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 Infer, EverString, Lattice 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 opportunities, MQLs to opportunities, leads to deals, MQLs to deals, opportunity to deals, and others depending on the particular sales model and funnel type.
  
  Salesforce.com and marketing automation tools, such as Marketo, Pardot 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.

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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!

5 Characters You Meet In Successful Modern Marketing Teams

What does a winning marketing team look like nowadays?

How different is it from 5 years ago?

There are many new challenges we face today.  There are also traditional marketing challenges that never went away.

- Create differentiated positioning
- Create & update messaging
- Establish thought leadership
- Establish a repeatable and scalable lead generation program
- Improve lead conversion rates  
- Decrease customer acquisition cost (CAC)
- Gain social and search visibility
- Support sales
- Build meaningful and accurate metrics 
- Collect and report daily, weekly, monthly and quarterly numbers  

Add all different programs, communication channels and angles that need to be built and maintained:
- SEO
- SEM
- Email nurturing
- Social media
- Industry communities
- Customer boards
- Gamification
- Blogs
- PR
- Analysts
... and much more

The process of addressing these challenges starts with an effective marketing team.  To build it, CMOs often have to reconstruct their existing teams.  Some skills are unchanged and are still in demand.  Others may not be needed anymore or may have morphed into new ones.  For example, marketing communications skill has transformed into product journalism and corporate reporting.  There are also brand new skills, like SEO Analytics & Messaging Manager.

Below are top 5 essential skills for today's marketing teams:

(NEW) Product Marketing++.  This skill is relatively unchanged. You still need somebody on your team that can develop in-depth product, customer and marketplace understanding.

This person has to be able to come up with clear product messaging, top differentiators -- things that none of your competitors can do and things that matter most to your customers.

This person will have to stay connected to your development team, as well as keep abreast of the market and competitive changes in order to update the core message as necessary.

The skill upgrade (the "++" component) comes in the ability to utilize the web, social media, hashtags, communities, SEO and other web tools to proactively conduct competitive research, industry trends analysis, message A/B testing, etc.


(NEW) Product Journalism and Corporate Reporting.  (f.k.a. Marketing Communications).

Yes, MarComm is dead.  The time of fluffy and meaningless collateral materials is gone.  In today's world, unique and engaging content is the king!   

In my previous blog entry I talked about the heroes and zeroes of content marketing.  You definitely want to be looking for a hero -- somebody that has a very creative way of telling your story.  This person will break down the higher-level message into many engaging, shareable and (when possible) viral product, customer and industry stories.

Once developed, these stories will have to be further modified, enhanced and formatted to fit well into different channels, e.g. blog entries, press releases, TTL+description, social media blurbs, community posts, emails (or series of emails), etc.

In an essence, each story becomes a mini-launch of content that drives your SEO, improves your thought leadership position, engages your prospects and customers, and generates high quality leads.

It took me a while to figure out the core skill set requirements and find the right fit for this position.  I interviewed lots of candidates with marketing communications and product marketing backgrounds, but none of them fit the bill. However, I had a really good luck with finding and hiring people with journalistic experience that have been writing to the audience we are marketing to.


(NEW) SEO Analytics & Messaging.

For many CMOs SEO remains a black box.  Yet, there is no dark magic in using SEO to maximize results and generate revenue.  No shady practice of buying links.  No figuring out how many times a certain keyword has to appear on a page.

There are essentially two important skills here:

1.  Ability to find & utilize tools to find relevant information, like numbers, keywords, content utilization, etc.

2.  Making sense out of these numbers in order to identify trends, provide actionable suggestions on keywords, landing pages, content needs, inbound lead generation opportunities and lead hacks.

The ideal SEO analytics person will have both analytical and creative skills.  There is an increasing number of marketing tools that generate lots of interesting data.  But it takes a skill to translate numbers into actionable suggestions.  For example, Google Analytics gives you tons of data on site visits.  Yet, most of it is buried and is accessible only through custom reporting.  A good SEO analytics person will figure out how to make sense out of this data and find relevant and meaningful trends that could show the flow of most valuable visitors, pages and assets, as well as how they change overtime.

