline

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Just like Sales, Marketing is responsible for managing a predictable, reliable demand generation pipeline with a plan that ultimately produces higher value opportunities and maximizes revenue.

We believe that the traditional approach to the pipeline — Awareness, Interest, Demand, Action —or the more modified version of this pipeline — Awareness, Interest, Consideration, Purchase —is outdated. Why? Because customers are no longer passive recipients or a sidelined spectator.

In today’s environment, customers are actively engaged in the buying process, leveraging a mix of vehicles from search engines to customer generated blogs and reviews, from online communities to social networks, and from broadcast to personalization designed to create engagement and enhance experience. Therefore, how we approach, define and leverage the pipeline must also change.

Marketing and Sales teams have tried to tackle the change by jointly defining what a qualified lead is. This is working for some companies but not all. Why? We have to change how we think about the customer engagement process, not just our terms.

One of the best ways to change our thinking is to alter the language we use to define and describe the customer buying pipeline.  However just addressing our thinking is not enough in the complex, multi-touch, digital marketing world we live in. In addition to shifting the paradigm it is critical that we store all of the information coming in from our customers and prospects so we can track and measure the effectiveness of our marketing efforts, and the best place to do this is in your CRM system.

Perhaps this six step idea of how customers engage will strike a chord with you and will more accurately reflect how Marketing can measure its contribution. These six steps are:

. Contact

. Connect

. Conversation

. Consideration

. Consumption

. Community

These may seem like a new twist on an old idea, but language matters. These labels aren’t about what we do TO a prospective customer, but rather what we do WITH them. These revised labels suggest collaboration between the buyer and your company. Another key difference from the traditional approach is that these labels are behavioral in nature. This makes it easier to define what behaviors for each measurable stage you want to be able to affect and measure. Together, these steps create the string or series of behavioral events most prospects exhibit on their way to becoming and remaining a customer. Let’s briefly examine each of these.

Contact

While awareness is an important factor, what really matters is establishing contact. Prospects may be cognizant of your company and its products and services but until they demonstrate some degree of interest, you may be wasting time and money. Making contact means you need more than a vague idea of the market or customer set, you must have actual contact information. For some organizations, they are just beginning to build their contact database. For others, they have an extensive existing contact database they may be adding to and maintaining.

For most companies, though, this information is stored in their CRM systems, which if set up properly tracks every single customer or prospect you are engaging with.  CRM systems, such as salesforce.com, are the basis for all Sales and Marketing campaigns so when getting ready to contact the people in your database you need to make sure you have a well thought out lead and contact lifecycle built to capture all this contact information.  If your response lifecycle is constructed properly you can “count” the number of people who gave you their contact information and permission to contact them.

Connect

With contact made the next thing is to connect. What is the difference between a contact and a connection? A contact is an observable signal of hello from a person; it doesn’t mean they are eager to get to know you better. A connection suggests at least the virtual exchange of a handshake and the establishment of some type of rapport. You can approach measuring Marketing’s impact on creating connections in much the same way as we measured contacts: the number of connections made, the cost to acquire and maintain, and the rate of conversion from connection to conversation. We’ll be able to use a version of these metrics for each step.

Unfortunately, you can’t tell how deep a well is by measuring the length of the pump handle. That is, just because the connection has been made, doesn’t mean you have a customer or even someone who is inclined to engage in a conversation beyond the casual and polite visit to borrow a thing or two or yack about the weather. It’s about becoming a follower — downloading material from your website, signing up for your newsletter, participating in your webinars, etc. This is why the conversation stage is so important. This is the first stage that truly signals more than a passing interest.

Connection is perhaps the most important stage to track when measuring you marketing.  From a metrics perspective the connection is all about who responded to your campaigns – how many hand raises each campaign produced, how every Marketing campaign contributes to the Sales pipeline of your company, etc.  For this to be as effective as possible tracking the results of these connections in salesforce.com (or whatever CRM solution you use) is very important because it keeps Sales and Marketing on the same page and gives everyone context for the conversation that is about to start.

