Wednesday, October 18, 2017

Lead Quality: What Is It And How Do You Measure It?

"How do you measure lead quality?" inquired a Board member and a venture capitalist during a recent Board meeting.  That question led to a very lively discussion that span from the approach to lead generation to the process of closing deals.

The lead quality is a fundamental question that reflects the success of not just demand generation, but the entire marketing engine and sales execution.

Lead Quality Success Metrics 

One of the common demand generation mistakes is solely measuring the number of leads, regardless of their quality, conversion rates and timelines.  This practice often leads into misalignment with sales teams, subjective reporting, conflicts, and lack of accountability for results.

Ultimately, the only thing that matters in terms of the lead quality is its conversion into a closed/won deal.  

However, with longer sales cycles, it can take months and years to measure and improve the lead quality if you solely rely on the ultimate success metric.  So it is important to introduce micro-metrics that would monitor the lead quality at each conversion point and provide an opportunity to accurately predict whether it will turn into a deal and introduce process improvements as necessary. 

Below are some of the key variables for measuring the lead quality:
  • Lead's propensity to turn into a deal
  • Time to close the deal associated with that lead
  • Revenue the lead generates -- first year revenue and LCV (lifetime customer value)
  • Cost of the lead and cost of the deal it creates

While the attributes above are paramount for measuring the quality of leads, there are many other variables, such as the number of touches by sales people, sales complexity associated with the deal, marketing resources associated with generating the lead, ability to scale that particular type of a lead, etc.

Monitoring Conversation Points

Monitoring and measuring the lead quality at critical conversion points gives early indications on lead quality issues.  It also helps with identifying potential process issues and execution challenges -- in demand generation, sales/business development, and other marketing & sales areas.

The funnel below is a typical one for companies in B2B space.  The steps and nomenclature may be different from company to company, however measuring conversion rates between them is equally critical.

Let's take a closer look at the key conversion points.  

  • Leads to MQL (marketing qualified leads) or HQL (high-quality leads) conversion rate helps to identify the percentage of leads that meet marketing qualification criteria.  This criteria is typically defined based on ideal or desired customer profiles.

    Once the lead scoring system is in place, demand generation team looks at the closed deals on an ongoing basis, analyzes them and updates the scoring system.

    Lead scoring is usually automated via marketing tools or by using predictive scoring tools, such as with InferEverStringLattice Engines and others.

  • MQLs to SDR (Sales Development Rep) Meetings and Opportunities conversion percentages indicate how easy it is to get hold of the lead, conduct a meaningful conversation, and schedule a meeting.  SDR or BDR conversations also provide invaluable qualitative feedback on the lead quality in terms of the problem the prospect is trying to solve, timeline, budgets, etc.

    It is important for demand generation team members to speak with SDRs or BDRs daily to get feedback on the leads in order to apply incremental process improvements.  There is also a growing trend of putting SDRs within Demand Generation teams in Marketing.

  • SDR Opportunities to Sales Meetings / Stages conversion rate indicates how well SDRs have qualified their leads, documented prospects' needs, collected data for sales reps and set the expectations with prospects.  Conversion rates at these stages are less indicative of lead quality and more of the health of SDR organization and processes.

  • Sales Process Stages to Close conversion rates identify how leads are moving through different stages of the sales process, where do they get stuck, and how to expedite these leads through the pipleline.  These conversion rates also can pinpoint to the areas for sales process improvements and changes.

  • Inter-step Conversion Metrics. In order to build a well performing demand generation engine, it is important to monitor not just conversion rates between adjacent steps, but also measure the ones that skip steps, for example leads to opportunitiesMQLs to opportunitiesleads to dealsMQLs to dealsopportunity to deals, and others depending on the particular sales model and funnel type. 
    and marketing automation tools, such as MarketoPardot from SFDC, Act-On, and others allow building dashboards and reports that make it easy to track these conversion rates.

  • Conversion Metrics by Attribution.  Once you have figured out conversion rates between various stages of demand generation and sales process, it is really useful to break down these metrics and costs further by lead acquisition channels. 

    Marketing automation tools typically provide basic functionality for this step, however you may want to use advanced attribution tools, like Bizible, to learn about different lead acquisition / influencing / converting channels and correlations between them.

Measuring lead quality at its various inflection points helps with accurately assessing the health of demand generation and sales processes.  It enables companies to objectively identify broken processes and fix them.  It also provides a clear idea to where invest marketing dollars to produce best yields and scale the revenue while keeping costs down and sales efficiency high.

