Close the Gaps to Close More Sales with Marketing Automation

What we are currently doing in marketing and sales is not giving us the success we deserve. I believe this is because our underlying assumptions are faulty about who a buyer is, how to sell to them, why/when/how they will close, and how marketing automation can be used to support our sales efforts.

In fact, the buying process itself is far more complex than we are managing. As a result, we are entering the buying path haphazardly, without focusing on the areas we could actually be managing. This results in losing a lot of sales we could be closing. So, let’s look at the numbers.

Closing Less Than 1 Percent of Warm Leads

As part of my prep work when developing sales training for a few new clients recently, I tracked the success of their marketing automation initiatives. I received approximately the same numbers regardless of industry:

  • Out of 100 names determined to be prospects, 3 will agree to an appointment.
  • One quarter will cancel, leaving 2.25.
  • Of these, 75 percent will express interest and possibly get as far as pricing.
  • Of these that express interest, 38 percent will close, or .59 percent.

Based on these numbers, you have to wonder if there is something missing in the process we are using? I’m told that marketing automation is better at closing than using conventional sales models. I can’t help but question that assumption, given that we’re closing less than 1 percent from the 100 deemed “hot prospects.” There’s no telling how many of the originating number of collected leads – around 3,000 – might have been good prospects.

Why is it OK to waste over 99 percent of a seller’s time, making 10-15 calls to each lead, over months and months, to get an appointment that has less than a 1 percent chance to close? Or is this the new norm? With the existing strategy, we’re left to question how can we identify…

  • The number of real prospects within the thousands who came to our sites and weren’t called for an appointment?
  • Those that got as far as pricing might have closed if sold to differently?
  • Whether they would have purchased from the original 100 if they were not first approached to take an appointment?
  • Who would buy if they weren’t first called for an appointment?

We Must Eliminate the Gaps Behind the Scenes

Supporters of marketing automation, to date, have maintained the thinking that has driven sales: bring people to a site, follow their online activity, assume they are leads because they exhibit a certain amount of interest, nurture them to make sure they receive the right data, and then try to close.

The problem starts with the sales model itself: as a solution placement activity, it merely addresses the final 10 percent of the buying decision path, and has little input as to how buyers manage change and buy-in. Quite simply, buyers will take no action until the user touches a solution, buys-in to making a change and is willing to learn/add/pay for something new.

Using current practices, there are five fundamental questions that remain unanswered…

  • Who is a real buyer from all of the names gathered?
  • What is the interest level and and role of the person who filled out the contact sheet? Does he/she have decision-making power?
  • What stage of the buying journey are they on and what data is relevant to that stage?
  • How is the received material being used and who is it being shared with (i.e. competing vendors? In-house teams)?
  • Is the entire buying decision team already on board? Are all who touch the solution in agreement to bring in a new solution?

Whether using just the sales model or marketing automation with some sales activity, leads will not become buyers until all of the above takes place – regardless of the amount and type of data being sent. If the entire series of unique behind-the-scenes issues are not managed, the buyer cannot buy.

How Can Marketing Automation Bring in More Business?

Far too often, sales addresses a need as if it were an isolated event, but the caveat is that buyers don’t buy in isolation from their people, policies, rules, politics, or market forces. Marketing automation is uniquely positioned to actually help buyers manage the entire route down their buying decision path. This is a path that often starts with one person and an idea, but also has to manage people and their diverse relationships.

Marketing automation is uniquely able to initiate the buying process earlier on, making it quite possible to:

  • Lead visitors through their entire buy-path, starting with an idea;
  • Know exactly what stage of the buying decision journey – both change-related and solution-related – buyers are on;
  • Know what buyers are at the last stages and ready to buy, separate from those who are too early in their off-line change management issues to make a purchase;
  • Identify the appropriate material to send for that stage in the buy path (even make it possible for the site visitor to choose the data they want and then follow them).

Marketing automation is a very powerful concept that is being underutilized, causing us to miss the opportunity to lead a lot more buyers through their non-solution-related, off-line decision issues. They must manage the buy-in and change issues anyway – with us or without us. And instead of us wasting resources following folks too early in their buy-cycle, we can better target our efforts to navigate the entire decision journey, know who’s ready, and nurture those at an earlier stage.