Conversation

Now we’re talking! That’s the best way to describe the conversation stage. There’s a flow of information back and forth between prospects/customers and you. Both parties are engaged. This is where the rubber meets the road. You cannot acquire a customer that requires a considered purchase without a conversation or series of conversations. Once the conversation is in play, the next step is consideration.

Consideration

We must understand the difference between a conversation and consideration. Just because we have a conversation in play with a customer doesn’t mean you have a qualified opportunity that is seriously considering purchasing from you. Consideration involves customers/prospects applying careful thought to your offer and company and weighing their options. Different marketing vehicles, such as customer references, case studies, and third party white papers, will be deployed at this stage to help the customer/prospect build preference and predisposition toward your offering. At this stage it is possible to determine whether you have an opportunity worthy of sharing with sales.

Time is money so in addition to measuring the time it has taken to move a contact to this stage you can begin to quantify the value of the opportunity as well. We can measure Marketing’s financial contribution to the pipeline.  One of the best ways to quantify Marketing’s contribution to the pipeline is by leveraging weighted campaign influence as opposed to traditional Marketing ROI.  Weighted campaign influence enables marketers to attribute multiple campaigns to every opportunity but also assign different campaigns certain weights, because it is highly unlikely that every campaign touch played the same role in creating an opportunity.  Check out Full Circle CRM’s description of campaign influence to learn a little more about this metric.

Consumption

Even though the opportunity has now moved to the domain of Sales, Marketing still plays a role in converting the opportunity from consideration to a contract to consume or an actual consumption of the product or service. And upon consumption, Marketing can now measure the overall conversion rate, and time, the cost from contact to customer, the cost to acquire, and Marketing’s “win” rate (how many of the Marketing opportunities closed and how this rate compares to the win rate of non-Marketing generated deals).

Leveraging your CRM solution to track your company’s Marketing funnel is a great way to concretely track this.  For example, you can set up reports on your Sales, Telesales, and Marketing funnels inside of salesforce.com to see the results of the handoff between Marketing and Sales as well as the volume, conversion rates, and velocity of leads generated from your campaigns.  You can see where Marketing is effective and where it can be improved.

Community

It would be a shame to stop investing in a relationship that has just begun. A customer is your most important asset. Customers are also your most important advocates. In the world of customer generated content, blogs, social networks, and product reviews, marketing organizations need to focus on developing their customer community, the final C in the pipeline. There are numerous ways to build this community, such as using Facebook and LinkedIn or other social networks to create a means for your customers to engage with you and each other. Hopefully these six key measurable stages for developing, implementing and measuring Marketing’s contribution to the opportunity pipeline offer you a valuable approach for understanding how to measure the engagement of your customers. It also enables a more collaborative conversation with marketing and sales. With a new year on the horizon, now is the time to revisit how you frame your pipeline.

See part one of this conversation at the Full Circle CRM Blog

Does Your Marketing Team Have the Right Stuff?

Posted on Updated on

The 
Right 
Stuff,
 a
 1979 
book 
by 
Tom
 Wolfe, 
chronicled 
the 
sequence
 of 
events 
bridging 
the 
breaking 
of
 the
 sound
barrier 
and 
the 
Mercury 
space
 expeditions.
 The 
book 
(and 
subsequent
 movie)
 explored
 why
 the 
Mercury 
astronauts
 accepted 
the
 danger
 of
 space
flight,
 as 
well
 as 
the 
mental
 and 
physical 
skills
 required 
of 
them 
to 
do 
their 
job—in 
other 
words,
 the 
”right 
stuff.”Image

Recent 
studies 
suggest
 the 
need 
for 
many 
marketing 
professionals to
 re‐skill
 and 
re-tool.
 Only 
about 
5
 percent 
of 
marketers 
surveyed 
in 
a 
recent 
CMO 
Council 
study 
are 
highly
 satisfied 
with
 their 
levels 
of
 accountability, 
operational
 visibility,
 and 
marketing 
output. 
Most 
see 
plenty
 of 
room 
for 
improvement.

