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Demand, Action —or the more modified version of this pipeline — Awareness, Interest, Consideration, Purchase —is outdated.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:
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.
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.
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.
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.
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.
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.
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.
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