A great SEO analytics person will work with your SEO agency to research the latest trends, explore different tools to give you an edge against competition in defining the most valuable keywords, reference sites, competitive moves, link building and PR opportunities (that your PR team / agency has most likely missed).

Ultimately, 80% of your inbound marketing success depends on the right messaging and whether or not you are focusing on the right keywords.  Use shortcuts here and you can spend millions on your inbound efforts and not get any meaningful results.




Marketing Automation & SFDC Black Belt.  

Marketing automation tools have been around for a while. There are many ways you can use them - from a rudimentary bulk email sending to sophisticated lead scoring, establishing and capturing new types of leads, customer flows, and generating in-depth metrics and powerful dashboards.

Every single one of these areas can get really complex, really quickly.  Yet, it can make a huge difference in your bottom line results.

For example, email marketing is a seemingly simple concept, but it has quite a few complexities that can generate results anywhere from no leads to hundreds of leads.

Some of these factors include the ability to create mobile-friendly content, come up with effective subject lines, pick conversion-friendly calls to action, A/B test 5-10 variables, decide on HTML vs. Text vs. Video, pick the most optimal colors, frequency, days of week and times of the day, figure out how to categorize and break down your database, etc.

There is also lots of data that exists in sales and marketing automation tools.  It is important to understand and establish a regular flow of critical metrics, such as conversion rates (lead to oppty; oppty to deal), conversion times, numbers of touches, lead sources breakdown, lead lifecycles, etc.

It will bring a complete transparency to marketing activities, as well as a clear understanding of which marketing campaigns do work and which don't.  It will allow to shift priorities and marketing budgets to the programs with the best ROI.

For this role, you may want to find a person that has strong skills in analytics, data visualization, presentation, multi-tasking and project management.



Employee vs. Outsourcing.  Project Management.  

Use contractors in as many areas as possible.  Avoid the team bloat and racking up costs that unnecessarily increase your CAC .

However, blindly outsourcing can be a mistake as well.  The key thing is finding a working balance for each of critical marketing micro-skills.

For example, SEO and PPC have a very technical component, as well as creative one.

For the technical component, it is almost impossible to match the depth of a good SEO or PPC agency that spends 100% of their time on learning technical details as well as keeping up with the latest trends and changes from Google.  It is clearly a good idea to outsource that part.

However, no agency is ever going to develop an intimate understanding of your customer base and your industry.  They will never be able to completely nail down your keywords.  You may want to have your SEO and content person (people) working closely with the SEO agency for the best results.

That approach works well with other areas too, such as content creation, graphics design, landing page coding, etc.

Needless to say, the more contractors you have, the harder it is to manage them.  So it is important to have a team member with strong project management skills to keep all the trains moving and on track.  Since the marketing automation person has to be a good project manager too, you may want to combine these two roles in one.


Not a Recipe.  Naturally, each company and industry is different.  There is no one size fits all recipe for building a winning marketing team.  While the skills above are critical and often essential, you will have to assess your specific needs and scale requirements.  That may call for adding other skills and team members, e.g. channel marketing, event coordination, lead qualification, etc.

Inbound vs. Outbound Marketing: 7 Decision Factors

How do you find the right mix between inbound and outbound marketing.  I have seen the wrong model  bring down marketing efforts, jobs and even entire companies.

Here are a few examples:

Example 1:  Two years ago I was having a lunch with a CMO of a small company claiming to generate 90% of leads of his company from trade shows.  They were working at 2-3 trade shows a week.  It is obvious why that model didn't scale - CAC (Customer Acquisition Cost) was way too high. It required too many resources and time-to-revenue was too long.  A year later, that CMO was gone and now the company is almost dead.