So what skills
 and 
tools
 are 
needed for 
your 
organization 
to 
have 
the 
right stuff?

Regardless
 of 
company 
size 
and 
industry, marketing 
teams 
(whether
 a 
team
 of
 one
 or 
more) 
are under 
increased
 pressure 
to
 drive 
top‐line
 growth 
and
 profitable 
revenue. 
For 
many
 organizations
 this
 means 
acquiring new
 skills 
related
 to 
marketing
 performance 
measurement
 and 
management,
 analytics, 
benchmarking,
 and
 customer
 engagement. 
 Let’s review 
these 
four 
specific
 skills
 every
 marketer
 should 
have 
under 
their 
belt:

• 
Metrics
 and 
performance 
target‐setting. With
 greater
 demand
 for
 marketing 
to 
be 
more
 accountable,
 solid 
metrics, 
performance 
target‐setting,
 measurement,
 and 
reporting skills  
are
 crucial.
 Participants 
in 
numerous
 studies 
comment
 on 
the 
importance 
of
 being 
able 
to 
set
 measurable 
goals
 and 
track 
results. 
These
 skills
 will 
be 
in 
vogue 
for 
a 
long 
time 
to
 come.

•
 Analytics.
This 
is 
the 
ability 
to 
derive 
insights 
from 
data. 
If
 growing 
valuable 
customer relationships
 and 
being
 able 
to 
forecast
 sales 
from 
future
 marketing
 activities 
are 
important,
 then 
analytics 
ought 
to 
be 
on 
the 
top
 of 
your 
skills‐to‐acquired 
list.

•
 Benchmarking.
This 
is 
the 
process
 of
 comparing 
what
 your
 company 
does 
to
 another 
that
 is 
widely 
considered
 to 
be
 an 
industry 
standard 
or 
best 
practice. 
The aforementioned
 CMO 
Council
 study 
indicated
 58
 percent 
of 
respondents 
have 
nominal 
or no 
benchmarking 
capabilities. 
If 
you 
don’t 
know 
what
 the
 standard 
is,
 how 
will 
you 
know 
what
 to 
strive 
for 
when 
it 
comes 
to
 such 
things 
as
 win/loss 
ratios, marketing 
key performance 
indicators,
share
 of 
preference,
 product
 adoption 
rates, and 
so
 on?
 Benchmarks
 are 
essential 
to
 any organization 
that
 believes 
continuous 
improvement
 is
 critical 
to 
the 
pursuit 
of excellence.

•
 Customer 
experience 
management. 
If 
business 
exists 
to 
produce 
and
 serve 
a
 customer,
 and 
marketing’s 
job 
is 
to 
create,
 communicate, and
 deliver 
value 
to 
customers, 
then
 marketing 
is
 your
 organization’s 
ultimate 
steward 
of
 the 
customer
 experience.
 Marketers 
need 
to 
be
 sure 
they 
have 
the
 skills 
necessary 
to 
improve 
customer
 engagement
 and
 touch-
point 
effectiveness. 
They
 also 
must respond 
to 
changes in 
the 
buying
 cycle
 and
 conduct
 voice‐of‐customer 
research in
 order 
to 
retain
 customers, 
create 
loyalty,
 and 
transform 
customers 
into
 advocates 
for the
 company.

Marketing 
operations 
refers 
to 
infrastructure — that 
is,
 the 
tools, 
systems, 
and
 processes in 
place 
to 
facilitate 
customer‐centricity.
 Forty‐four
 percent
 of
 the
 respondents in the CMO 
Council
 study 
are looking 
for 
way 
to 
lower
 costs 
and 
improve 
go‐to‐market 
efficiencies. 
For
 many 
organizations,
 achieving these 
operational
 efficiencies 
requires 
infrastructure changes 
and 
improvements.

