By John Cheney, CEO, Workbooks
Unless a company is using its CRM system to measure the quality of leads at every stage of the sales process, it cannot possibly get the best value from its marketing budget – or marketing agency!
Reallocating Marketing Spend
The way organisations allocate marketing budget has changed fundamentally over the past decade. From the traditional print advertising, public relations and trade shows, today’s SMEs are now responding to the hype around inbound marketing and working with any number of agencies for Search Engine Optimisation (SEO), Pay per Click (PPC) and social media.
These agencies are, of course, excellent at demonstrating their value to the business, using a raft of measurements to prove the quality of the campaign – from website visits to conversions and brand awareness. These metrics will often look fantastic – and make life far easier for the Marketing Manager to make the case for additional budget. But how much impact does higher numbers of website visits have on a business’ top line revenues? If the CFO turns the tables and asks the Marketing team that question most, to be frank, will have little or no concrete information.
Why are marketing teams failing to make the essential connection between leads generated and sales made? This is standard practice from the days of Trade Shows – albeit the team was dealing with smaller numbers of people who were, by their mere presence at the event, clearly interested in some aspect of the product/service portfolio.
But go back to first principles. The objective of marketing activity is to generate sales; it is to provide the sales team with excellent, qualified leads that support an effective and productive sales process. It is not, for example, to deluge the UK-based sales team with leads that are primarily pan-European or to simply boost the company’s key word ranking. Unless these activities can be shown to generate more business, they are pointless.
Sadly, if a marketing team accepts the agency’s digital marketing uplift figures at face value, these are often the results. And this is not the fault of the marketing agency. Without clear, accurate feedback on the value of the leads being generated, the marketing agency can only continue with its, albeit sophisticated, but scattergun approach.
Tracking Leads with CRM
Marketers need to scrutinise in detail the ‘leads generated’ and determine whether the leads are within the company’s key target markets and geographies; whether they convert into the expected sales pipeline at the ratio expected; and ultimately into closed deals. Essentially, companies need to measure, and not just estimate, the true return on marketing investment.
The only way to determine an accurate ROI is to track the leads throughout the sales process. Using an effective CRM system a business can follow the progress of the unqualified leads that arrive at the web site. The first stage is typically Marketing Qualified Leads (MQL) - those that meet the basic qualification criteria, such as geographic region or size of company. The next stage is usually Sales Accepted Leads (SAL) or Sales Qualified Leads (SQL), those leads that meet most of the normal BANT qualification rules - Budget, Authority, Need and Timescale. Most will then consider a conversion into an ‘opportunity’ for the sales team when all four criteria are met. But, finally, and most decisively, ‘closed/won’ which enables the finance team to generate an invoice – the ultimate proof of lead value!
Using the CRM to report all the way through that journey provides a clear and accurate measure of the number of unqualified leads generated by the agency that actually resulted in invoices. Armed with this insight a company can hold its marketing agency – or agencies – far more accountable. It can demonstrate that simply increasing lead generation from 100 to 400 per month is of no value if the number of MQLs or SQLs has not changed. Critically, by sharing this information with the marketing agency, the company can drive better results. Provided with accurate information about which campaigns generated the best leads, the marketing agency can immediately start to tailor activity and refine campaigns to deliver more of the same and drive up the overall value of investment.
Today too many marketing departments are happy to measure on the basis of overall lead generation numbers not quality. But believing the information the agency delivers from Google Analytics or search engine result tools is not just short sighted, it is lazy. Marketers need to get real value from an investment in inbound marketing and that means understanding just how those new leads perform. Without this insight companies are missing the opportunities provided by the flexibility and power of today’s marketing tools and constraining an agency’s ability to quickly refine campaigns and turn up the dial on successful content and activity.
Given that many SMEs are spending several thousand pounds per month on digital marketing – many on PPC alone - and a subscription-based CRM system can be acquired for just a few hundred pounds, why are more companies not actively exploiting end to end lead tracking to constantly challenge and improve the quality of digital marketing activity?
Digital marketing offers companies an unprecedented opportunity to measure ROI. By failing to close the loop between marketing investment and sales, that opportunity is being wasted. Without an accurate understanding of the cost per lead, how can a business determine whether the agency is delivering value for money – or whether that investment could be better placed elsewhere?