lead generation how-to guidegeorgettepann.com/pdf/memberinnercircle/downloads/... · 2012. 10....

Marketing Templates

Lead Generation How-To Guide By Ruth P. Stevens

IN TR O DUC T I ON

Marketers can enhance the productivity of salespeople dramatically

by providing them with a steady stream of qualified leads. Sales leads

reduce the amount of time salespeople need to spend making cold

calls and increase the time they can be in front of likely prospects,

selling and closing business.

Generating leads effectively involves seven steps.

1. Set campaign objectives

2. Select the most effective media

3. Develop a compelling offer

4. Plan for response

management

5. Qualify the

responses

6. Develop a

nurturing program

7. Measure your

campaign results

This MarketingProfs How-To Guide will walk you through the steps,

providing worksheets and examples to help you revamp your lead

generation processes.

LEAD GENERATION HOW-TO GUIDE Your Template for Lead Generation, Qualification and Tracking

1 Lead Gene ra tion

How-To Gu ide

Marke ting Te mpla tes

C O N TE N TS

Introduction Page 1

I. Set Campaign Objectives

Objectives, Examples, Your Goal

Calculate the Exact Number of Leads

2. Select the Most Effective Media Page 7

Communications Medium to Use and Avoid

3. Develop a Compelling Offer Page 9

Checklist of Proven Offers

4. Plan for Response Management Page 11

Inquiry Media, Handling and Fulfillment

5. Qualify the Response Page 13

Setting Qualification Guidelines and Criteria

6. Develop a Nurturing Program Page 17

Communications and Lead Development

7. Measure your Campaign Results Page 19

Seven Techniques to Measure Sales Results

Calculating the Cost per Sale

Appendix Page 28

Author Page 29


2 Lead Gene ra tion

How-To Gu ide Marke ting Te mpla tes

I . S E T C A M P A IG N O B J E C T IV E S

We all know that you won’t be able to recognize success unless you

clarify exactly where you are heading. Here are some steps to help

you set your lead generation objectives and determine your success

factors. Try selecting from this list the most appropriate objectives

for your campaign. Recommendation: Select one primary objective

and no more than two secondary objectives.

Objectives Examples* Your Goal

Number of leads

expected 500 leads

Number of leads

qualified 20% of all leads

Number of leads

contacted 50% of qualified

Lead-to-sales

conversion ratio

20% of contacted leads

(or 10% of

qualified leads)

(or 2% of all leads)

Time frame for

sales to close 3 months

Cost per lead $25

Revenue per lead $5,000

Expense-to-revenue

ratio (ROI) $12,500 : $50,000

* NOTE: Numbers are for demonstration purposes only.

PART 1 YOUR MARKETING CAREER GOALS


3 Lead Gene ra tion


I . S E T C A M P A IG N O B J E C T IV E S ( co n t . )

It’s very important to select only two or three objectives and to make

them very specific. Most campaign planners decide in advance how

many leads they expect the campaign to produce and at what cost.

It’s also important to generate only the number of leads that the sales

team needs to do the job. If you give the sales team too many leads,

what happens? They throw them away, and you’ve wasted a lot of

time and money. If you give them too few leads, they won’t make

their quota—and everyone in the business will suffer as a result.


4 Lead Gene ra tion



Use this form to calculate the exact number of leads that will make

your salesperson (or group) successful.

Metrics Formula Examples*

Your

Numbers

A Revenue quota

per rep

your number $3,000,000

B Percent of quota

self-generated

your number 40%

C Quota requiring

lead support

A * [100% - B] $1,800,000

D Revenue per

order

your number $60,000

E Sales required C / D 30

F Conversion rate

for qualified leads

your number 20%

G Qualified leads

required per rep

E / F 150

NOTE: Numbers are for demonstration purposes only.


5 Lead Gene ra tion



The numbers here are for illustration only, but they are not atypical in

B2B lead generation environments.

First, examine the sales quota of each territory concerned and subtract

out the amount that will be self-generated through the natural course

of territory management. The remaining amount is what needs to be

supported by lead generation

programs from marketing.