Example 2:  A company called Intronis decides on the outbound-driven lead generation model.  It hires lots of cold callers and does tons of trade shows.  The lead generation model fails.  The whole company has to go through painful layoffs.  Here is a quote from an article that appeared yesterday:  "Marketing is non existent…..sales team gets axed…engineer in the drivers seat. Sounds and smells like a sellout…Keep the barebones to support the product but not the partners…not so channel focused anymore. "


Example 3:  On the opposite side of the spectrum, another small company I knew was generating most of their sales from blog entries.  The CEO was a Blog Black Belt.  It worked really well for a while.  Good news - his company got acquired.  The larger company added some outbound efforts.  Not so good news - they are currently having hard times with the number of leads, quality and customer acquisition costs - not being able to scale neither of models.

So, how do you find the right answer?

Before giving up to inbound marketing zealots or caving in to outbound lead generation agencies, you may want to take several factors into consideration:

1.  Your target buyer's persona.
    - Who are the decision makers for your product / service?
    - Who are the influencers?
     - What are their job titles?
     - What are the key challenges they are trying to address?

2.  Where do they fit on the innovation curve?
Are your target buyers innovators, early adopters, or laggards?  This will define to a large degree how to approach them.

Example: If you are marketing a revolutionary new product to innovators, you may want to start with an outbound networking-type campaign through your industry contacts to recruit your first customers.  Later, you can integrate a targeted social media-driven PR component, as well as an inbound campaign focused on people who are looking for relevant solutions.

3.  Channels where your customers find information and get influenced
Where do they look for information relevant to your offering?  Is it trade shows, industry forums, search engines, communities, newsletters, etc?

Example: If you are marketing to decision-makers that don't spend much time online or you are in an industry where the phone is still a more traditional communication method, an outbound model may be the appropriate one.  Conversely, if you are marketing to an audience that relies on social media and online communities for research, contracting a call center to generate leads would be an absurd idea! 

4.  The value of each sale and Customer Acquisition Cost (CAC)
At the end of the day, marketing is an economic tool.  If a certain lead generation model is working really well, but costs too much, then it is doomed to fail.  You have to find the model that works best for you - in terms of BOTH conversion rates AND costs.

Example: We were using PPC for lead gen and it was generating high quality leads that regularly converted into sales.  But the cost of each sale (the marketing part) was about 200% over our target.  And after trying to bring it down for a few months, we had to pause it.

Outbound call center leads generated sales that costed 500% over the goal.  So, we focused on the inbound marketing leads - search engines, communities, social-driven PR, etc.  This proved to be the right model, bringing down our costs significantly -- even below the target CAC.  

Eventually, we revamped the messaging, did complete keyword map revamp, rebuilt landing pages, and changed 3 PPC agencies (before we found the right one)-- and "voila!" CAC is tracking right around the target!
  

5.  Your sales team readiness
No matter how many good leads you bring, you have to make sure your sales team and channel partners are capable of converting these lead types into sales.  I have seen a mismatch here causing many failures.

Example: At one of my previous companies, we started generating lots of inbound leads that needed a moderate amount of follow-up before they closed.  However, our sales team had only channel experience - they did not have the skills or desire to follow-up directly with the prospects.  Result = failure.  Until we upgraded the sales team.

6.  How easy is it to scale?
Some programs can be scaled easily.  Others may require a major upgrade to scale, putting CAC out of whack, at least for a while.

Example: You may be able to scale PPC.  But to substantially scale search engine-generated leads, you may need a sizable investment and patience.  However, longer term results can be huge! 

7.  Mix and change.
My final suggestion is to constantly experiment.  Marketing has been undergoing a major change over the last 3-4 years.  What works today may not work tomorrow at all .  So it is critical to always look for new lead channels.

First, create the foundation with the proven channels.  Then, experiment with 2-3 new ones at a time. By the time one of your foundational channels stops working, you will have 2 new ones that generate even better leads!

And with that... Happy Hunting!

Inbound Marketing - Lead Generation, Metrics and Growth Hacking

Marketing and Sales have been growing closer together in many areas over the past few years.  One such area is lead generation.

