Intelligent Demand Generation / eTrigue Corporation

Marketing automation and sales intelligence tools can help accelerate the flow of qualified leads into the pipeline, but the fundamental shift for many companies is improving the long-term visibility of pending deals.

“It’s imperative that sales and marketing teams take a longer term view in conjunction with a ‘what can we close today?’ view,” says Louis Foong of The Alea Group. “Most companies realize that it is taking longer to close deals, yet they haven’t implemented programs that start early to assure a stable flow of mature leads.”

One of the first steps to achieving longer-term visibility is measuring the average conversion rates for prospects through different stages of the sales funnel. That means measuring from initial inquiries to qualified leads and then from opportunities to closed deals.

However, only 64% of companies have defined those pipeline stages to ensure marketing and sales agree on common definitions, according to the Executive Benchmark Assessment (EBA) from Frost & Sullivan and Bulldog Solutions.

While measuring the flow from inquiry to close is an important step, the hard work of improving the conversion rates at each stage is heavily dependent on a company’s lead nurturing programs.

According to the CSO Insights’ report, only 26% of firms had a formal lead nurturing program in place. Lead nurturing programs allow the sales team to close out the quarter by focusing on the truly hot leads that are likely to buy, while marketing continues to warm up those longer-term opportunities that need education.

“In today’s busy world, a prospect may be a perfect fit for your solution,” notes CSO Insights’ report, “but they may not have the time available to take a look at your offerings right now.”

Ultimately, lead nurturing programs help increase the volume of sales-ready leads in the pipeline, but this process requires patience, persistence and precision. The development of a prospect from initial engagement to a closed deal can vary widely depending on price point and the complexity of the solution.

Once a lead nurturing history is established, companies can build metrics for the average lifecycle of leads from initial inquiry to close. This intelligence will provide insights to support the longer-term visibility companies need into their pipeline.

A better understanding of buyer needs and an automated stream of relevant messaging to targeted buyers should accelerate the sales process. And this in turn would reduce the amount of deals stuck in the pipeline and improve the effectiveness of your sales organization.

Case studies have consistently shown that unclogging deals and reducing funnel leaks makes companies less reliant on sales teams having to “save the quarter” with expensive, inefficient eleventh-hour deals.

According to CSO Insights’ new report, “2010 Sales Performance Optimization–Going Forward Analysis,” the following are the top four initiatives needed to increase sales effectiveness:

1. Revising/enhancing lead generation programs.

2. More closely aligning sales and marketing.

3. Enhancing sales team communications.

4. Analyzing customers’ buying processes.

The report noted that lead management plays a critical role in developing likely buyers. “We have documented numerous examples where using Lead Generation Management systems have increased the quality and quantity of leads; yet only 16% of the firms we surveyed have these systems in place. This is something nearly all companies would benefit from and is not just for use by marketing.”

Since sales reps are still responsible for generating “nearly half of the leads they pursue,” the CSO Insights’ report suggested that giving sales reps access to lead management automation systems “can help them more effectively generate their own prospecting campaigns.”

Many B2B companies are supplementing marketing automation systems with sales acceleration tools. These tools enable reps to focus on deals in the pipeline with personalized attention via trackable emails and real-time actions. They not only allow sales reps to track ongoing activity and history, but they also provide real-time alerts and triggers to allow sales reps to focus on the prospects that are active and ready to buy.

Last week, we discussed ways to avoid the “end of quarter scramble,” and pointed out that one of the best ways to insure a healthy pipeline is to segment and narrow your target audience and focus on the audience most relevant to your product.

More advanced companies are now taking segmentation to the next level by developing buyer personas for their key target groups.

David Meerman Scott, author of “The New Rules of Marketing & PR,” described the process of developing personas as breaking buyers into distinct groups, and then collecting intelligence on those groups to make it easier to create content specifically targeted to each group.

“You need to segment buyer personas so you can then develop marketing programs to reach each one,” Scott says. “For each buyer persona profile, we want to know as much as we can about this group of people.” In addition to conducting interviews with recent buyers and target customers, companies are using the intelligence gathered from Web activity tracking tools to build personas and to create content to reach them.