Let’s add some thinking around navigating and facilitating the entire buying decision path, from idea through to purchasing decision. Then we can close more, and serve more people.

 

14 Comments

Thanks for the article, Sharon. Marketing automation does require much more strategy than a mere tactical focus on lead conversion. I agree that buying stages need to be part of the strategy as much as sales uses pipeline stages in the sales process. My article on our blog, http://blog.ascendworks.com/marketing-automation-sales-stages-and-lead-qualification/ elaborates further.

Thanks.

Comment by Don Dalrymple
07/22/2011
 

Hi Sharon;
This is a great and very insightful article. And while I echo many of your sentiments about what can and should be done using marketing automation, I would caution that many of the issues you raise about closing deals and poor performance are not limited to the field of marketing automation only. In other words, the question to ask is what’s the performance of those companies who are not using marketing automation?

I suspect it’s equally dismal.

And again, while I agree with your ideas about how to fix this poor performance in the main, I believe the focus is not precisely where it should be: one needs a comprehensive marketing strategy before one expends any serious marketing effort. Perhaps that’s what you are implying in the above advice, but in my mind, the process of creating this strategy is a process. It is not an end objective. And if you are trying to run it as a process, it requires a different mindset. Continuous Process Improvements tells us to “Think, Plan, Do, Measure and Repeat” the process. In other words, one must do some of what you did (the measure part), some of what you did in the thinking and planning parts, and of course the doing, but then one must repeat the cycle and do all of this again.

Complex entities making complex decisions are never easy to follow and decipher, but they can be discerned if you follow these steps. Marketing Automation systems do after all provide priceless insight into your prospect’s online behavior and needs, if one knows where to look for it and how to interpret it.

Given the importance of these ideas to readers and to our industry as a whole, I wrote a follow-on blog to this on our site: See my follow-up post here:http://www.inbound-marketing-automation.ca/blog/2011/07/22/inbound-marketing-automation-strategies/. Thanks for sparking the discussion!

Comment by Eric Goldman
07/22/2011
 

Great insights, thanks, Sharon. In my experience (10+ MA implementations) I have also notice that readiness is key.

Yes, you can visit my blogsite to search & read more on this, but here is the gist:

technology is a tool for automating a process
technology is not useful fro automating a vacuum (lack of process)
linear (pipeline) thinking is fast becoming replaced with cloud thinking i.e. people are fickle, their online activity is often not a manifestation of their place in the buying journey, and a reductionist formula of leads / calls / demos is only one measurement of the value of a fanbase.

Admittedly, my points above are a bit reductionist, so let’s continue!

Best,

Ed

Comment by Ed Alexander
07/23/2011
 

Hi Sharon,

I have seen too many companies switch on there marketing automation system and look surprised when nothing automatically happened: Content wasn’t written, target audiences were not identified, award winning creative was not produced and the phone didn’t start wringing off the hook. All that money and it doesn’t work!

Prior to joining the Institute of Direct and Digital Marketing (IDM) I spent some time with an agency that specialised in lead generation for global technology companies, it was primarily driven by telesales. Even though an email may have gone out at the beginning of a campaign, the guys on the phone still called the whole database. The targets they worked to were:

100 Calls
10 Decision Making Conversations
1 Meeting
And most clients had a close ration of around 1:5

In this case you are looking at a close rate of 0.2%, so the 1% for marketing automation starts looking more attractive.

It is the marketers job to positively impact the sales funnel from demand generation to nurturing and closing, so companies must ensure their marketing departments have all the skills required to make an impact.

The idea behind marketing automation is to allow your marketers to think, strategize, design, develop content, launch, analyse, tweak and report, by automating the tactical elements. It gives you instantaneous insights they can act on and use to drive more opportunities.

Organisations must invest in the capabilities of their marketers, as the technology will not do the thinking for them and can quite quickly become an over priced email marketing tool.