With 
limited 
resources, 
where 
can
 you 
get the 
best
 bang
 for 
your
 buck?
 Here
 are 
four
 areas
 for 
investment 
consideration:

1. Operational
 process 
alignment.
 When 
was 
the 
last 
time
 you 
mapped 
your 
operational 
processes 
and 
verified 
marketing 
alignment
 with 
the
 sales,
 product,
 service,
 and
 other 
parts
 of
 the
 business?
 All 
of
 us 
get 
into 
routines 
and 
habits.
 Reviewing 
processes 
and
 updating 
them 
may 
be 
time consuming, 
but 
if
 you 
are 
looking 
for
 ways 
to
 reduce 
inefficiencies 
internally, 
this 
is a
 necessary step.

Many
 years 
ago,
 when 
I
 was 
in 
the
 semiconductor 
industry,
 we
 needed 
to 
find
 a 
way 
to 
reduce 
the 
time 
from 
order 
to 
delivery
 of
 product.
 It
 was 
just 
taking 
too 
long 
to 
get
 product 
to 
customers,
and
 we
 didn’t
 know 
why.
 When 
we calculated 
the 
time 
it 
took 
for
 the 
individual
 steps 
of
 order 
placement, 
manufacturing,
 testing ,
assembly, 
and
 shipping, 
the 
time 
didn’t
 add 
up 
to 
what 
it
 actually 
took.

So
 we 
mapped
 the 
process, 
counting 
the 
time 
product
 was 
”in‐transit,”
 whether 
physically 
or 
in
 some
 other 
way.
 Lo
 and 
behold, 
the 
in‐transit
 time
 was 
off
 the 
charts.
 The
 mapping 
process 
enabled 
us 
to 
identify 
the 
inefficiencies,
 label the white spaces,
and 
put 
in 
new
 processes 
to 
reduce
 and
 even 
eliminate 
them.

2.Market/Business 
intelligence. 
There 
is 
an 
art
 and
 science 
to 
using 
external 
information 
for 
driving 
business 
strategy. 
Business 
intelligence 
applications 
enable 
the
 collection,
 integration,
 analysis, 
and
 presentation
 of
 competitive,
 channel, 
product,
 and 
customer 
information 
to 
derive 
trends 
and 
insights.
 The 
value
 of
 having
 such 
a 
tool 
is 
that, 
when 
used 
properly, it
 enables 
you 
to 
begin 
conducting
 scenario 
analyses
 and
 anticipating 
the
 future.
 With 
the 
insights
 derived
 from 
business 
intelligence,
 there 
is 
the
 potential 
to 
anticipate 
the 
development 
of
 new
 markets, technological
 turning 
points,
 and 
how 
the 
competitor 
will react.

3. CRM. 
If 
the 
marketing
 organization 
is 
responsible 
for 
the 
relationship 
between 
the
company 
and
 the 
customer,
 then 
it
 stands 
to 
reason 
the 
organization
 needs 
tools 
to 
facilitate 
this 
relationship.
 As 
you 
know, 
there 
are 
a
 range
 of
 CRM 
tools
 out
 there,
 so 
selecting
 the 
right
 one
 can 
be 
a
 daunting 
task.
 Even
 so,
 in 
today’s 
environment
 a
 company
 can’t
 afford
 to 
operate
 without 
a
 formal
 approach
 to
 customer
 relationship 
management.
 Of
 course,
 once
 you 
have 
the 
tool
, the
 next
 biggest
 hurdle 
is 
using 
it.

4.
 Performance 
management.
 The 
ability 
to 
use 
analytics, 
reporting, 
and
 dashboards 
to 
assess
 marketing’s
 effectiveness, efficiency, 
financial
 contribution,
 and
 progress 
toward
 achieving 
pre-determined
 goals 
is 
performance 
management. 
In 
the 
end, 
marketing
 must
 demonstrate 
its
 value, 
which 
lies 
in
 how much you are “moving 
the 
needle.” This 
necessitates 
reporting
 on
 performance, impact, 
and
 ROI from
 the
 program 
level 
up.

