Time for Marketers to Get Smart About Pipeline (Again!)

Peter Burris of Forrester Research just posted an interesting bit of research about how marketers need to do a better job of connecting how marketing activity translates into pipeline. If you have Forrester access you can read the document here.

Here are a couple of the main points from their study:

  • Marketing is the source of 27% of the pipeline on average
  • Size of company doesn’t appear to have a big impact on the average
  • Services companies are closer to 20% of the pipeline
  • 75% do some “qualification” of leads, but most are not yet systematically “nurturing”

What’s new here is the updated data from Forrester’s own research of around 140 tech marketing folks across both services and software companies of all sizes. But is it really shocking that only 27% of leads are marketing sourced? In some ways, I am more surprised that it’s that high.

This leads to a number of follow on questions for me. What is the “right” number after all?  Or, what is the expectation of the business on what marketing should deliver? Or what does the sales side think of that 27% number, and the quality of those leads?

I have considered the following variables when measuring pipeline contribution:

  • Overall Pipeline Contribution: I have personally used 25% minimum as a rough guide, 40% as a goal.
  • Return on demand gen spending: 10x is the trendy figure for software companies based on contribution margin. So for every $1 spent on demand gen programs (taking out awareness activities) I want to generate $10 in revenue.
  • Pipeline Velocity: The speed at which marketing leads moving through the pipeline, and how long a marketing lead needs to be nurtured before it becomes viable.
  • Stage Management: While revenue is the ultimate measure, how far marketing leads make it through the pipeline is an important gauge of lead quality.
  • Efficient use of Capital: If cold calling efforts generate opportunities at a cost of $300 per opportunity, my marketing activities need to either improve that $300, or be less expensive to ensure the best use of capital.

To me, percent of pipeline is interesting and certainly screams value, but it is only one of the critical success factors. For instance one of my teams was able to contribute 60% of the opportunities in pipeline at a services company. But in reality those were smaller deals that took a long time to close and created a distraction for the sales team, reducing their ability to source new, high value deals from their networks. Understanding the full picture allowed us to recalibrate our strategy.

In addition the scale of the opportunity matters. If your $500,000 marketing program generates the required 10x return of $5M in revenue for a $1B company, don’t expect the senior execs to shower you with affection. At the company party they will just sort of nod their head and be happy you aren’t wasting their money. Then they will go chase down the hot new sales person who has a $20M quota and be sure that salesperson has everything they need to be successful.

The point is, the percentages matter, of course.  But what really matters is being able to show an effective contribution to the businesses overall goals. Understanding capital efficiencies, and a deep understanding of how to connect activity to what matters to the business are the metrics that matter most in your organization.

Possibly Related Articles:

MarketingProfs: How to Present Analytics



Its 2011… Do you know where your marketing is?

Wow, it’s already 2011. Felt like just yesterday I was penning my thoughts on 2010 marketing strategy. Remarkably, that was by far my most popular post of the year that didn’t involve Augmented Reality, the Gartner Magic Quadrant, or One Hour Translations. Not sure why it resonated so much, but perhaps it was the simplicity of the message: Focus on the things that matter most and drive results.

So a good marketing strategist would state the obvious: “it worked in 2010, let’s go for it again in 2011” and trot out another fantastic piece about how focus is even more critical now, and come up with an updated list of three action steps to keep the good times rolling (stay focused, remove distractions and showcase results perhaps?).

But no, instead let’s turn convention on its head a bit.  Just because it was a success, doesn’t mean we should do it again this year. And conversely, just because it failed doesn’t mean we should throw it in the drawer.

By all accounts, our team met and exceeded many of its commitments this past year.  We generated new wins, closable business opportunities, grew overall pipeline and began to drive thought leadership in key areas.  It was a solid double, possibly even a triple if you are the home town scorer.

But some things still didn’t work.  Some of our campaigns fell off the table. Some of our events were originally planned as “demand generation activities” but became “thought leadership activities” in practice. We dabbled in social media, but only really dabbled. The list could go on for pages.

So what does that tell us about what do in 2011? Not much really.