Regards,

Ed
http://twitter.com/edweatherall

Comment by Edward Weatherall
07/25/2011
 

Well said Sharon. B2B marketers are clearly under-utilizing Marketing Automation tools … and to the sales team’s detriment. What’s worse, is that due to the low adoption rates and high failure rates, CEO’s and VP of Sales are developing a very negative opinion of MA technology. This is mostly due to the way in which MA tools are being applied to the lead management process. I see too many marketers using them as “SPAM cannons” (Trish Bertuzzi’s term) instead of using them to do what you indicate is marketing automation’s unique ability to initiate the buying process earlier on.

I recently participated on a Focus panel round table, where we focused on this topic. Here is the audio of that panel: http://www.focus.com/events/focus-marketing-roundtable-definition-marketing-automation-i/

I also posted a blog on what I feel are the 5 keys to MA success: http://www.rockannandgroup.com/2011/06/5-keys-to-marketing-automation-implementation-success/

Here is the quick recap if you don’t want to read or listen to the above links:
1. B2B marketers must figure out exactly HOW marketing automation will optimize and augment the current marketing plan.
2. Marketing leadership must focus on developing a strong and supportive relationship with sales leadership and the top “A” reps. Remember that marketing automation is all about “sales enablement”, so make sure from the beginning that the top reps and sales team understands EXACTLY how automation will make them more money.
3. Develop and execute a campaign in the 1st 90 days that delivers a significant WIN for the sales team. Sales and executives suffer from ADHD when it comes to results.
4. Good users of Sales Force Automation realize the benefits of MA earlier and to a greater extent than bad SFA users.
5. Marketing’s #1 goal is to serve sales – they are your #1 customer so make sure you meet often to gain agreement on lead definitions, prospect qualification rules, attributes of ideal client and business/market targets.

Thanks again for a very timely post.

Regards,
Henry
@hebruce

Comment by Henry Bruce
07/25/2011
 

Well said, Henry.
I’d just like to add one more thing: because MA currently addresses the solution placement end of the buying decision path, we will never get the full range of benefit from it.
I have developed a new contact sheet that enters the buying path in the early, middle, and late stages of the behind-the-scenes decision — still earlier than current MA models, and it will offer the specific data necessary for each step. Any thoughts from your end about how to move beyond solution placement? I believe we can go well beyond what you smartly advocate in your list.

Comment by Sharon Drew Morgen
07/25/2011
 

Notes to all:
1. my first name is 2 words – sharon drew; if we are ever sitting over a beer, i’ll explain how i designed my names – even my last name!
2. what needs to happen for all of you to think even earlier than you are thinking… how about when a person has an idea and goes on line to have a look-see — well before he even discusses this with a colleague. How about when these two folks decide there might be something here, and set out to gather some data to bring aboard a few more people… MA doesn’t manage these unique stages that are pre solution consideration.
3. if you could enter and influence every stage of the off-line buying decision path, and use MA to do that, what would MA look like?
4. what if we could use MA to find the right person at the right stage, get him/her the right data, and get the right names to work with rather than doing drip and appointment-setting for folks who SEEM like they MIGHT buy. We are so assured that we’re doing the ‘right’ thing, but the numbers are obvious. We are closing less than 1%. Obviously there is something very wrong here.

Comment by Sharon Drew Morgen
07/25/2011
 

Sharon Drew,

Well said. I myself modify every “marketing funnel” graphic I see to incorporate stages specific to the buyer before they become known to you — the “suspect” stages so to speak. You have to assume that by the time the person decides to raise their hand (when they make a real decision, not just ID’ed through 3rd party cookies. data appends, IP lookup, etc) that they already possess 50% or more of the knowledge they need to make a purchasing decision. Thus it becomes paramount to deliver on their needs from the moment they raise that hand, and be responsive to the information they provide back. Persona based segmentation with content addressing each stage helps, and if you can segment further by vertical or some other fashion, all the better.