Divide this amount by the

average order size in your

company or category to arrive

at the number of closed leads

required. Then divide again by

the lead-to-sales conversion

rate, to arrive at the number

of qualified leads required

per rep.


6 Lead Gene ra tion


2 . S E L E C T T H E MO S T E F FE C T IV E M E D IA

Not all communications media are equally effective in lead generation.

The media choices that give the best results today include:

Communications

Medium to Use Rationale

Your Web site

(with an offer)

Anyone who visits your site already has a certain

degree of interest in your product. But it is

essential to capture those visitors’ contact

information, so you can continue marketing to

them. Place a simple offer on your home page,

inviting visitors to download a case study or white

paper, for example, in exchange for leaving behind

their email or phone number.

Search engine

marketing

Keyword bidding and site optimization techniques

are extremely effective for lead generation today.

Outbound

telemarketing

With targeted lists, the phone is effective for

penetration within relatively small universes.

Direct mail Direct mail is still the workhorse medium for lead

generation due to its flexibility and the wide

availability of targeted lists.

Dimensional

mail (mail that is

lumpy or comes

in a box)

Mail that comes in a three-dimensional package is

effective at getting past gatekeepers, like secretaries

and mailrooms.

Trade shows, if

the audience is

highly qualified

Trade shows that attract a highly qualified audience

are an excellent choice for lead generation.


7 Lead Gene ra tion


2 . S E L E C T T H E MO S T E F FE C T IV E M E D IA ( c o n t . )

There are many media options that are not working for lead

generation today. The media options to avoid include:

Communications

Medium to Avoid Rationale

Print advertising Most print advertising today is done for awareness

purposes, so it does not generate leads effectively.

However, if you use direct response techniques,

including a strong offer and call to action, print

advertising can be effective in lead generation.

Bingo cards Also known as Readers Service Cards, bingo cards

invite readers to circle a number placed on a print

ad in a trade publication, and then send the

readers’ names to the advertisers. These names

tend to arrive so far after the original interaction

that they are essentially worthless.

Broadcast

advertising

Broadcast can work for some product categories,

like office supplies, but the costs are so high as to

make it risky choice for most companies.

Rental email Due to the scourge of spam, unfortunately, few

companies are finding rented email lists effective

for lead generation.

Trade shows,

all other

Because the cost per contact is so high at trade

shows, horizontal shows generate much waste.


8 Lead Gene ra tion


3 . D E V E L OP A C O MP E L LI N G O F FE R

Like any direct marketing effort, lead

generation offers are designed to motivate

a response. The offer should provide a reason

to act – something compelling enough to

overcome people’s natural inertia compelling

them to stick with the status quo.

It can be a consumer-like incentive, with

personal benefit to the recipient. Or it can

be related to solving a business problem.

Here is a checklist of proven offers that work

in B2B lead generation campaigns.

free information

premium

free trial

free sample

free shipping

free self-assessment tool

seminar or webinar

demonstration

discount

free installation

sales call

free consultation or audit

free estimate

self-assessment tool

ROI calculator


9 Lead Gene ra tion


3 . D E V E L OP A C O MP E L LI N G O F FE R (c o n t . )

If you are having trouble deciding which offer to try, you might begin

with the most effective category among B2B offers, namely: “more

information.” Business buyers need information to do their jobs, and

they welcome information supplied by prospective vendors.

Among the most popular informational offers are:

brochure

newsletter

white paper

research report

case study

article reprint

demo CD

book or video

“10 Tips” sheet


10 Lead Gene ra tion


Example of

a “10 Tips”

Document

4 . P L A N F O R R E S P O N S E M A N A G E ME N T

Before you go out with your campaign touches, you need to have a

well-planned process in place to capture the inquiries so they can be

fulfilled, qualified and managed properly.

Campaign inquiries come through a variety of media, among

them:

Mail: Including business reply mail.

Telephone: To a toll-free number or your company office

number. Scripts must be in place to capture qualifying

information and source code.

Fax: If possible, set up a dedicated fax line for responses, so

they don’t get mingled with regular business communications.

Email: Like phone and fax, email brings with it an expectation of

fast turn-around.

Web: online response form.

Inquiry handling comprises the following steps.