Thursday, October 13, 2016

Dear Samsung CEO, It's Time To Burn Some Phones!

Chairman Lee, The Leader!

In 1995, Chairman Lee of Samsung burned 2,000 inoperable phones in a bonfire on the pavement at the company’s plant in Gumi, South Korea. 

That was bold!

That was unconventional!

That was a leadership move!

It sent a distinct message: quality matters!

A Sea of Pain

Fast forward 21 years.  Samsung is facing the same issue -- quality control. 

In fact, Samsung is in a sea of pain.  

Note 7 is going through its second recall.  Media is blasting Samsung.  

Customers are unhappy.  Employees are working nights and weekends to address issues.  

The company’s losses will be in billions dollars -- between the written down inventory, exchanges, fines, stock price drop, and lawsuits.

The Worst Part

The biggest risk that Samsung faces is not the immediate financial loss.  It is the loss of its enthusiast base, the engine of its dominance in the mobile world.  

These are people who pre-order Note 7 without even seeing it first.

These are people who take a chance and stick with Note 7 the second time around.

These are people who influence hundreds and even thousands of other consumers.  

These are the building blocks of any consumer brand.

I Love(d) My Note 7!

I love my Note 7.  Well, mostly. 

It is the perfect phone for me – both for my work and personal life.  

I love the form factor, the design, the way the stylus works, the screen, the always-on clock, the fantastic battery life, the waterproof feature.

I was OK with some performance lag compared to Note 5.

I was even willing to live with an occasional overheating problem, as long as it was safe.

Not OK!

I am not OK with the way Samsung responded to my overheating complaints.  

Two phone calls in between recalls were met with complete dismissal from Samsung reps.

I am not OK with not being able to use my phone on flights.  

I am not OK about worrying that my Note 7 may hurt my kids if they occasionally use it.

And I am not OK with a $100 credit offer if I buy another Samsung device.  I find it offensive. Enthusiasts that can afford to pre-order a high-end device like Note 7 are not driven by a pitiful handout. They are driven by technology and brand loyalty.  

Dear Samsung CEO, Time To "Burn Phones" again!

Samsung has a unique window of opportunity to turn the negative momentum into a positive one!  But that requires leadership and a bold action.  Just like Chairman Lee did in 1995.

My advice: Give free Samsung Galaxy S7 Edge phones to people who are going through the second return. 

As a gift.  

As an apology for going through two returns.  

As an apology for separating them from the phone they loved.  

As an apology for the jokes they endure from people they influenced.  

As a thank you for being a brand champion! 

As a way to get the defective Note 7 handsets off people's hands and limit liability.

As a way to stop the negative press and ignite and wildfire of positive coverage.

As a pay forward gesture that will pay off 100x in the near future, when it's time to buy Galaxy S8, or Note 8, or a Smart Refrigerator, or a 75-inch Curved 4K TV.

Because nobody has done anything in that magnitude before.

Because your brand champions will never forget it. And when it comes for a brand choice, they will remember the values Samsung stands for.

Calling for Dr. Oh-Hyun Kwon!

Sunday, January 3, 2016

Your CEO: Brand Asset or Liability?

Having experienced four CEO "universes" within the last six months, I couldn't resist but to compare different CEO styles and their impacts on employees.

The CEO impact doesn't stop with the employees though! It extends further, shaping how companies deal with their customers, partners, and other parties.

This seems to be a pretty hot topic for quite a few people, at least in Silicon Valley. After numerous conversations on this very subject, I decided to write this blog, attempting to break down some key CEO characteristics and their impacts. 

Industry Experience and Vision.
One of the most important CEO assets is an

in-depth understanding of the industry. This is especially critical for small- and medium-sized companies. Industry experience allows a CEO to avoid extremely costly strategic mistakes. 

The CEO with a strategic vision grounded in industry knowledge can unify and energize his or her employees and quickly earn their confidence and respect.

"Professional” CEOs often lack an understanding of and passion for the industry. They substitute this for "professionalism" and a consultative approach, which  inevitably completely de-energizes companies and can drive them into irrelevance or extinction.

A somewhat viable alternative is having a co-founder or a product executive that is knowledgeable AND passionate about the space.  But the CEO has to be able to own and publicly convey the vision and the strategy.

Huge corporations with multiple unrelated product lines are clearly an exception to this principle. 