Lead Generation itself has recently morphed into growth hacking -- finding new sources and channels for high quality leads and nurturing lower quality ones into opportunities that indicate "near-buying" behavior.

NO MORE COLD CALLING!  Today, marketing can completely relieve the sales team from majority of lead gen tasks, such as cold calling, dialing for leads, "pounding the phones," etc.  The idea is to get prospects educated and sold online - before they even speak with a sales rep.

Unlike the interrupt-driven outbound model, by implementing inbound marketing, you are reaching a completely different type of prospects.  These prospects are more qualified, since they have a specific need and they are actively looking for a solution.  By providing them a variety of relevant tools and information, you are helping in their decision-making process.  By the time they decide to contact you, they are well educated on the product and are most likely willing to take the next step.  Contrast that with a sales rep cold calling and trying to pitch a product to people that don't have a problem they are trying to solve in the first place.

Implementation.  This approach significantly shortens sales cycles, increases conversion rates and drives down cost of each sale.  But how do you implement it?  The first step is lead classification -- understanding what are the most and least desirable leads, as well as all types in between.  Here are some recommendations:



1. Lead Types.  Find out what kind of leads are you getting today.  For example:

- Demo Requests
- Free Trials
- Phone calls
- White paper downloads
- Email contact requests

Brainstorm with your sales team to see what works for them best and worst, as well as what other types of leads you may want to be getting moving forward.

2. Analytics.  Look at your metrics for the last 12 or 24 months.  Even though you can build some very complex models, I would start with basics:
     - Conversion rates - lead to opportunity, opportunity to deal, lead to deal
     - Time to conversion - same as above
     - Costs -  per lead, per opportunity and per closed deal
     - Effort - how much time does your sales team invest in converting these leads?

3. Trends and scalability.  How did these numbers change over time?  Can you grow them easily? Would scaling costs be linear or would they require a significant investment -- to take to the next level? Can your marketing team handle the growth (team size, budgets, skills)?

4.  Pyramid Map.  Next, build a pyramid like the one on the left, as a visual representation of types of leads you are going after.

5.  Lead Inclusion / Exclusion.  Decide on which types of leads you are going to focus moving forward.  At this point, you may decide that some types of leads are too expensive.  You may find out that some low quality leads are even not worth pursuing due to the effort required. 

For example, after this type of analysis, we have decided that leads generated by an outsourced lead generation agency were too expensive and required too much effort from our sales team, making them completely ineffective in comparison with other lead types.  Instead, we shifted our focus on higher quality leads that required significantly less effort from our sales team.


6.  Planning.  Once you have the lead metrics, analysis, lead map and your sales plan, it is very easy to put together weekly, monthly and quarterly plan of how many and what type of leads you need.  Knowing the cost per lead and conversion percentages will help you accurately forecast marketing budgets - in terms of their size and timing.

7.  Metrics.  Finally, I suggest monitoring lead metrics daily, weekly, monthly, quarterly and annually - to measure how you are executing against the plan.  Sometimes, you may need to to adjust activities - due to market changes, competitive moves, opportunities, etc.

You can add more advanced metrics later, like lead scoring, heat map, etc. But it is critical to intimately understand the effectiveness of each lead type before implementing these, otherwise lead scores are useless and the sales team will stop taking them seriously.

We have created a daily lead generation report that gets emailed to marketing, sales and relevant executives at the end of each business day.  This report covers number of leads in each category, broken down by source, type, relevant lead details, etc.  The same group of people receives a weekly lead composite report that looks not just at weekly numbers, but weekly and monthly trends in each category, enabling us to discover very interesting and useful micro and sometimes macro trends.



In my next blog entry in CMO Guide to Inbound Marketing, I will discuss the lead gen mix: outbound vs. inbound.

5 Tips On Selecting a PR Agency

  PR is dead, right?  Not really.  It has just morphed into something with much stronger social media and inbound marketing components.  