1. Log the inquiry in a database, whether a dedicated lead

management database or the general marketing database.

Match the inquiry against prior sales and marketing contacts to

make sure it is not a duplicate.

2. Fulfill the inquiry with the appropriate materials.

3. Conduct a first screening of the inquiry.

4. Begin the qualification process.




4 . P L A N F O R R E S P O N S E M A N A G E ME N T ( c on t . )

When considering inquiry fulfillment, speed is of the essence. As a rule

of thumb, inquiries should be fulfilled no later than 24 hours after

receipt. Studies show that the faster the fulfillment materials are

received, the more likely the lead is to be qualified.

You may choose to fulfill the campaign inquiry in a variety of ways.

Traditionally, the promised material is delivered in a flat mail piece.

But consider some other ways to mix it up:




Fax

Email

Catalog

Surveys

Sales call

Press releases

Web-based download

Telephone follow-up call

Multi-dimensional mail piece

New product announcements

Events related correspondence

Personal notes,

like congratulations

5 . QU A L I FY TH E R E S P ON S E

Not all leads are created equal. You must find out if the prospect is

ready to see a salesperson, according to pre-determined qualification

criteria. You can find this out via two methods:

1. Ask the qualification

questions on your

response form.

2. Use follow-up

communications to

qualify. (Email is

excellent for

this purpose.)

The most important approach to setting qualification criteria is to

follow the needs of your sales force. It is your salespeople who will be

handling the leads and taking them to closure. They know best the

nature of the sales process and which buying characteristics are most

likely to be indicators of success.

Develop a qualification form suitable for your business. To get you

started, here are some typical qualification criteria used by B2B

companies. Of course, qualification criteria will vary by company and

by industry. So just use this list to help you identify the qualifications

that make sense for your organization.




5 . QU A L I FY TH E R E S P ON S E ( co n t . )

Budget. Is the purchase budgeted? What size of budget does the

prospect have available? You will want to establish categories or

ranges for easier scoring. Some companies request information about

the prospect’s credit history here.

Authority. Does the respondent have the authority to make the

purchase decision? If not, you should try to capture additional relevant

contact information.

Need. How important is the product or solution to the company? How

deep is their pain? This criterion may be difficult to ask directly, but it

can be approached by roundabout methods. "What is the problem to

be solved?" "What alternative solutions are you considering?" "How

many do you need?" "What product do you currently use?"

Timeframe. What is the lead’s readiness to buy? When is the

purchase likely to be? Depending on industry and sales cycle duration,

this can be days, months or even years. Also be sure to ask whether

they would like to see a salesperson.

Potential sales volume. How many departments in the company

might use this product? How much of—or how often—might they need

the product?




Sounds great, but there are many challenges in Content Match:


Predisposition to buy from us. Are they past customers? Are they

similar to our current customers? Would they recommend us to their

colleagues? Are they willing

to call us back?

Account characteristics.

Company size (number

of employees or revenue

volume). Industry.

Parent company.

Some tips:

We are doing an exercise here, but in real life you MUST develop

these criteria in concert with your sales team. Ask them "What

are the characteristics of an ideal lead? How would you describe

someone who is ready to buy?"

Keep your criteria limited. Less is more. Don't ask anything for

curiosity's sake. And resist the temptation to use this process for

market research.

Make the form easy to complete. Use ranges and checkboxes.





Guidelines For Qualification

Possible Criteria Your Requirements

Budget

Authority

Need

Timeframe

Potential sales

volume

Predisposition to

buy from us

Account

characteristics

Other

Remember: Never, ever, pass an unqualified lead to sales.




6 . D E V E L OP A N U R TU R I N G P R O GR A M

When an inquiry is only partially qualified and does not make the

grade of readiness for the sales team, it needs to be nurtured, in a

process sometimes called “incubation” or lead “development.”

Nurturing involves a series of communications intended to build trust

and awareness and to keep a relationship going until the prospect is

ready to buy.

Sources of leads requiring nurturing include:

Partially qualified inquiries. They are not ready to deliver to

sales, according the pre-defined qualification criteria.

