The shift to virtual events in 2020, along with uncertainty about when live events will resume, makes this year’s budget planning a bit tougher than others. However, you can use the same methodology to set your team up for success in 2021.
Demand generation entails generating sales opportunities for your company's products or services. A good demand generation engine can help a company engage new prospects, generate interest online and offline, and attract prospects, which are then converted to leads and turned into sales pipeline.
Demand generation, as the name suggests, is generating sales opportunities for your company's products or services. A good demand generation engine can help a company engage new prospects, generate interest online and offline, and attract potential customers, which are then converted to leads and turned into sales pipeline.
However, most importantly, demand generation engines are meant to be scalable and predictable revenue generation systems, where the ROI can be clearly estimated and measured.
Unlike lead generation, which focuses on only identifying prospective customers for a company, demand generation is the overarching system and processes that act as the bridge between marketing and sales teams. A demand-generation system gives a company a healthy pipeline, identifies new and existing opportunities, and most importantly, makes it possible to track ROI and identify bottlenecks at every step of the sales funnel.
By making every step, from lead to revenue, accountable, a demand generation system allows organizations continual optimization of every stage, which ultimately leads to better customer-lifetime values, and better growth.
The most crucial step in implementing a demand generation engine is to track your lead-to-revenue funnel. In B2B sales, there are many steps that need to happen for a prospect to convert into an opportunity and a closed-won deal. When you only have a few new leads per week, it’s easy to manually route contacts and assign them in Salesforce, without worrying to much about statuses, queues and automation rules. However, once you start to scale, a poorly mapped funnel is the main reason why your marketing dollar are not generating the ROI that you expect. I saw with my eyes companies that were generating over 4,000 new leads per month, but the majority of them were being routed to a marketing queue and never followed-up or nurtured.
A typical SaaS Lead-to-Revenue funnel looks like this:
The blue side of the funnel is typically owned by the Marketing department, while the orange side is owned by the SDR and AE teams. The funnel begins with the MCL (Marketing Captured Lead). These are all the contacts in your database, including cold prospects uploaded from third party systems. The following step is MEL (Marketing Engaged Lead), which means every contact that has performed an action with your assets or content. This include downloading a whitepaper, registering for a webinar, signing up for the blog or newsletter, visiting your booth at an event etc.
As you well know, not every prospect that engage with your company is qualified to buy. This is where your lead scoring model comes into place. You want to be able to score every lead and identify those that are more likely to become customers. The prospects that meet these criteria become MQL (Marketing Qualified Lead) and they are assigned to the sales team. The reps can accept the assigned leads and follow-up (SAL - Sales Accepted Lead) or reject and disqualify them. Once a prospect engages with the sales team and begins the sales cycle, he/she becomes a SQL (Sales Qualified Lead) and an Opportunity is created in Salesforce by the SDR. Once the Opportunity advances past the initial stage, it’s considered a SQO (Sales Qualified Opportunity) and it becomes pipeline and, eventually, revenue.
Since B2B sales can span over many months, it’s very important to have an effective lead nurturing system in place, where you can re-engage with your prospects at every stage of the funnel. If you have mapped them correctly, you should be able to quickly identify where they sit in the funnel and serve them the most relevant content.
A typical demand generation engine will focus on:
In order to optimize those three key metrics, it is important that sales and marketing teams work together from the initial stages. For instance, for optimizing opportunity creation and pipeline, the sales team should sit down with the marketing department to identify the Ideal Customer Profile (ICP) and create a list of target accounts. Once the list is defined, it’s possible to create customized tactics for each tier of prospects and to track how these accounts are engaging with your company’s assets over time.
The campaign strategy should also be shared between the two departments, and ensure that there is a clear “handoff process” once the prospects is engaged and he/she is ready to be assigned to sales. Having a SLA in place for the follow-up will help reducing the possibility of unassigned leads (very frequent issue in large organizations).
In order to optimize a company's sales process, it helps if sales representatives are only given leads that are most likely to convert. Thus, they don't have to waste their time on suspects. Here, sales development representatives (SDRs) can play a crucial role. SDRs act as the bridge between marketing and sales processes. They take marketing qualified leads (MQLs) through a lead-nurturing process, until they are ready for a sales qualified appointment (SQA).
A typical lead-nurturing process would include:
The modern marketing landscape allows SDRs to expand their touchpoints, though. These could include:
In order for sales and marketing teams to work together, it is important that they are working on the same goals and use the same definitions. Marketing cannot decide unilaterally what verticals and accounts should be targeted, that would be a recipe for disaster.
Another common issue is the definition of “Opportunity” and when it’s appropriate for the sales rep to create one in Salesforce. The marketing and the SDR team usually push for the opportunity to be created as early in the cycle as possible, so that they can use it as leading indicator of success. The Account Executives normally prefer to wait until they are sure that the opportunity will move along and it has at least 50% chance of closing, since they don’t want to be questioned about it at every sales forecast. My recommendation is to create an Opportunity in Salesforce as soon as a qualified meeting is booked with the prospect. However, the Opportunity should be categorized as Stage 0 (To Be Qualified) with no amount and should be kept outside pipeline and forecasts. By creating the Opportunity early in the process, you are able to track every stage of the funnel and identify potential issues (when for example your conversion from meetings to opportunities is really low or it’s low just for one rep). It also makes it possible to better track campaign attribution since every Lead will have to be associated to an Account. Finally, it will create a better history report for each account where you had some interactions.
As said before, the SLA between marketing and sales is another aspect that shouldn’t be ignored. Too often companies spend significant budget in generating leads that are ignored because the handoff process is weak and nobody is accountable for following up. Make sure that you automate this part of the funnel: if a rep doesn’t follow-up with a lead within 24 or 48 hours, re-route the lead to a different rep. After a pre-defined amount of time, if a prospect doesn’t engage, you need to move it to your Nurturing cycle to try to re-engage it.
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