Unfortunately, many PR agencies / pros did not evolve, which makes it hard for marketing executives to decide whether their agency is effective or not, as well as picking the right one to partner with.

As we revamped our messaging and had several major announcements coming up, we decided to shake things up a little and went through the process of finding a new PR agency.  Here are tips that worked well for us.

1.  Set your goals.  What is the primary reason behind PR efforts in your company?  Is it to bring new business?  Raise money?  Get acquired?  Get noticed?  The primary reason will define the type of agency you will go after.  

In our case, the primary reason was business expansion.  We had over 500% growth last year and we are gearing up for more this year!  We wanted to augment our SEO and inbound marketing activities with increased social media, relevant industry press, blogger and vertical community campaigns.  We have also a major launch coming up.  All that made it a good time to look for the right PR / social marketing agency.

2.  Understand your target markets.  Who is your buyer and how do they find products / services like yours.  If you are marketing to SMB segment, it probably is not the most effective strategy to go heavily after top industry analysts and major publications.  A better strategy may be going to after tier 2 / 3 analysts that blog a lot, as well as vertical communities, bloggers, etc.   

3.  Define success criteria.  How do you recognize the right PR agency when you come across them?  Here is my high-level checklist:

- Industry experience.  It is much easier to work with an agency that has experience in your market segment.  They typically know your sub-segments, market trends and competitors.  They would probably  have have ideas what worked and what didn't in terms of messaging and launch / marketing strategies.  They would most likely have relationships and a database of contacts with key industry figures, analysts, bloggers, and journalists.

Otherwise, you may find yourself spending lots of time bringing your PR agency up to speed in all these areas.  It would take time for them to build a database of contacts, build relationships, etc. 

- Inbound marketing / social media experience.   You would be surprised how few agencies "really" have these skills.  Most claim they do.  70% of the ones we looked at, did not have these skills.  20% thought we would win if only we could be active on Facebook, Twitter, Google+ and LinkedIn.  Clearly, we don't need a PR agency for that level of social media presence.  Finally, 10% really understood what it took to win the "inbound marketing battle" with detailed plans and tools that went far beyond the typical social media efforts.

- Track Record.  We wanted to see previous success stories with other clients.  In all fairness, there is only certain level of success even the best PR agency can bring to a company.  However, you can look at their past / current clients' press releases, media coverage, SEO rankings, and messaging and get an idea on how creative is the agency.

- Available Resources.  If a great PR agency is slammed with work and more clients than they can handle, you may not get the attention you need for your success.  So, it is critical to find an agency with enough resources and time to dedicate to your success.  It is also important to find out who specifically will work on your project.  You would want to be comfortable with that person's background, attitude, availability, etc. 

- Proximity.  In this day and age, proximity seems to be not important.  There is Skype, email, IM, and social media for effective remote communications.  That is mostly true.  

All other factors being the same, I much rather work with an agency that is local.  For example, we have spent two days with our new PR agency in person to kick off our upcoming launch planning.  I can't imagine having the same interaction quality, chemistry and results via Skype, con call or email.  

- Attitude. It is critical to find a PR agency that REALLY wants your business.  There  are plenty of stuck up, unfriendly agencies out there.  It will be very ineffective and frustrating to work with them.  

For example, one of the finalists presented really well at the first pass.  However, during the second meeting their attitude turned into, "we get enough business without you" and "you should feel lucky that we are taking you as a client," "sign the agreement now and don't waste our time."

There is no place for an attitude like that.  If they are acting this way before getting the contract, imagine how difficult would be to work with them through the launch when you need their presence most.

- Budget. There is a wide spectrum of prices - from a few thousand dollars a month (typically from PR contractors) to tens of thousands dollars per month (from "high end" PR agencies.)  More expensive does not necessarily mean better quality.  It could mean overhead, bloated infrastructure or just arrogance.

The "stuck up" PR agency was double the price of its competitors.  They "justified" it by more services they provide.  However, after looking in-depth, they were offering half of what others were providing.  