Openness of Communications. 
One of the most fatal flaws of a CEO is lack of transparency with executive staff and the rest of the company. This results in employees second-guessing the CEO's intentions as well as their colleagues' relationships and intentions with the CEO.

It breeds mistrust and creates uncertainty at all levels, and it creates unnecessary politics in the executive ranks, which translates into poison for the rest of the company. If untreated, it often becomes a cancer that slowly eats away at the company. The valuable energy is spent inwards instead of outwards. 

Open communications by the CEO, on the other hand, encourage executives to emulate the style and makes the company a better place to work in. It translates into honest and consistent external communications, turning the company into a trustworthy partner, for both partners  and customers.

Actions vs. Words. Some CEOs use actions; some use words. Obviously, it is easier to come up with words. Words like "vision and mission" seem to be favorites with CEOs with management consultant backgrounds. Word-driven CEOs can even convince and temporarily energize companies by using just words.

However, the inconsistency between their words and actions eventually catches up with them and disillusions their employees. It sends a message that double standards are OK and that promises can be broken. 

This disconnect affects external communications, leading to lost sales, lost customers, and brand damage.

Micromanagement and No-management. Micromanagement is my pet peeve. It sends a message to employees that they are not trusted. It breeds fear and kills innovation, and most talented employees end up leaving and growth stalls.

The other extreme is lack of control and accountability, which encourages random or no decisions and breeds politics.

There is a golden middle that I have learned from an executive I worked for early in my career: hire the right people and provide them with the freedom to innovate, but have a clearly defined system of accountability, execution, and metrics.

As a side note, one of the micromanagement (and manipulative) techniques that grates on me is the assigning of ambitious (yet meaningless) tasks with aggressive deadlines that get everybody so wrapped up in them and stressed that they have no time to question the direction and see the bigger picture.

Crisis Management. Crises happen. They are a reality of life in any company. A crisis can be either external or internal. It can be a result of be a competitive move, a product failure, a lawsuit, dealing with the board or investors, employee issues, or so much more.

The way in which a CEO handles these issues sends a message to the rest of the company and industry. Does the CEO panic or become aggressive or play the blame game? Or does the CEO handle the crisis calmly and rationally? Other factors that count when handling a crisis include speed, confidence level, decisiveness, and communications.

Inexperience and lack of confidence in dealing with crises can very quickly turn disastrous both for employee morale and the company brand.

The Kitchen Sink. Then there are obvious virtues that some CEOs bring to the table, such as honesty, fairness, truthfulness, and transparency, and their counterparts: dishonesty, cheating, lying, and manipulation. But these, and many more, are too obvious to write about.

What are your favorite CEO assets and pet peeves? 

Wednesday, March 18, 2015

5 Steps For Grouping Your Keywords - Content Marketing Strategy

In my last blog I talked about the major change in the way Google and other search engines are ranking keywords -- keyword groups vs. individual keywords -- and the major impact it is having on SEO and content marketing efforts.

Keyword Grouping for Best Content Marketing ResultsAfter receiving several email requests to share the best practices on how to group keywords, I decided to write a blog on that subject.  It also gave me a chance to play around with a new infographics maker tool called Piktochart. 

Summary of Steps from the Infographics:

Step 1: Talk To Your Customers
Talk to your customers.  Ask how do they refer to your product / service. Ask them how did they find you.  What are the keywords they used in the search engine query -- if that's how they found you.

Step 2: Talk To Your Support and Sales
Ask your support how your customers are referring to your solution when they are having a problem.  Ask your sales people the same question about how your prospects refer to your product.

Step 3: Conduct Competitive Research
Find out what are the keyword variations that your competitors are ranking for.  Run SEO tools on their site to find out what are their target keywords.  Then compare these with the keywords they rank for. The keywords that are not targeted but still ranked belong to one of the keyword groups.

Step 4: Use Google's Suggestions
Type your main keywords in the search engine and see what are Google's suggestions.  These may belong in the same group. Look into Google Adwords for related and suggested keywords.  Also look for specific queries in Adwords.

Step 5: Organize in Groups
Map out all the relevant keywords and organize them in logical groups -- based on the steps above and your subject matter knowledge.

Keep Testing!
This process will give you a starting point with the keyword groups.  Keep testing and updating your keyword group map -- since the groupings change and your competitors activities impact SERP rankings.

Some of the SEO tools that could be useful are Moz, SEMRush, Screaming Frog, Majestic SEO, and Positionly.