Progress 
doesn’t
 come 
without
 missteps,
 misfires,
 and failures.
 Winners 
look 
for
 ways to overcome
 challenges
 and
 continuously 
improve.
 They
 seek
 outside 
help,
 new 
ideas,
 and new 
skills.
 While
 attending 
a
 Webinar,
 reading 
a 
book, 
or
 going 
to
 a
 conference 
helps, consider 
looking
 for
 ways 
that
 will
 enable 
the 
whole 
team 
to 
be 
on 
the 
same 
page
 at the
 same
 time. 
There are 
plenty 
of 
on-site
 and 
online 
programs
 offered 
by 
professional
 organizations 
and 
institutions, as 
well
 as
 by 
firms 
specializing 
in these 
areas.

In 
Wolfe’s 
story, 
the 
national 
heroes 
of 
the 
Mercury 
space 
program 
were 
not
 necessarily 
the 
truest 
and
 best. 
What 
they
 possessed
 was 
the 
right
 stuff, the
 skill
 and 
courage 
to 
”push 
the
 outside 
of
 the
 envelope.”
 Does 
your
 marketing 
team
 have 
the 
right 
stuff?

How Vulnerable Are You to Customer Defection?

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In this article, you’ll learn…

  • Five factors for maintaining successful customer relationships
  • How to identify your most vulnerable customersImage
  • How to calculate your company’s vulnerability index

In the early ’90s, the term “customer relationship management” (CRM) joined the marketing lexicon. Though the idea is often thought to refer to the implementation of some kind of technology, the real idea behind CRM is that the management of customer relationships is a business imperative.

CRM is about deciding which customers or segments to target, and then developing customer acquisition, retention, and growth plans that will attract and keep your best customers. CRM is really about making your customers the heart of your business.Our job as marketers is to acquire, grow, and retain profitable customer relationships to create a sustainable competitive advantage.

How do you measure customer relationships?

We’ve all come to accept that creating customer loyalty is an integral part of any organization’s strategy and focus. Various factors influence the success of any customer relationship initiative.

Here are five critical success factors:

1. Clearly defined business outcomes related to customer acquisition, retention, and growth

2. Agreement about who the customer is and what they want and need from your category (and you)

3. Well-defined customer segments (and their desired behaviors) and customer-experience objectives

4. A documented, integrated customer strategy

5. Explicit measures of success, and the data and processes needed to support the metrics

Customer satisfaction and loyalty are two of the most common measures of success. A variety of models are used to measure and quantify customer loyalty, ranging from simple recency and 2 referral models to RFM and customer lifetime value models. Recent research is examining those models to ascertain which, if any, truly measure customer loyalty.

Many organizations would agree that a loyal customer…

  • Stays with the brand despite competitive offers, changes in price, negative word-of-mouth, and product failures
  • Increases business/engagement in some way
  • Actively promotes the brand to others

Though there are many approaches to measuring customer loyalty, one metric that many
organizations should consider is the Vulnerability Index.Add the vulnerability index to your marketing KPI’s. A vulnerability index serves as a way to measure loyalty in the face of competitive pull. Its purpose is to help you identify your most loyal customers—those who are going to stick with you through thick and thin.

To calculate your vulnerability index, you will need excellent market intelligence about your
competitors’ campaign’s channel, offers, and markets. Once you have this information, follow these seven steps to construct your vulnerability index:

1. Map the competitive activity. Include the competitor’s name, offer, duration of offer, and the offer’s focus area and market.

2. Generate a list of loyal customers in the market where the campaign ran.

3. Map their repurchase and engagement cycle based on frequency and last purchase date.

4. Isolate all the customers whose repurchase or renewal dates fall within the competitor’s campaign period. This is your observation set (OS) and the set of customers who will experience the greatest competitive pull and are, therefore, the most vulnerable.

5. Define your observation period, which is generally the campaign launch date and one purchase cycle after the last date of the competitor’s campaign.