At the end of the day it’s of course about long range planning and moving a market position, that doesn’t change.  But it’s also about meeting the objectives of the business in that specific year. And those objectives have changed since last year. In one unit we had a major effort to build pipeline right off the bat in Q1 of 2010 so we undertook a number of shorter term activities to meet that goal.  But the business is in a different place now, which will necessarily mean our activities should change as well.

So of course, take a lesson from what didn’t work, and try to do more of what did work. But it is far more important to make sure that the activities you are focused on are well aligned with the objectives of your business.

That is my focus for 2011, what is yours?


Possibly related  reading:

HBR: For more on looking back to look ahead

Chris Brogan on Cleaning up your marketing for 2011

Ted Weismann of Lois Paul & Partners on B2B Marketing & Location Based Services in 2011




Every Dollar Counts, Twice

With vacation and business travel it has been difficult to post to the blog regularly, however a 15 hour flight to Mumbai gives you ample time to reflect (and sleep, and watch a movie or two…!)

This week I will be presenting at MarketingSherpa’s B2B forum a case study on how to do more with less. I will post the slides through SlideShare after the event but a quick preview.

In today’s economy, it’s ever more important to think about the opportunity cost of all of our investments in marketing. A quick reminder in case it has been awhile since you took an economics class: for every dollar you spend, or good you make, there is something else you can’t buy or a good you cannot make as a result. This good or service that is foregone represents the opportunity cost of your investment.  In marketing that simply means that ever dollar counts twice: once for the activity we are going to run, and the second time for the activity we can’t do as a result.

When budgets are flush this math is less important. But in times like these, it’s extraordinarily critical. And it often leads to planning paralysis because we have so many great ideas on what to do, we get overwhelmed by what we can’t do.  In that moment of indecision crucial time is lost.

One way my team helps break through this is by looking for ways we can “force multiply” our spending. This means we try to run programs that have multiple threads attached to them. For example rather than doing your own podcast, partner with a publication to run the podcast and secure a lead guarantee and name generation campaign to help feed the top end of the funnel.

When you start stringing some of these multi-threaded concepts tighter into a campaign you can stretch your dollars dramatically even without a huge staff to execute on multiple fronts.  Look for more details and results of how we did this at Ness soon.

I am also interested in how YOU have done managed your opportunity costs as well.  Send me your ideas  by commenting here or to my Twitter account @ajdun and I will happily share your ideas with my MarketingSherpa audience.

Bing’s July Numbers

Just a quick update to my previous post on Bing’s launch. ComScore announced their July search market statistics and Bing picked up another 0.5 percentage points  at Google and Yahoo’s expense.

Again I repeat the question: are they popping Champagne in Redmond over this?  So Bing has allowed them to capture an additional percent or two of marketshare, and perhaps a touch more relevance.  Maybe that is enough.

As an aside however, I finally noticed the “keyholes” in the images that give you some details about what the image is about.  Definitely cool. Not terribly relevant to my life, but was a neat feature. I also like the fact you can scroll back through the archives of the images. Read more about how this all comes together here.

Got Bing?

I was humored by the clever ads that Microsoft has been running about Bing on the radio in the Boston market the other day. They essentially involve one person asking another a fairly simple question. The second person then responds with a series of completely un-related answers.

But as I was listening to it, I kept thinking that just maybe this was a classic case of solving a problem I didn’t know I had. Even after they told me I had the problem, I am not sure that I really care. And when the paradigm is set as firmly as it is with Google, I am really not sure any amount of marketing is going to have a measureable impact.

This B2B Magazine article has some early stats from the launch showing a tiny gain in search from 7.81% t o8.23%. I am left wondering if the execs in Redmond are dancing a jig that they picked up 40 basis points?  Even considering they stole those from Google’s over 78% it still seems they are running a distant third.  I wonder what their goals for this were? Break 10%? Surpass Yahoo?

I did try Bing when I was looking for something particularly difficult the other day, didn’t seem to help me anymore than Google.  But hey, they can always work with this post from someone I follow on Twitter:

@bpearce76: Is anyone else drawn to Bing just because of the pretty pictures? Love to see what pops up each day.

I think they are in trouble.