Wednesday, March 11, 2015

A Major Shift in SEO and Content Marketing: Keywords vs. Concepts

One of the key trends discussed at SMX West 2015 is something we have been increasingly noticing from search engines -- focus on concepts vs. keywords.

This paradigm change has been causing shifts in SERP rankings for the last several months and we have been adjusting our SEO and content marketing strategy to align with it.

Concepts vs. keywords change is pretty fundamental and will most likely be continuously impacting your search engine rankings.  This article examines more details behind this change, discusses how it can affect your rankings, and provides five strategies for taking advantage of this trend.

Keywords vs. concepts/themes.  For years we have been focused on specific keywords.  We have been identifying target keywords,  monitoring their performances, and creating campaigns to improve our rankings.

Hard to Manage.  You can easily see how this SEO approach can get overwhelming and unmanageable.  Each product can have hundreds of keywords to target.  If you have multiple products, you may need to be tracking and promoting thousands of keywords.

How do you accomplish that? Do you create thousands of content pieces a month to rank better?  That sounds like a daunting task.  However, many companies have been doing exactly that -- either manually or by using tools to automate the process of creating individual content pages for each keyword.

Poor content quality.  It's obvious that it's impossible to create unique and engaging content for thousands of related words every week without astronomic budgets and resources.  As a result, the content produced through this strategy has been highly repetitive and lacked value.

Search quality issues.  These tactics allowed companies manipulate search engines for a while, resulting in low quality search results.  However, Google has been catching up with such tactics and penalizing low quality and duplicate content with Penguin and Panda updates.

And now a more fundamental change is happening.

Semantic search.  With the semantic search becoming more prevalent, Google is increasingly ranking groups of related keywords vs. individual ones.  The grouping criteria is based on the word order, paid/organic search history, contextual meaning, word relationships, content relevance, domain authority, and other factors.

Good news!  This means that your SEO work for specific keywords may result in uplifting your rankings for related keywords as well, even the ones you have not been specifically targeting.

Less on-page SEO.  It also means less emphasis on the on-page SEO -- less counting how many times specific keywords should show up on your web pages.  The practice of creating a page for each specific (related) keyword becomes mostly irrelevant.

Unexpected results.  On a flip side, you may discover wild swings in your target keywords rankings because these specific searches are not as compartmentalized as before.
They are viewed in a wider content of keyword groups. 

As a result, your efforts on individual keywords may not be as effective as before.  This could be especially the case if you have a better established competitor that dominates related keywords in SERPs.

Here are five recommendations on embracing this change and making the best out of it:
  • Do research and understand top keywords you want to focus on
  • Do monitor your individual keywords so you know how they perform and which competitors to focus on
  • Do try to understand how individual keywords are grouped in concepts / themes
  • Do create good quality and unique content around the themes/groupings you want focus on
  • Do use social channels to promote your content and generate high quality links
Also check out my blog on 5 steps to organize your keywords in groups for best SEO & content marketing results

Tuesday, February 10, 2015

9 Essential Principles For Successful PPC Strategies - B2B Marketing

Skydiving looks very simple when somebody else does it.  Beautiful skies.  Amazing views.  Adrenaline rushing!  So cool!

...Until you get up there.  Then things change.  All of the sudden the skies don't look as friendly.  The landscape below can be deadly.  Every detail matters a lot.  

The reality is that it never gets easy, especially when there may be an ambush waiting for you when you land. 

PPC looks simple as well, at least from the surface.  Load up the keywords, come up with an ad copy and a landing page, define your bids, and leads should be pouring in!

The reality is very different though.  Results are often disappointing. Time is wasted. Budgets are spent.  Bids are placed.   Yet there is no meaningful amount of leads. 

What's wrong with this picture?

Complexity.  Google Adwords have become an incredibly difficult platform loaded with an incredible amount of features.  Anything from defining the types of matches for your keywords to figuring out the right grouping for the best results and quality scores to what kind of words to use in the ad copy to what day and time to advertise, which geographies, and many other factors.

Competition.  A crowded market is like a battlefield.  It is likely that your competitors have dedicated at least as many resources and funds for Adwords as you have. Plus they may have a decent agency.

This makes a huge difference because a really good agency has best practices, specialized resources, and a privileged access to Google.  It would be almost impossible to win the game without similar resources.