Leads returned by the sales team. The contact may have

changed jobs, or the business need

may have changed.

Nurturing can be done via

all kinds of media—telephone,

direct mail, and email being

the most popular.




6 . D E V E L OP A N U R TU R I N G P R O GR A M ( c o nt . )

Here are some typical nurturing tactics:

Catalog mailing

Seminar invitation

Trade show invitation

New product announcement

Newsletter (email or print)

Press release

Survey

Video or CD mailing

White paper, downloaded or mailed

Article or chapter reprints

Testimonial

Case study

Personal communication, like a birthday card or holiday card

Letter from various sides of the company, such as the CFO,

customer service department, engineering, or senior executives

The objective of the nurturing program is to be in touch with the prospect

when he is ready to buy. Things change rapidly in businesses. The only

way we can know when he is ready is by regular communication.




7 . ME A S U R E Y O U R C A MP A I GN R E S U L TS

Business marketers operating in a multi-channel world are frequently

challenged by problems with measuring the results of their lead

generation campaigns. Without solid measurements, it’s hard to

demonstrate the value of marketing and justify the budget. But when

multiple people and functions are involved at various stages of the

lead generation and conversion process, evaluating the contribution of

each element can be close to impossible.

Here are seven techniques to you could incorporate into your lead

generation campaigns to measure sales results. Each has something

to contribute to the mix—and

each has its limitations.

Experiment with applying

them to your situation.

1. Closed loop

Method: Track each qualified lead to its end result,

whether closure, rejection or loss to competition.

Powerful but expensive, so it works best on high-value

products and services.

Usually under-reports results, so it needs to be

supplemented by other techniques.

LEAD GENERATION HOW-TO GUIDE

Your Template for Lead Generation, Qualification and Tracking



7 . ME A S U R E Y O U R C A MP A I GN R E S U L TS (c o n t . )

2. End-user sampling

Method: Select a statistically projectible sample of end users

who received the campaign message. Survey them via phone,

email or mail.

You’ll find a sizable number of accounts who did buy from you

but whose purchase fell through the cracks of your closed-loop

tracking system.

Inexpensive, reliable and captures actual sales from

multiple channels.

But you need to be careful not to over-survey your customers.

3. Data matchback

Method: Wait a suitable period (around the average length

of the sales cycle) and then review the revenue levels in the

accounts that received the campaign.

Not suited to situations involving third-party

distribution channels.

May overstate the sales that result from any

particular campaign.





4. Control groups

Method: Isolate a set of customers who won't see the campaign

and compare sales in these accounts versus a set of similar

accounts that were promoted.

Ideal in a single-channel mail-order environment, but difficult

to implement in the broader world of business marketing.

Works well in long-term, multi-tactic campaigns, like

loyalty programs.

5. Exclusive offers

Method: Create an offer that is only promoted in a

particular campaign.

Best suited to single tactic campaigns for products with

short sales cycles.

6. Product registration

Method: Use your product registration systems to ask the

customer to indicate where or when they bought, and some

ask what influenced their purchase decision.





7. Activity-based Measurements

Method: Measure just lead-generation activities that are

controlled by marketing.

Metrics include: cost per thousand, response rate, cost per

inquiry, conversion rate to qualified lead, cost per lead,

campaign turn-around time.

Good for when it’s too difficult to get sales information

connected to marketing campaigns.

Calculate the Cost Per Closed Lead (cost per sale)

Let’s take a closer look at one activity-based measurement. One of

the most helpful metrics you can track is the cost per closed lead,

also known as the marketing cost of sales. This will help you figure out

whether you are spending the right amount on your lead generation.

In the hypothetical example below, the campaign costs $15,000 and

generates 150 inquiries. So the cost per inquiry is $100. Separately,

we calculated the average cost to qualify an inquiry for the year by

dividing the company’s total cost of inquiry qualification (backend

handling) by the total number of inquiries put through the

qualification process.





Next we divide the total cost per inquiry qualified ($150) by the

qualification rate (25%) to calculate the cost of a qualified lead. Then

we divide that by the conversion rate (30%) to get the cost of a closed

lead ($2,000).

If you don’t know your qualification or conversion rates, check with

your finance people.