This said, I would warn against the "nickel and dime" approach.  You have to recognize a good deal and know when to stop the bargaining process.  PR agencies are in business to make money as well.  If we are not being fair to them, the relationship may not last.   

4.  RFI. After you know approximately what you are looking for, try to obtain a list of PR agencies that are active in your segment, as well as the ones you have worked with before.  Send out an RFI (request for information) outlining things you are trying to accomplish and what kind of help you are looking for.  You can easily find templates online.

5.  Proposal / Selection.  We ended up with around 50 RFIs sent out.  We got 12 responses.  Picked 3 finalists.  We invited each one of them to pitch the final proposal with expected results, resources, dates, plans, etc.  This step brought some surprises too.  The strongest candidate at the RFI stage turned out to be a "fluff" agency. 

However, #2 agency came in very strong.  We were very impressed with every single attribute of their final proposal.  And we made our selection.

Once the selection process was over and we signed the contract, the winning PR agency came into our office the following week for a 2 days kick-off session.  We refined out social media / inbound marketing plan,  brainstormed on the messaging,  and assigned specific action items.  So far, we are very happy with our choice.  

The proof will be, as everything in Hack Marketing approach, in our launch success and the delta in the overall metrics we have identified.

It's all about content... and metrics

How important is content quality in your marketing efforts?  Lip service aside, many organizations treat it  secondary at best.  Yet, in the modern world of online marketing, content is one of the most important components of your success.

Let's take an example of email nurturing.  Last week we were planning an email campaign with a very strong article written by an expert and a decent landing page.

We wrote the email and were thinking about the subject line.  My team member had it as "7 ways to ..."  To me, it seemed a little too "fluffy."  So after some more brainstorming we came up with another line that was more informative (at least IMO), like "xx  xx failure rates."

The theory behind it was that the "email receiver" would click on it because it would appear to be more of an informative email vs. "push my products" one.  We spent about an hour on the subject line debate.  Most organizations I know would have considered this as wasted time.  Was it though?

We conducted A/B test during the next few days.  Same email, same call to action, same landing page.   Different subject lines.

Results:

Subject Line 1: "7 ways..."   Open rate: 4.4%, click through rate: 0.2%
Subject Line 2: "...rates"  Open rate: 7.0%, click through rate: 0.5%

As you can see, there is a huge difference in these rates, which translated to 12 (SL1) leads against 50+ (SL2).  This is one of the best demonstrations (supported by metrics) of the difference that content quality makes.

The next A/B test will be this week.  We are going to be testing the email text.  We tuned it on Friday.  Given we see interesting results, I will blog about it later.

Marketing to SMBs: Lead Generation, Conversion Rates and Sales Tools

This post is the continuation from 8 Key Elements for SMB Marketing (Part 1).  In this entry, I would like to focus on effective lead generation and nurturing practices, sales tools, as well as an integrated sales and marketing approach.

Lead Generation.  With small deal sizes and large number of customers, enterprise-style 1:1 marketing is usually ineffective.  Instead, I have seen great results with marketing into communities, such as Spiceworks.  Many IT professionals from SMBs use such communities to exchange ideas, to learn about new offerings and ask questions to peers.  It is important to identify and establish presence in these communities - engaging participants, answering questions, working with customers and prospects, as well as running cost-effective marketing campaigns.

Another very effective way for generating high quality leads is creating unique and relevant content.  You can use it for blogs, IT community posts, social media, and PR.  In my experience, this has been one of the most cost-effective and sustainable sources of strong leads with very high conversion rates.

A lot has been said about the importance of PPC and SEO.  I usually like to experiment with PPC for SEO messaging before putting lots of effort into SEO.  This way I can get good results from a small PPC effort short-term, while SEO is gaining strength.  Once SEO is strong, I still keep a small budget for PPC for experimenting with new keywords, ideas and marketing messages.

Call center lead generation campaigns can work well for certain offerings.  However, to make these campaigns successful, there is typically a sizable upfront time and money investment - finding the right vendor, creating training materials and scripts, training agents, listening to calls and having an ongoing QA process.

