New marketing demystified for Indian SMEs

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Pitfalls in current sales lead logging methods

.. and a solution

There are essentially 2 ways most CRM systems currently recognize a “Lead”.

New contacts as leads: Many systems simply log any new contact name with address as a lead. The contact name may have been sourced from any place: web-form, trade-show attendant, purchased list, telephone directory; no matter. They are all “lead”s and are fed to the top of the funnel for further action by sales or marketing.
The benefit of this apprach is it has the widest reach; because it casts the net really wide. For a new company, this closely matches the business process as well. Very few existing customers/ contacts; so, any which way to expand the circle is useful.
The problem of this approach is that it can overwhelm your lead-processing system by putting the onus of swiftly “qualifying” all these contacts onto the sales or marketing. And since the quality of the input (the list of contacts) is never good, leading to a frustration with the qualification process.

Contacts with tasks as leads: An improvement on the above system is logging contacts with specific actionable requests as leads. In this way,  a contact who has asked for a quote or a demo or a salesman’s visit or even attended a seminar or clicked on a link in a e-mailer is tagged as a lead.
The benefit of this approach is that this makes available for qualification a smaller list of contacts to start with. Also, the contacts have qualified themselves somewhat by professing a level of interest. This is as useful for a new company as an established one, with existing list of clients.
The problem with this approach is that it still leaves the bulk of qualification tasks open. And, there is still no systematic way to prioritize which leads need attention ahead of others.

Over-riding issue with “metrics”: Marketing gets measured by leads that they manage to “create” while sales is measured by revenue. For a detailed discussion read my previous posts, here and here. So, even under the second scenario above, marketing has an incentive to “stuff” the funnel with contacts as leads who have shown even the slightest desire to engage with us. Unless there is a clear understanding of the minimum state of qualification at which the lead gets passed on to sales, such leads will continue to be held in contempt by the sales function.

In B2B scenarios, we need to recognize that decisions are normally collectively undertaken. Also, by attaching a lead to a contact, we are re-stating the obvious: this contact can potentially give us business. Well, that’s why he was in your contact list to start with, isn’t it?
A lead, thus:
1. Is not a contact but is associated with one or  more contacts in the same customer account.
2. Needs to be nurtured and progressed into a deal.
3. Needs to be jointly “owned” and seen as having resulted from sales and marketing efforts in order  to have credibility.
4. Needs association with a product or service that we can sell into that account.
5. Needs to result from activities performed by the contacts in an account – as logged in the system and sales and marketing activities targeting those contacts related to the same class of products and services.
I discussed this in more depth in my post called A better way to recognize “leads” in CRM systems.

What do you think? Is a shift of focus from contacts to their activities warranted? Do share if you spot challenges in either the thought or its practical implementation.


A better way to recognise “leads” in CRM

… why we need to re-define “leads”

In most common CRM systems, a lead is what marketing produces for its labor and a deal is what the sales guys make or chase. The system treats them differently.

If this is your worldview as a B2B marketer, be ready for strife, disagreement and worse across the great sales-marketing divide.

First up, let us agree on a few things:

Sales-guys may be rock-stars but, they could not do much without the company, its products and the reputation that precedes them. And, we like to think of sales as a linear process, with customer moving from a stage of low awareness to high engagement and making the transition from being hand-held by marketing to sales.

Worse, when a “lead” is exclusively “tainted” with the marketing origin, sales do not take it seriously. When faced with a lead-inbox full to the brim on a Monday morning, the impulse of the sales executive is to do one of the following:

1. Trash the lot

2. Scan through the lot and mark most as useless and the rest as “already existing in the system”.

Sales leads are a result of many factors (company brand name, past experience and purchases) and activities undertaken to make the customer aware of our products and services. In B2B scenarios, sales and marketing both have a role to play.

Why not recognize that?

There is a reason. Over a period of time, B2B marketing departments, under pressure to justify their existence, have bought into a metrics system that recognizes only “lead generation” from marketing campaigns as a measure of success.

So, marketing is eager to tag every little sneeze from the customers as a lead and ascribe that to the cold they caught from the aircon running in their own office. This has led to the exact opposite of what was intended. The more numerous marketing leads have become, the less useful they are.

We define a lead as a signal coming from a buyer organization which needs follow up. A lead, upon qualification can become an identified opportunity for a sale.

A lead is NOT an individual. However, a lead arises out of actions taken by one or more contacts working in a buyer organization (account).
In this view,
1. A lead transforms into a deal
2. We recognize that many activities jointly contribute to creating a lead. It is no longer  “we ran a seminar and we got 200 leads”. Now it is more like “we have logged customer activities (attending a seminar, asking for literature, asking for a salesman’s visit or wanting to see a product for evaluation purposes) all showing interest in a certain product/ product category of ours in the past month. Something is happening here; let’s have our sales guy investigate.”

A CRM system’s job is to log activities. A lead should be created automatically as an aggregation of those activities related to a certain product or class of products.

