Is Your 2018 Lead-to-Revenue Plan Missing This Critical Ingredient?
Marketing and sales professionals talk about awareness, leads, opportunities and revenue. They do this because their ability to achieve positive and measurable results in these categories defines job performance. However, many companies would benefit from a taking a step back to gain a holistic and top-down view of the entire lead-to-revenue (L2R) process.
The lead-to-revenue framework synchronizes people, processes and technology in a manner that optimizes every part of the end-to-end process to achieve greater amounts of (profitable) revenue, reduced sales cycles and higher close rates. All marketing and sales activities are included, including steps to drive awareness, generate and nurture leads and facilitate every aspect of the sales cycle. A major point is that none of the individual metrics are valued unless you achieve the macro revenue and profit KPIs.
Forrester Research has been on the forefront of lead-to-revenue revolution. As the introduction to Forrester’s Lead-To-Revenue Playbook For 2017 states, “Lead-to-revenue is not demand generation on steroids. It’s an opportunity to create a new customer engagement model that will first disrupt, then transform, your marketing organization as you re-engineer sales and marketing processes and leverage new marketing automation software.”
L2R is strategy-led, not tactics-led. When C-level execs are asked what they most need from marketing and sales, you hear answers like: more leads, better leads, more awareness, more feet on the street, etc. But if you question this answer (e.g., why do you need more leads?) you receive vague answers at best, a blank stare at worst. But there are many cases where more leads would be wasted, and more sales reps means slicing the same revenue pie between more reps.
Who should care about L2R? Because of its impact on revenue, everyone in the organization should care, but it will be of primary interest to four members of the executive team:
The CEO cares because he or she has overall responsibility for hitting the company’s growth targets and creating alignment between CSO and CMO. Many otherwise solid CEOs fail to reach their potential because of a failure to get these functions in synch.
The CSO, as the person with the revenue targets on their back, will be thrilled to know that every part of the L2R framework has been designed to facilitate the sales process and buyer journey.
The CMO has a strong interest in L2R because the marketing department’s contributions to revenue will be carefully measured and acknowledged.
The CFO appreciates L2R because it is a series of steps where inputs and outputs are captured, with a goal of effective use of each marketing and sales budget dollar.
Objectives And Components Of Lead-To-Revenue
The objectives of the lead-to-revenue process are to:
• Achieve better results. If you do not achieve your macro revenue and profitability targets, it doesn’t matter how well you do at the component parts. But you can definitely achieve some micro benefits:
• Increase your sales close rate.
• Decrease your sales cycle time.
• Shorten the amount of pipeline coverage needed.
• Improve critical conversion ratios, like:
- Inquiry to marketing qualified lead (MQL)
- MQL to sales qualified lead (SQL)
- SQL to sales opportunity
- Opportunity to closed sale
• Synchronize marketing and sales. This alignment is crucial for two reasons. First, to make sure that marketing gives sales what it needs (campaigns, content, sales tools, etc.) to close business. Second, to ensure that sales takes full advantage of what marketing delivers. It is very easy, and almost commonplace, for marketing and sales to pursue goals that are fine if pursued from a department-first view, but not so fine if pursued from a top-down perspective.
• Ensure constant improvement. You do this by building a test framework. One of the most exciting things about building an end-to-end framework is that you can test any aspect of the process to determine its impact on top-line results. This allows you to achieve continuous and lasting improvements.
• Create greater efficiency. I often refer to L2R planning as “building the machine.” The best L2R machines are what I call coin-operated — you provide inputs like dollars, media,\ and time, and a predictable number of leads and sales happen downstream.
There are eight components that need to work in harmony to support the L2R framework, including brand strategy, content, sales processes, and proper utilization of marketing and CRM technologies. You can read about all of these components in detail here. Each component is necessary to ensure that you are both efficient on the micro level and effective on the macro level. L2R practitioners know that the goal is not just about making what you are doing more efficient — you need to start with the strategy that will make you effective. To put it another way, creating more efficiency in a poorly designed system, will just help you go broke faster.
If you do not currently have a lead-to-revenue framework, get this initiative started now to have a better 2018.
Note: this article originally appeared at Forbes.com November 22, 2017