What is a lead?

Marketing is often measured by counting the leads it creates. Many see this as a primary role of marketing – to feed the pipeline. The trouble is that it becomes an end in itself, rather than the means to a sale. So we count leads as the output of marketing – it follows that we classify anything we can as a lead, in order for it to count towards the total.

That’s basically why we use direct mail and other broadcast techniques in marketing. High volume outbound activities generate high volumes of inbound enquiries, which count as leads. Don’t they?

Such leads are often not much more than a name and phone number. They may be responses to a free offer or white paper, in which case they may not even be expressions of interest in you (just expressions of interest in your subject – not the same thing at all).

If you’re measuring marketing by counting leads it’s mandatory that you also measure leads-to-sales ratio. Together they measure the efficiency (number of leads) and the effectiveness (consequent sales) of marketing.

What typically then happens is that the number of leads diminishes, as you get better in passing on to sales those leads which have a higher likelihood of turning into revenue. You need to warn sales, and your senior management team, that this will happen, as otherwise they may hit the panic button. Recalibration of marketing measurement is required.

Marketing efficiency versus marketing effectiveness

How do you measure marketing?   

I think that marketing should be measured by sales. Whether you use incremental sales, or total sales, or marketing-budget-to-sales ratio, or sales velocity, or some other metric, it all comes down to sales. Market awareness or “propensity to purchase” and other such things are pointless if they don’t ultimately lead to sales.

The difficulty comes in tying specific campaigns to sales. How do you know if the event you ran caused someone to buy when they wouldn’t have otherwise? So most marketing organisations track overall operational effectiveness and/or efficiency.

Fair enough. But I was shown the following chart by a client. It plots IDC’s assessment of 99 firms on two scales: how efficient marketing is (vertical scale), and how effective it is (horizontal).

 

 

   

The chart comes from IDC’s CMO programme, Marketing Investment Planner 2008: Benchmarks and Key Performance Indicators, published in September 2007. (You have to subscribe to this service, which I recommend if you want to benchmark your marketing against peers, or purchase the report to see the whole document,).

What does this chart show us? The startling thing about this scatter diagram is the degree of scatter. It looks pretty much random. I’m guessing that if there is any correlation between effectiveness (how useful marketing is) and efficiency (how well marketing is performed) it’s tiny.

For example, the most efficient marketing operation faired no better in its effectiveness than many less efficient operations.

Put simply, how well you do marketing has little effect on how useful marketing is.

Ouch! What we have here is a case of measuring for measure’s sake. It’s a problem I’ve detected with the whole Marketing Performance Measurement (MPM) movement. It’s all very well measuring marketing, but does it actually help?

Focus on marketing effectiveness, measured in sales, and you won’t go far wrong. Efficiency can come later.

Spinfluencers

I’m directed by The Leading Edge to the Spinfluencer blog. “Spinfluencer” is a great name (wish I’d thought of it, damn you!), and it got me thinking about how the marketing industry (and PR in particular) is struggling to incorporate influencer strategies into their traditional kitbag of activities.

I think marketing has got an image problem. Sales people find marketing pointless or irrelevant most of the time. Customers are suspicious and mistrust what they’re being told. And proving RoI on marketing spend remains, for most, a “one day, maybe” aspiration.

I trust the irony of marketing’s dilemma is not lost…

So putting together our thoughts for the book, Nick and I wanted to distance ourselves from traditonal marketing. Influencer Marketing is all about making messages more believed (because they’re communicated by influencers, not by you). It’s about aligning marketing with sales. And it’s about demonstrating RoI, tangibly. Holistically, Influencer Marketing is about changing the way that organisations think about marketing.

One thing that holds this all together is the understanding that influencers are different. You can’t “pitch” to them – they’re way too smart for that. You can’t train them to say nice things about you – they’re not amenable. And you can’t pay them – because that undermines their influence and is thus counter-productive.

While the term “spinfluencer” is memorable it has, for me, all the wrong connotations. It implies traditional marketing, spin and fluff, and it reinforces the negative image of the industry. Any marketing or PR agency that wants to understand influencers should be moving away from this approach.