This targeted approach to communicating with buyers is becoming a competitive differentiator, according to Ardath Ablee, author of “eMarketing Strategies for the Complex Sale.” “Companies who truly understand the needs of buyers and develop content to help them learn what they need to know to build the confidence that they’re making the best choice will win. Companies focused on themselves and their products will not. Buyers care about the outcomes the products enable before they ever care about the features, feeds and speeds,” Albee said.

This goes back to one of the most basic lessons in marketing – always focus on your product’s benefits rather than highlighting its features. Buyers simply do not care about your shiny features – they want to know how the product will affect them.

Industry analysts report that personas and buyer profiles are helping to make both large and small companies more efficient. However, less than half (46%) of B2B companies have developed buyer personas to guide communications and sales readiness for their prospects. This means there is still significant room to adopt advanced segmentation to help make sure the deals being pursued at the end of the quarter are based on real business needs and have a greater chance of actually closing.

We’ve all seen it happen: at the end of the quarter, realizing that the quarterly goal has not been met, companies scramble to quickly close a few more deals. This is often done by spending on short-term lead generation, including cold-calling campaigns and trying to quickly close immature leads before the quarter’s end.

Needless to say, this is the most expensive and inefficient method of lead generation and usually drains budgets from subsequent quarters and campaigns. More importantly, these short-term initiatives typically fail because accelerating the buying process can’t be done at the very last minute and without any prior planning.

In order to help B2B organizations end the stress and expense of the “end of quarter scramble,” we have developed the following four steps to help your organization build a more predictable and sustainable pipeline from quarter to quarter.

1. Narrow your target audience

To stabilize your pipeline, you should actually narrow rather than expand your target audience. Through the use of segmentation tools, successful B2B companies are defining and targeting their marketing databases to focus on the sectors that are converting into legitimate sales activity. By narrowing their focus, these companies are able to personalize their messaging and develop content and campaigns more relevant to their target audiences, resulting in shorter sales cycles.

2. Help Sales Step on the Accelerator

A better understanding of buyer needs and an automated stream of relevant messaging to targeted buyers should accelerate the sales process. And this in turn would reduce the amount of deals stuck in the pipeline.

Case studies have consistently shown that unclogging deals and reducing funnel leaks makes companies less reliant on sales teams having to save the quarter with eleventh-hour deals.

Many B2B companies are supplementing marketing automation systems with sales acceleration tools. These tools enable reps to focus on deals in the pipeline with personalized attention via trackable emails and real-time actions. They not only allow sales reps to track ongoing activity and history, they also provide real-time alerts and triggers to allow reps to focus on the prospects that are active and ready to buy.

3. Converting Cold Calling to Warm Calling

Instead of pouring money into “dialing for dollars,” more B2B companies are shifting their teleprospecting investments to qualifying and nurturing prospects that have already shown some interest in their solution.

By focusing on prospects that have had some prior contact, inside sales or call centers typically have much higher success rates in creating opportunities for the sales team because they are spending time on “warm calling” rather than cold calling.

Sales intelligence tools not only allow sales reps to do “pinpoint prospecting,” they also help to identify “trigger events,” which can drive short-term sales opportunities. Real-time lead alerts can increase connect rates by up to 10X. Reps armed with website visit history, campaign and detailed prospect information have more confidence and more information to effectively engage with interested prospects. The result is a much higher success rate then traditional, often futile, cold calling.

4. Start Planning Two Quarters Out

Automation and sales intelligence tools can help accelerate the flow of qualified leads into the pipeline, but the fundamental shift for many companies is improving the long-term visibility of pending deals.

One of the first steps to achieving longer-term visibility is measuring the average conversion rates for prospects through different stages of the sales funnel. That means measuring from initial inquiries to qualified leads and then from opportunities to closed deals.

While measuring the flow from inquiry to close is an important step, the hard work of improving the conversion rates at each stage is heavily dependent on a company’s lead nurturing programs. Lead nurturing programs help increase the volume of sales-ready leads in the pipeline. They allow the sales team to close out the quarter by focusing on the truly hot leads that are likely to buy, while marketing continues to warm up those longer-term opportunities that need education.

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Obviously, it’s impossible to ensure that all sales reps will start reaching quota, but implementing these tools and processes will have a significant impact on shortening sales cycles and improving win rates. With these in place, the quarterly close can be a smoother and more predictable process rather than a late-night panic.