Best-in-class organizations recognize this and can deliver value on-demand to prospects, but it’s far from easy to set up — you need dedicated content, web, marketing automation, and design resources (or just people good at everything) to create these programs. You also need sales to be bought in and delivering on their end of the bargain/

My fear is that MA will continue to be seen as an “automation” tool primarily — a way for marketing to do more with less, rather than deliver more value. The smart marketers are investing in the tool and the people, and are seeing amazing results.

Baxter Denney
Marketologist

Comment by T. Baxter
07/30/2011
 

This is the best discussion of MA I have seen in a while. Great job Sharon..Drew and cudos to Henry Bruce. My assessment is that marketing automation is a marketing driven exercise designed to tee leads up for sales by scoring and identifying key buying indicators. However, the real problem is that marketing and sales differ in the definition of a lead. MA is great at identifying interested parties that, based on the industry, express various degrees of interest. However, the real buying cycle is way outside an average sales persons ability to follow up beyond a few calls and conversations.

Where the real marketing automation is needed is at the sales level. The current MA technology only provides marketing with the ability to create and execute campaigns. The fact is, most sales people only have the physical and mental time to focus on existing customers and customers they can close in or around 90 days. The reason is that is how they are remunerated. So all of the leads that are in a pre sales stage, which i happen to think provides the best time for a sales person to start to a dialogue are tossed out with the dish water because they have no mechanism to nurture them.

What would happen if a sales person could, after speaking with, or even not having reached a qualified prospect (passed from their MA system) be able to create an instant Express Campaign that is formated by marketing, but personalized and executed by sales to reflect what he learned about the prospect.

MA is designed to uncover great opportunities at the earliest stages. The real real problem is many of those leads are at the early stage of a sales cycle.

That is MMI Solutions reason to exist. Our marketing automation solution provides all the basic functionality of every system, but then provides the localized automation that a sales person needs to develop a larger radar screen of longer term opportunities.

There is no way that marketing can create all the iterations of follow up campaigns. That is where sales needs to get involved. And our experience is that when they do create their own nurturing campaigns, they are way more apt to follow up and take responsibility for them.

so in summary-
The low conversion rates from lead to sale is not an issue with marketing automation, it is an issue with how early stage many of those prospects are uncovered and the inability for sales to manage those leads to completion. Give a sales person the ability to start a 6 month campaign based on a conversation with a prospect who said they are just looking but will start seriously make a decision in 6 months, and I will show you a sales person who will monitior their interaction over the coming months.

Comment by steven amiel
07/31/2011
 

Thanks for replying and your thoughtful responses, folks.

Note: so long as marketing automation does not begin earlier in the buying decision path, it doesn’t matter how much ‘targeted’ info you are sending ‘them.’ 1. you don’t know who, exactly, you are sending material to; 2. you don’t know who else is on the Buying Decision Team and the role they each play; 3. you don’t know what the person is doing with the information you’re sending them.

Hence, when you send content, you are throwing spaghetti against the wall. When someone closes, it may or may not have a direct relationship with what you have sent them… you are flying blind.

I have coded the steps along the buying decision path and can enter earlier… for those who want to discuss adding new capability to the marketing automation capability, i’m delighted to find new vehicles and ways to do so.

Comment by Sharon Drew Morgen
08/01/2011
 

Wow! Fantastic conversation. Such honesty and respect in a very challenging discussion. I love the honest truths being bantered about and fully agree that the sale process starts long before marketing automation can get involved. I’ve had the discussion that an ideal sales and marketing implementation actually requires both an Inbound Marketing solution and a Marketing Automation solution; the effect is to engage from the start of a potential sale, all the way through to completion. So many evangelists pick one approach or the other but, if money is not a limitation, I suggest considering both approaches.

What I do love about the discussion is the fact that we’re talking about getting alignment and agreement between sales and marketing so that we can have success with whatever tools we use. I blogged about this almost a year ago – http://myagen.se/pU9f3V

Thanks for starting this provocative discussion Sharon, and for sharing your findings.

Comment by Darryl Praill
08/04/2011
 

Hi Sharon,

Great post. Closing less than 1% of warm leads speaks volumes about the need for improvement. As you mention:
“Quite simply, buyers will take no action until the user touches a solution, buys-in to making a change and is willing to learn/add/pay for something new.”