Involve sales managers in scoring the activities that make a lead, and communicate to the sales that each lead is recorded because of multiple validations from  activities. I expect this process will be a winner.

What do you think?

Two approaches to building a CRM system

How to reconcile the sales and marketing views?

There are two main ways of approaching the selection of a CRM software.

As I pointed out in a previous post ( CRM 2.0: Why the Challenge is mostly in adoption ), most folks have traditionally started with the “marketing” side of the sales-marketing continuum. Which is, build a great campaign management piece, with all the bells and whistles: segmentation and targeting, e-mail engine integration, opt-in and opt-out handling, drip-marketing, lead-nurturing and all the shebang.

Okay, so, after all this, if sales still dutifully “auto-forward to trash” all the leads, that’s THEIR problem. After all, we have 27  “fields” in the contact screen, and 18 in the account. All doing their job in ensuring that we really “know the customer”.
Like hell they are and like hell we do!

Who puts in the data? It’s sales. All those contact records with 27 fields and account records with 18 (I am making up these numbers, but you get the point).. all those fields’ data have to be entered by sales guys. And, they also have to keep them updated, in addition to entering sales leads that they get through their efforts and keeping them updated as well.

Life’s not fair if you are a sales guy. There is this blasted variable salary and weekly review with bosses and on top of it, “you want me to fill up all those records”.

And, since the CRM software was written with the primary goal of satisfying marketing, it will be high on reports and analytics but, low on usability and triggers and alerts which can make it useful to the sales people.

In a nutshell, the sales view of a CRM software is: “It is a software where I fill in all the customer data just so that marketing can look good; prepare those cool reports with colourful charts (and coloured data!).” In one word, trouble!

The other major way of approaching this is to take the sales view and build a Funnel Management System or a Sales Force Automation. Most of the contact management piece is common to both approaches.

The focus here is on workflows, sales reports, funnels and performance vs targets and so on. While this sounds great from the sales point of view, even this suffers from problems. For one, the data entry work for the salesmen is not any less. For another, since the focus is  lower in the funnel, the organization has less long term view as a result and marketing’s ability to make sense of the present so that they can build the future prospects list is undermined.

My experience of more than 15 years of designing, customizing and using (and abusing!) various CRM softwares have convinced me that a good CRM software implementation needs to have the following:
1. Have only those “profile fields” that you will seriously, seriously use for “active profiling” of your contacts and accounts.
By “active profiling” I mean, a profile that will drive action on your part.  It is no use to know someone’s birthday, if you do not remember to greet her on her birthday. . Similarly, what good is knowing that someone attended a seminar on Topic ABC, if you did not have any follow up action planned, either by marketing or by sales?
2. Ensure that primary data-entry is automated.
3. Ensure that  profile triggers action and the action and results are visible to sales people.
4. Drastically cut down on profile fields count; most, you will realise were not necessary.
5. Make it possible to distinguish between “activity profiles” (profile built over time based on the interaction history) and “static profiles” (profiling done basis demographics, designations, stated interests and so on).
6. Have good analytics, forecasting and targeting capabilities. It is important that everyone can use the same tools and for that, the tools themselves must be user-friendly.
7. Every CRM software is different- not just in workflows and capabilities, but also in fundamentals of how they view the marketplace; so, when you implement yours, ensure that the sales and marketing teams get training in not only using the software, but also in the core principles of CRM and how you are planning to use this software to enhance productivity across the sales and marketing functions.

The chicken and the egg

What comes first?

In an ideal business world, you can:

1. Have your advertising agency release the ad and pay them from the revenue you realised from the “sales leads”.
2. Get the best marketing research done and have your fortunes foretold; all before starting to sell and get revenue in the door.
3.  Grow your business purely organically and funded only through internal accruals.

If this sounds like a dream; too right. It is.

So, you are a start-up and you want to grow the business, add to your portfolio, improve your product quality, set up a customer service department? Bad news. You have few people; motivation is a problem as is quality. And cash flow is tight.
You want sales to grow, but can’t afford a lot of salesmen. And, you certainly want your salesmen to call on customers who have evinced a desire to buy or talk business. You want qualified sales leads. You want to “pull”. Who will run this for you?
Good marketing talent costs money. And, great marketing talent does not want to work for a small company, especially if it is a startup.  You want to hire freshers and train them up; problem is, you do not have trainers.

Consider outsourcing

A lot of companies have been outsourcing one of a kind or infrequent activities like building customer databases or gruntwork like posting letters and mailing even now. But, what you might want to consider is getting part-time access to outside talent.

Outside talent can help design your campaigns, customer databases, sales management systems: deadline driven intense activities that require expertise that you do not need inhouse. After all, if you do a yearly planning excercise and you need an experienced marketing head on board for about 15 days to a month, why not look for him/ her outside?

Similarly, tactical implementation of marketing plans can largely be left to outsiders. From profiling the target audience to appropriate messaging to the target audience; from deciding the media choice for communication to creating the communication to capturing the leads and passing the leads on to your sales.

All when you need them.

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