6. Monitor the purchases by vulnerable customers. Track all the customers whose purchases drop during the observation period. These customers constitute your vulnerable set (VS).

7. Calculate the vulnerability index. Divide your VS by your OS and multiply that number by 100:

Vulnerability Index = (VS/OS) x 100.

The index will give you a good idea of the proportion of customers who are succumbing to
competitive pressure and some idea about the level of loyalty in those customers. If the index is high, you know that there is something to worry about. If the index is low, you can assume, with some degree of certainty, that your customers are exhibiting robust loyalty to the brand.

Because Marketing is charged with finding, keeping, and growing the value of customers,
customer retention falls within the domain of marketing. Therefore, marketing organizations
should have at least one objective aimed at retaining customers. In addition to monitoring customer loyalty and advocacy and customer churn, Marketing should also keep tabs on customer vulnerability. If your vulnerability index begins to climb and exceed that of your competitors, you can anticipate that your defection rate is going to increase. By monitoring your vulnerability index, you will know who your most loyal customers are, and you will be able to develop and implement strategies to withstand competitive pressure.

How Marketing Can Go Beyond the “Make it Pretty” Syndrome

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At a recent conference, Sylvia Reynolds, chief marketing officer for Wells Fargo, asked, “When did Marketing become the make-it-pretty department?” Reynolds then reminded conference participants that the fundamental role of Marketing has always been about the customer.

Essentially, Marketing’s role is to find, keep, and grow the value of customers. So what does that mean, and how does a marketer get beyond the “make it pretty” syndrome?

We can use the American Marketing Association’s (AMA) definition of marketing as a guide. The AMA defines marketing as “an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”

By using this definition, we can see that marketing is more than a creative function; rather, it is about a set of four critical customer-focused marketing processes.

Creating Value

Marketing sits in the space between the company’s capabilities and what the customer wants. By understanding the core capabilities of the company, and then matching it with customer wants and needs, marketing drives value creation.

This means Marketing must fully understand the customer. In this capacity, the marketing organization serves as a driver of an organization’s value chain by insuring products and services are shaped by customer expectations and demands.

Communicating Value

To be the chosen supplier for your customer, you first have to be on your customer’s short list. To be on the customer’s short list, you need to know what the customer values. This way you can communicate how your company and its products/services deliver in such a way as to create a preference for your company and its products/services over alternative options.

Every customer touch point affects the customer’s decision and action; therefore, every touch point needs to be tied to and communicate the value proposition.

Delivering Value

By establishing a strong link between customer value requirements and the major value- producing activities in the company, Marketing is in the unique position to enable the company to deliver on customers’ value expectations. Marketing can then use these value expectations to drive customer preference and stimulate purchase decisions.

One way to think of this is that at every customer touch point—whenever a customer will be affected by a decision or action—the people involved in that touch point need to understand and deliver on the value. In some organizations this is known as “moments of truth.”

Marketing is in the unique role of being able to look across all the touch points and monitor whether the value is actually delivered. Through constant monitoring, Marketing can help determine whether it is delivering on its value promise and whether the value proposition needs modification.

Managing Customer Relationships

We need to think beyond technology when we think of customer relationship management (CRM). Instead we need to realize that CRM is a business philosophy in which the customer plays a central, critical role in all business activities.

Though we can debate who “owns” the customer, Marketing is in the ideal position to be the centralized point for aggregating, segmenting, and analyzing customer data. This ability to create a single view of the customer comes with responsibility—to take a leadership role in  creating and managing the processes associated with the company’s customer relationships.

***

For organizations to grow, the leadership team relies on Marketing for more “than just the pretty stuff.” It should be able to depend on Marketing to develop marketing strategies that create and deliver superior perceived customer value.

With this emphasis on increasing value, Marketing can help the firm achieve growth by penetrating existing segments, developing new markets, and creating new products and services.

Accordingly, marketers should be willing to own and be accountable for these four processes if they want to serve as growth champions within their organization and leave the “make it pretty” syndrome behind.