Increasingly, demand generation program success is determined by sales-pipeline or revenue contribution. In fact, according to DemandGen Report’s 2018 Benchmark Survey Report, 28% of B2B marketing organizations have specific revenue-based quotas, a 5% year-over-year increase.
Dialing up success was much easier just five years ago when B2B marketing programs were largely measured against lead volume goals. Today, according to the Benchmark Survey, total leads and inquiries is a primary success metric for just 14% of programs.
Today’s need to show greater down-funnel return on marketing investments is pushing marketers to identify the top-funnel efficiencies that will enable them to focus more on converting leads into pipeline opportunities, customers and revenue.
Getting The Most From Your Demand Generation Budget
How do the most effective B2B demand marketing teams increase efficiencies to maximize ROI?
Since program inefficiencies vary significantly from one B2B organization to the next, the first step is to identify a baseline. It’s very easy to be so involved in the day-to-day marketing activities that efficiency problems that would be glaring to the outsider can go unnoticed by your team. When you face added pressure to drive more ROI from the same investment, you need to take a step back and look at your strategies, tactics and supporting processes from a fresh perspective.
9 Questions That Reveal Inefficiencies
Auditing the current state of marketing affairs to identify wasted spend, time and effort within a marketing program can reveal valuable opportunities for both immediate fixes and gradual optimizations that will have a long-term benefits to revenue.
Before making any changes, however, you need baseline data to identify areas that will have the most impact. These nine questions can reveal how people, processes and technology are operating together – or failing to work together efficiently.
10 Questions to Ask:
- What demand generation channels and tactics are currently being used?
- What happens to new contacts/records once they complete a lead form?
(For example, are they routed to specific nurturing campaigns/programs, or simply handed off to sales?)
- How are new contacts getting into the database?
(This answer may differ depending on the channel.)
- How much time is spent processing contact/lead data to get it ready for follow-up?
- How quickly (or slowly) do new contacts receive their first follow-up?
- What is the conversion rate between each funnel stage?
(And, how do those conversion rates measure up against industry averages, such as those provided by SiriusDecisions and CEB?)
- Which combinations of channels/sources, tactics and assets are generating contacts that convert down-funnel, and which aren’t?
- How long is the typical sales cycle?
- Where do prospects typically get stuck within the sales cycle?
(That is, which funnel stage seems to have the most under-performing conversion rate, presenting the biggest roadblock?)
- What is the average cost to acquire a new customer?
Answering questions such as these often reveals some red flags, like lead gen sources that aren’t performing up to par, or a previously unknown amount of time and resources being wasted on non-strategic manual tasks. Chasing down each red flag to a root cause can reveal easy tweaks or changes that may have an immediate impact on results.
To learn more about how to calculate LTV, CoCA and derive intelligence from these measures, we recommend the Integrate blog Demand Generation Analytics: 10 B2B Metrics that Actually Matter
3 Common Improvement Opportunities
Opportunity #1. Improve Lead Velocity
Perhaps the B2B marketing team runs a lot of in-person events to generate demand at the top of the funnel – maybe 50 events per year, at an average cost of $2,500 per event. However, if it takes an average of two weeks to manually process the leads from the events and get the leads into nurture tracks and/or over to sales, it may mean fewer sales opportunities and less marketing-influenced revenue.
If you have a lead velocity problem, the solution is probably process-automation, such as an automated lead processing and routing tool. By automating lead processing efforts, marketing can get event-generated leads into follow-up queues faster, reduce manual effort and convert more leads into qualified opportunities.
For an in-depth look at this subject, we recommend Lead Velocity: Why It Matters, What to Measure & How to Boost
Opportunity #2: Improve Lead Data Quality
After nearly a decade of working with myriad B2B marketing organizations, I’ve witnessed firsthand the disastrous effects of poor lead data quality on businesses. Last year I analyzed more than 3.6 million leads and found that 45% were unmarketable.
This is the industry average, and the costs to organizations in demand gen budget, marketing automation data usage, resources, time, analytical clarity and team morale are hard to overestimate. However, half the leads are kicked back due to invalid contact data, and the sales team rejects another 25% because they’re not qualified.
Say in a given year, your organization purchases 25,000 leads at $40 apiece via a number of third-party lead gen sources. If even just 20% of these leads are invalid (way below the industry average) and we use industry average conversion rates, that means your business is missing out on an additional $600,000 in revenue, or 40% ROI, from the same demand gen investment. And this doesn’t even account for MAP data usage savings or savings in marketing and sales team time typically spent on dealing with bad leads. Needless to say, this presents a good case for investing in data validation and enhancement tools.
If you’re interested in learning more about how poor lead data quality can affect marketing and sales efforts, read the Cost of Bad Leads Report.
Opportunity #3: Improve Program Performance Visibility
Commonly, B2B demand gen organizations lack automation at the top of the marketing funnel. Top-funnel demand generation campaigns are often disconnected from lower-funnel systems and processes, making it difficult to track which top-funnel channels, sources and tactics are delivering big returns on investment. The problem isn’t that marketing teams lack data, it’s just that data is typically scattered across numerous systems or, worse, spreadsheets. Compiling all this data to analyze it in a meaningful way is nearly impossible without some type of closed-loop reporting tool.
If holistic program visibility are challenges, there’s a business case for a closed-loop KPI reporting tool, which integrates with the B2B marketing organization’s MAP and CRM tools in a centralized dashboard. This allows marketers to see the channels, sources, creative assets and audiences driving the most ROI and make real-time campaign adjustments to improve results.
Research Reveals Demand Generation Target Goals are Tougher Than Ever
The core objectives for B2B marketing have not changed, according to the DemandGen Benchmark Survey Report:
- 73% of B2B marketers focus on increasing lead quality over lead quantity
- 72% of B2B marketers intend to increase campaign conversion rates
- 61% of B2B marketers want an improved ability to measure and analyze marketing’s impact
What has changed in recent months, however, is the expectation that marketing will assessed on its contribution to organizations’ revenue growth.
If your B2B marketing team is called upon to ensure your demand generation budget leads to a significant return in the form of revenue, take inspiration from some of the most effective demand gen marketers. Create a demand gen baseline to understand successes and identify opportunities for improvement. We’ve found that improving lead data quality, increasing lead velocity and supporting program performance visibility are three of the best ways to quickly boost demand gen ROI.
If you’d like to know how poor quality lead data may be undermining all of your marketign and sales efforts? Get your copy of the “Cost of Bad Leads Report” here.