In essence, you are referring to customer interactions with various touchpoints in the sales process, and changes in customer state, for example from lead to prospect to opportunity and so on.

You fault current marketing automation practice for not addressing the following questions:
1 – Proper segmentation
2 – Proper profitability analysis
3 – Identify the customer’s state and transition to a new state
4 – Coherent communication plan
5 – Organizational alignment.

For questions 1 and 2, if your sales and marketing team cannot proper identify and target profitable customers then the mouth of your funnel is too wide. Marketing automation will only exacerbate your problems.

For question 5, if you do not have organizational alignment then you will have, at best, mediocre success in implementing a marketing automation solution.

Questions 3 and 4 are, too me, the only truly relevant marketing automation questions because it is here that the marketer has the greatest impact on each individual customer’s sales journey.

Regarding question 3, identifying every customer touchpoint and the desired response to each interaction according to the customer’s profile and change in buy-in behaviour, is what I refer to as the customer’s state.

As for question 4, you are referring to the craft of the marketer and the copywriter. The need is to generate relevant content and deliver it in a timely and consistent manner.

Marketing automation is in a unique position to solve the marketer’s challenge: the ability to map and implement a consistent set of customer touchpoint responses and sales channel workflows. Think of it, every digital touchpoint: web, in-store digital display, point-of-sale, event participation, Facebook likes, downloads… Marketing automation can provide access to an endless stream of customer touchpoints and allows you to design custom responses according to the customer’s state.

Understanding of the customer’s state is critical to building a good relationship. Whenever there is a customer event such as a purchase, a birthday, a download… knowing the state of the contact will dictate how you may wish to respond to that event. Question like: is he a new subscriber? Is this her first purchase? Does he work in a company that has already downloaded this month? Did we already send her this content?

Ideally your response to a customer event should be dictated by knowledge of their state. The challenge is tracking individual customer states, as you put it, “manage people and their diverse relationships”. I refer to this as the marketing ecosystem: the customer’s profile, the customer’s state, the customer events, and the actions to take in response to specific customer events. Each marketing ecosystem is unique. Factor such as industry, organizational culture, IT environment, market maturity define and constrain marketing ecosystems.

As you point out, marketing automation “is uniquely able uniquely able to initiate the buying process earlier on.” What you need is to know is the customer’s current state (i.e. stage of the buying journey), and build scenarios to move them to or keep them in the desired state. You need to know this information whenever there is a customer event, and you need to respond appropriately according to the customer’s preferred channel.

Marketing automation is under-used because it is difficult to use and is generally misrepresented (see my rant at: http://blog.whatsnexx.com/2011/02/eloqua-marketo-and-aprimo-are-not-marketing-automation.html). What the marketer requires is a silver bullet that allows you to follow individual customer profiles and events, and to take appropriate action on the most channel for that customer event.

Comment by Jacques Spilka
08/22/2011
 

Jacques: thanks for your considered note. I’d like to bring the discussion to another level. 1. we will never, ever, ever know what is someone else’s current/desired state (other than them telling us) and how this plays out in the daily politics or interactions they live within. 2. sellers believe they need to understand – and they do, but only in the area of the solution.

My Buying Facilitation(r) model codes and sequences the SYSTEM behind how decisions get made, and i’ve developed a new form of question that actually teaches the brain how to collect the most appropriate unconscious criteria and move through the decision sequences. So in my day job, I teach sellers skills to help buyers navigate through the change issues… something that neither sales nor marketing automation manage.

Next, I’m actually in the middle of developing marketing automation software that actually leads the buyer through each stage of their decision making, helps them collect all on the Buying Decision Team, and pings the seller at each stage and gives the seller different things to help buyers accomplish at each stage of the off-line portion of the buying decision path.

Comment by Sharon Drew Morgen
08/22/2011
 

Spoken like a true marketer. Testing and seeing if there is some way to make the process and end result better. Doesn’t it all come down to “Who is your audience?”?

Comment by Riley Welsh
08/02/2012
 

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