Your

Numbers

A Cost per inquiry [campaign cost] /

[number of

responses]

$100

B Average cost

to qualify

an inquiry

[backend handling

costs] / [number

of inquiries]

$50

C Total cost per

inquiry qualified

A + B $150

D Lead qualification

rate

your number 25%

E Cost of

qualified lead

C / D $600

F Lead conversion

rate

your number $100

G Cost of a

closed lead

E / F $50






Make Sure Your Cost Per

Closed Lead Isn’t Too High

Next we calculate the allowable cost per

closed lead and compare it to our actual

costs. To get at the allowable, it’s not

actually necessary to know how many

inquiries will be generated, qualified and

converted. Instead, you just need to know

the net margin per order and the direct

sales expense per order, which you can

get from your finance people.

Simply subtract the cost of sales

(hypothetically set here as $3,500) from

the net margin per order ($6000). Then

compare the cost per closed lead to the

allowable cost per lead.




ma


In this example, the campaign looks promising, since the cost per

closed lead is $500 less than the allowable cost per lead.


Your

Numbers

A Average order size

[average revenue] / [number of orders]

$10,000

B Net margin per order

A * [your margin rate]

$6,000

C Allowable cost per closed lead

B – [your direct sales expense]

$2,500

D Cost of a closed lead

From Step 4 (on previous page)

$2000

E

Is the cost per closed lead within the allowable limit?

Is D < C? YES






Calculate Your Break-even Campaign Response Rate

Finding the campaign break-even response rate begins with the same

calculation we just performed to identify the allowable cost per closed

lead. It then works back from the allowable cost per closed lead, to the

allowable cost per qualified lead, to the allowable cost per inquiry and

ultimately to the response rate required to break even.

In this example the break-even response rate is 0.8%. So you

would ask yourself whether you can be fairly sure you’ll get at least

8 responses per thousand.

If that doesn’t feel realistic,

then you need to lower

your CPM, strengthen

your offers and lists, or

improve your qualification

or conversion rates.






Your

Numbers

A Average order

size

[average

revenue] /

[number of

orders]

$10,000

B Net margin

per order

A * [your

margin rate] $6,000

C Allowable cost

per closed lead

B – [your direct

sales expense] $2,500

D Lead conversion

rate your number 30%

E Allowable cost

per qualified lead C * D $750

F Inquiry

qualification rate your number 25%

G Allowable cost

per inquiry E * F $187.50

H Campaign cost

per piece your number

$1.50

($1500 CPM)

I

Break-even

campaign

response rate

H / G 0.8%





APPEN D IX

Reading List

The Marketing Manager’s Handbook, by Eric Gagnon

(Internet Media)

Business-to-Business Direct Marketing, by Robert W. Bly (NTC)

DMA Lead Generation Handbook, by Ruth P. Stevens (The DMA)

Lead Generation fro the Complex Sale, by Brian J. Carroll

(McGraw-Hill)

Trade Show and Event Marketing, by Ruth P. Stevens (Thomson)

Business-to-Business Marketing Research, by Martin Block and

Tamara Block (Racom)

The White Paper Marketing Handbook, by Robert W. Bly (Racom)

B2bmarketingbiz.com: weekly case studies




AUTHOR:

Ruth P. Stevens is author of Trade Show and Event Marketing: Plan, Promote and Profit, published in 2004 and The DMA Lead Generation

Handbook, with a second edition published in 2005. Ruth consults on customer acquisition and retention, for both consumer and business-to-business clients. She has held senior marketing positions at Time Warner, Ziff-Davis, and IBM, as well as two Internet startup companies. Ruth teaches graduate students at Columbia Business School, and is past chair of the Business-to-Business Council of the DMA. Crain’s BtoB magazine named Ruth

one of the 100 Most Influential People in Business Marketing in 2002. Ruth serves as a director of Edmund Optics, Inc. and is president of the Direct Marketing Club of New York. She has studied marketing management at Harvard Business School and holds an MBA from Columbia University.




lead generation how-to guidegeorgettepann.com/pdf/memberinnercircle/downloads/... · 2012. 10....

Documents