One huge benefit of listening to lead generation and sales calls is the ability to witness your marketing and sales messages in action, see what works and what not, change as necessary and try again in real time.


Lead sorting and nurturing.  With thousands leads from different sources and at different stages of buying cycle, it is virtually impossible to keep up with all of them manually.  I have had success with designing a "funneling logic" for lead nurturing, where the leads get identified and categorized based on various factors and how far down are they in the sales funnel. Some types of leads get matured and closed using online tools (landing pages, content, emails, online store, chat, etc.) with minimal human interaction, saving sales lots of time.  Other types get passed to the sales team for closing.

I have been using Marketo for lead nurturing.  However, we quickly ran into the need to customize landing pages for further lead nurturing and "heating" to drive prospects closer to the purchase decision before handing them to the sales team.



Marketing and Sales Tools.  I try to have a minimal set of marketing collateral with an emphasis on online tools, especially for cloud-based services.  Many SMB IT folks don't have time to read through complicated materials.  They prefer seeing and experiencing the actual product.  Tools like screenshots and sandbox environments have been extremely useful for me, providing very high conversion rates.  I also use podcasts, brief videos, blogs, datasheets, customer testimonials, and industry press articles as necessary.

Patience.  With all these elements built properly, SMB sales can indeed be lucrative.  However, these efforts require a dedicated team that is experienced in marketing and selling into this space, willing to stay engaged and transform along with the industry.

It also may take some time to get the messaging and programs right, people trained, see what works and what not in your environment, before you can start seeing results.  However, the results can be great in terms of a strong revenue stream, high customer satisfaction rates and lower marketing costs.

8 Steps for Creating an Effective Main Message

 It's a familiar situation.  A company or division is formed.  It develops a product, then races to launch.  Somebody throws together an initial message and a web site.  Product launches.  Revenue starts flowing.

It's time to hire a marketing exec and build a team.  Founders emphasize leads and conversion rates.  Good things like SEO, lead nurturing, online marketing get implemented. But one fundamental is often missing.

Sin #1.  Positioning / Main message.  Let's look at the main message from two companies web sites:

-  Zoho

- Workday


Are these accurate and good in the eyes of these companies?  Probably.
Is this the way their customers think?                                      Probably not.
Do these miss a chance to communicate the true value?          Yes!

A strong main messages gives the best opportunity to grab prospect's attention... the right way. It also flows into the rest of messaging, impacting  PPC, SEO and the conversion rate.  In fact, vague main message  results in wasted money and ineffectiveness of marketing campaigns.  This is especially painful for startups with little brand recognition.

Here are examples of effective and clear messages from Pandora and AppAssure:







How do you develop a strong main message?  Here are some key principles:

1.  Grab attention.  It has to be unique enough to grab visitors attention and encourage further browsing.
2.  Differentiate.  Has to communicate at least one unique angle or a customer benefit.
3.  Specific. The benefit has to be specific.  Statements like having "all-in-one," "complete," "best" are often subjective and indicate vendor's point of view.  In the examples above, the word "complete" may have a very different meaning for target customers vs. the vendor.  It can discredit the message.  What I like about the message from AppAssure is that is specific.  "Recover in Minutes" sets a pretty specific expectation.
4.  Believable. It is important to keep the balance between reality and outrageous statements that prospects discount as zealous or exaggerated.
5.  Language.  The message has to be in the language used by target customers, which is often different from the vendor's language.  If your target customer is CIO, too technical of a message may be a mistake.  If you are targeting sysadmins, you may want to be fairly technical and specific.
6.  Easily understandable.  The prospect has to be able to quickly grasp the message.  Don't make them think too long - often people don't have time or desire to do that.  They will just leave the site.
7.  Customer tested.  It is critical to test the main message with a number of customers and prospects before going live.  You can start with a qualitative test via customer conversations.  Then, you can finish with an online survey.
8.  Not Perfect.  It doesn't have to be perfect.  You don't have to spend months on this.  It OK for some internal folks to struggle with it.  It can be work in progress, however you don't want to change it very often.  It just has to be effective.