Funds.  CPC increases every month in many competitive industries.  With more players and more money spent by each vendor, the cost of conversion goes up.  Even more importantly, the entry barrier goes up significantly.  This means that even with $10K per month you may not get meaningful results.  You may need a significantly larger budget and a rock star agency plus a great in-house resource to succeed.  

Lead Costs .  Even then, the cost of each lead may prove to not be worth the investment. 

This is a dark, yet a realistic picture I painted to instill reality into inexperienced marketers itching to try this solo and to help marketing professionals ground overly eager executives itching to see their company name and specific messages on the page 1 of Google search engine quickly. 

Bringing a parallel to military, it is the same as sending amateurs to fight a Special Forces unit and expecting amazing results.


9 Best PPC Practices

Yet, PPC programs do work.  Below are 9 recommendations on building a successful PPC program in B2B space.

1.  Define Your Goals. What are your goals?  Are you you looking to generate leads, increase brand awareness, or both?  It's critical to have a clear set of goals start.  Set realistic expectations for the initial success and growth afterwards.  

2.  Define Your Target Lead Types.  This is one of the most critical steps.  Define what kind of leads are you expecting to generate.  If you skip this step and start getting lower quality leads, your conversion economics may not work and you may end up spending a fortune on acquiring traffic that doesn't convert.   Check out recent research on this topic from Industry View (see the chart below).


3.  Reality / Economics.  Find out what are the CPCs for your target keywords.  Multiply by the conversation rates to calculate the expected cost of acquisition.  Add 10-15% for agency fees.  Is this number feasible for you?  If not, PPC may not be the right channel for you.  If it is, define the max amount you are willing to spend on each lead.  Calculate the delta you are willing to pay for the brand awareness.

4.  Find a good agency.
This is a tough one.  There are lots of OK agencies and terrible ones.  Things to look for is experience in your space, ability to assign an experienced resource, desire to spend enough time with your account, willingness to start with a smaller investment, an ability to show early results, and willingness to work with you if the initial results are not there.  Expect and be ready to go through several bad agencies till you find a good one.  
5.  Internal Resource.  You should expect to have an internal resource focused and later maybe even dedicated  to this program, because an external agency is never going to be as knowledgeable in your space as somebody from your organization. To be effective, this has to be a joint internal/agency effort.

6.  Start small.  
Start as small as it is feasible.  In some industries that may not be possible. Work with your agency to see what's the minimal investment that can yield meaningful results.  Then add a delta for experimenting.  In some cases this can be as high as 60%. 

7.  Time and resource expectations.
Budget time for experimenting with keywords, ad copies, landing pages, etc -- until you start seeing a steady flow of leads.  It may take anywhere from a week to a few months.  It is a common mistake to expect an immediate impact.  There are at least 20-30 parameters that can impact the results.  It will take time to identify these, fix them (sometimes multiple times), A/B test, and start seeing the impact.

8.  Expand. Expand into new keywords, geographies, PPC programs, etc. This will help you find the most optimal channels and bring down conversion costs. 

9.  Ramp up organic programs.
At the end of the day, you can't win a battle with just a single type of a weapon.

PPC is just one way to generate leads.  It is expensive.  It's complicated. As a result, very often it is not a scaleable way to generate leads.  

While you can sometimes make PPC economics work for you, you can get significantly better results when you apply the knowledge and expertise gained from PPC to your organic efforts, like SEO, content marketing, and social marketing. 

In our case, only 25% of our highest quality leads comes from PPC.  The rest come from organic efforts, like content marketing, social / community marketing, SEO, etc. 

Best of luck in your lead generation efforts!

Thursday, January 22, 2015

100% Inbound Lead Generation - Possible?

Is it possible to completely eliminate cold calling and other outbound activities that cost a ton and don't convert easily?

Yes, it is.  In 3 years, we have shut down all outbound activities, like cold calling and trade shows.

Meanwhile, we have scaled inbound activities, like content marketing, SEO, social and community marketing.

That strategy has paid off a lot.

 Here are some results:
  • 20x increase in the highest quality leads
  • 9x increase in cost of leads
  • 8x increase in conversion rates

This approach liberates sales people from the lead generation activities, providing them extra time to focus on converting these leads.

Here is the latest breakdown of high quality leads:
  • 65% - organic leads (content marketing, SEO, social, community, digital PR)
  • 25% - PPC
  • 10% - email nurturing

No trade shows last year.  No cold calls.  No paid content syndication.  No airport or freeway banners.