Many companies are unsatisfied with the ROI of their digital market budgets, as they see how few of their marketing leads convert into actual sales; yet they fail to realize what part of their process is not working. After all, the marketing message appears to articulate the company’s value proposition well and many new contacts are established with people having the right target profile.
The Leaky Bucket Syndrome
What follows may be nothing new/original for sales and marketing pros, but many software companies still suffer from this syndrome.
I have heard VPs of Marketing exclaim: “I have generated hundreds of leads this past month and Sales only closed a handful of them”, blaming Sales for not capitalizing on that wealth of contacts. What they don’t realize is that
99% of the people who contact the company’s website, including the ones that fill in a form and download a paper, are NOT ready to buy.
In these companies, we still see marketing passing the unqualified marketing leads to sales, who proceed to qualify the contact’s level of interest and readiness to move forward. Sales will focus on the ones that seem to be ready to buy now or in the near future, which typically means that they will end up disqualifying 90% of the unqualified Marketing leads out of the sales & marketing funnel.
The result is that while most of the digital marketing budget went into filling the funnel, 90% of the leads generated by Marketing are discarded in the process. More cost is often dumped in the process, as these companies rely on expensive sales teams for lead qualification and nurturing.
Extracting Value out of Unqualified Marketing Leads
Can any value be extracted from contacts that are interested, but are not ready to buy? After all, we are talking about the vast majority of contacts that Marketing managed to get into the funnel. Yes, as long as
the qualification process changes from being a dis-qualifying filter to becoming a factor of aggregation and of qualifying-in.
Instead of leaving interested contacts behind because they are not ready to buy, why not engage them and build relationships that could turn into something more in the future?
Here are 3 things that you can do with unqualified marketing leads:
1. Retain them as an audience
These contacts found something interesting in what your company had to say. If the company’s products are not the answer to their needs today, they may at some point in the future.
Build your own community. This will help you build a critical mass of awareness and relevance. The value of such an audience can be translated into: credibility, gravitas, insight, presence in marketplace.
2. Remain relevant
Keep engaging and nurturing your community with content that is relevant and useful to them. Retain mind share for future possible purchases. Turn contacts into non-customer references. Have contacts share their insights so that your community becomes a source of deeper knowledge for them and for you.
3. Be there when they’re ready
Create a seamless path to the next level of engagement within your community. Provide them with content that helps them become experts in your domain and better appreciate what you have to offer. Measure their level of engagement so that you are ready for them when they are ready to act.
Several companies have been successful in building large communities of interested contacts as part of their Inbound Marketing Strategy and turn them into their most effective lead generation mechanism. Companies like Apptio have greatly improved the economics of their sales and marketing funnel by moving the education and nurturing functions from sales to marketing, as part of their effort to develop their own ‘community’.
For the funnel to progressively build deeper levels of customer engagement, companies will have to take steps at every stage.
Five Key Execution Steps
1. Have something to say
Develop ‘remarkable’ content that matters to customers. This must be content that interests them, not product info, not company overview…
2. Create digital destinations
Create places (website, blog, community,..) people will want to visit and revisit because they find interesting content and people.
3. Provide reasons to come back
Publish new content on regular basis. Put someone in charge of content development so that it actually happens.
4. Develop an easy engagement process
Create a step-by-step educational and nurturing process to help customers move through the various stages of the funnel. Make sure to use the right content at the right stage of the funnel to help contacts move to the next step. Every interaction needs to provide 2 choices: maintain the relationship or deepen it. Provide both.
5. Measure and adjust
Monitor what content is most interesting to people and what helps them move along the funnel. Measure % conversion rates and the time it takes to move from one stage of the new funnel to the next. Improve iteratively.
The Organizational Impact
The respective roles of Sales and Marketing change with this picture, as Marketing expands its qualification and nurturing role and Sales harvests higher quality leads.
Lead qualification and nurturing needs to be owned by Marketing who will leverage the most active customers as animators in the community, as part of a one-to-many education and nurturing process, so that customers can attract others to follow their lead. This is much more cost-effective than one-on-one qualification and nurturing done by Sales. Marketing should also help score the level of engagement of prospects based on criteria mutually agreed with Sales, so that high-quality Marketing Qualified Leads (MQL’s) can be handed off to Sales.
The role of Sales is to take these MQL’s, finish the eventual evaluation process, manage them through the buying process and close them. They should be spending no time doing the early qualification, education and nurturing and spending most of their time what they are best at,… which is selling!
A systematic approach to building, educating and nurturing captive audiences with the goal of delivering high-quality MQLs will require a more analytical and sales-aligned mindset in the Marketing organization, starting from the VP of Marketing. Companies that seek to improve the economics of the sales & marketing funnel have to start looking at digital marketing more as a science than an art.
Be social and share with companies that may still suffer from the Leaky Bucket marketing syndrome.