To summarize, a strong main message could drastically increase the effectiveness of your marketing campaigns and ROI of your marketing spending.  I will discuss the sin #2 in the next Hack Marketing blog entry.

Here is an example of a message that we developed about 6 months ago: www.forgetsecurity.com

How To Generate Leads Without Pushing Products

My friend George owns a mega insurance brokerage, as well as a ridiculous number of apartment buildings in LA.  His success formula is very simple: "I never sell, I help people buy."

His agents are probably the most relaxed group of sales people I have ever met.  They never "close hard." Instead, they spend time understanding prospects' needs, then explain why certain plans would work better.  The conversion ratio is very high.  So is his referral business.  Below are my recommendations on applying this principle to online content strategy execution:

1.  Great Content.   Create relevant and interesting content that helps prospects understanding  and solving their challenges.  Brief, interesting articles / blog entries several times a week can help transforming your site into an industry "water cooler," where people can find news and practical information on their challenges and the ways to solve them.

2.  Content Mix.  Try to have a mix between industry news, industry "guest speaker" opinions / interviews, customer stories (not too product focused), industry event commentaries and "non-marketing articles".  This will provide a variety necessary for visitors to stay interested in keeping coming.

3.  "Non-marketing Articles".  Find a specific challenge that your market really cares about and your products help to solve.  Write about this challenge and best practices for solving it.  Then talk about the approach your company took to solving it and why.  This should be an "approach discussion," and not a product pitch.  Not mentioning the product name often is a good idea at this stage.  At the end of the article, you can provide a link to solutions and tools.  That link will lead to a landing page with product info and a call to action.  This way your article is credible, interesting, and actionable.  And it is not pushing products.

4.  Landing Page.  The landing page picks up the discussion and shows how your product or service solves this specific problem in details.  Later, you can add other features that you think the reader may find interesting.   Finish the page with a call to action, such as a free trial, purchasing options, etc.

5.  Promote The Content.  Since the article is fairly neutral and is not talking about products, you can promote it at industry communities, social media and forums, generating a lot of traffic to your web site that you can turn into leads, opportunities and sales.

To summarize, with this approach your prospects are learning more about their challenges, ways to solve them.  Once they decided on buying your product, they feel like they are making a purchase decision vs. somebody forcing them into buying something they may not need, understand or may not be ready to buy.  So, they are more enthusiastic and excited about their decisions and your products they are buying.

Is "Good Enough" marketing good enough?

The "good enough" concept is valid and important in many areas, including product management.  There is never a perfect product, so a good product manager knows when the product is "good enough" and ready.  This is based on many factors, such as customer feedback, quality, R&D reality, roadmaps, competitive data, etc.  This subject is taught  in Pragmatic Marketing and is widely used in most PM organizations today.

But does this principle work in other marketing areas?  Not in my experience.  For example, the difference between "good enough" and great for PPC and SEO is drastic.  Lots of PPC campaigns never work and exec teams stop believing in these as valid lead gen tools because marketing never puts the right level of effort on finding out what are the exact keywords their prospects use at different buying stages, from the research to purchase.  This is not an easy process.  And good enough usually = failure.  This is where you use "Hack Marketing" to find the right keywords.  The results of these extra steps are the difference between success and failure of PPC and SEO.

The same goes with the rest of messaging.  It really pays to conduct research and understand what are the exact words customers and prospects use.  There is no "good enough" here.  For example, we changed one word describing how the product category is referred based on customer feedback.  Lead gen campaign results shot up 67% in one week.

Finally, "good enough" marketing materials in my experience are useless.  I rather have a great web site with all the right messaging and use it as the major marketing tool instead of  tens of mediocre white papers just because it is "the right thing to do" and "everybody does it."

So is "good enough" marketing good enough?