When I browsed the Spinfluencer blog I found it to be interesting, well-written and insightful. I recommend it. I just hope they don’t regret choosing the name.

Is this true for your organisation?

A key part of Influencer Marketing (hint: it should be part of all marketing) is the connection with sales. This is typically manifested in marketing collateral, and I’ve enforced the mantra at Influencer50 that Influencer Marketing should be, first and foremost, a sales enabler.

Marketing and sales and so often disconnected. But how bad is the divide? It turns out, very bad. Two figures emerged from a discussion I had with a team of sales consultants:

• 40% of a sales person’s time is spent developing their own marketing messages and collateral. Sales people don’t use the marketing department’s output.
• 90% of marketing collateral never gets used by sales.

Remember we’re talking about collateral that is designed (allegedly) to support sales. It’s criminal.

Does it happen in your organisation? How do you know? What can you do to improve marketing’s usefulness to the sales team?

We’ve recently introduced a new standard component to our client engagements, called a sales perception audit. We survey the sale team’s view of marketing effectiveness, and then survey it again after our client has implemented an Influencer Marketing programme. The idea is to prove that sales is getting something more from marketing than before.

It doesn’t (yet) measure actual sales uplift, but we’re hoping to demonstrate a correlation between happy sales people (with useful collateral) and sales performance. Sounds a reasonable hypothesis.

Influencer Marketing Primer 6 – Marketing with influencers

I’m really excited about this post, because it’s the one post I wanted to write all along. Marketing with influencers is the main event in the Influencer Marketing show – top billing. It’s where you see lead generation improve, conversion rates rise and sales increase.

There is a trick, though, that I need to let you in on. It is that you have to align 100% with the sales process, to the extent that your salesforce will be the most important source of input to your marketing efforts. It’s a trick because this should be true for all your marketing efforts, not just Influencer Marketing. But without input from sales, Influencer Marketing will never deliver the results you need.

So, the sequence of logic for marketing with influencers is this:

• Determine the reasons why prospect’s don’t buy from you. These reasons are called sales objections.
• Define a counter-argument for each sales objection.
• Map each counter-argument to an influencer, such that the counter-argument is (or could be) advocated by that influencer.
• Create influencer-led collateral that specifically addresses each objection.

Hey presto – you’ve got an answer to each sales objection, and it’s an answer which has substantial credibility (because it’s from an influencer, and not from you).

The key points of this process are:

1. You need to know why people don’t buy from you. The salesforce is the custodian of this information, so you need to tap this resource. Sometimes it’s easy – they just know. Other times thy don’t know, or they think it’s price (hint: it’s almost never price). In these cases, there are ways of eliciting the information, either from the salesforce or directly from the market.
2. Arguments against sales objections are credible only if communicated by someone independent. A counter-argument conveyed by you doesn’t work because “you would say that, wouldn’t you.” Influencers, by definition, are more credible.
3. Counter-arguments are specific to the objection. In other words, the counter argument “Gartner says we’re a top-right player in its Magic Quadrant” works only if applied to the objection “We don’t think you’re a major player” but not if the objection is “We don’t perceive a need for your product.” This may seem obvious, but you’d be surprised how often an objection is countered by an irrelevant response.

The power of the approach is that it directly links influencers to sales objections, arming the salesforce with specific collateral. If you get it right, the inevitable consequence is better leads, improved conversion rates and higher sales.

Now, I can hear you scream “If it’s that easy, why is it not done this way now?” Good question, two good answers:

Firstly, sales and marketing typically don’t talk to each other. Read Philip Kotler’s article “Ending the war between sales and marketing” in the Harvard Business Review for insight into why this situation exists.

Secondly, it only works if you use influencers to counter sales objections. And most firms don’t know who their influencers are.

One final thing: it’s possible to create influencer-led collateral that doesn’t tie into specific sales objections, but adds to the generic marketing mix of “stuff.” This is okay as far as it goes, and in fact it’s where we started when we first put our SFERE process together. But the approach is far more effective when aligned with sales objections, so I strongly recommend you take this extra step.