January 05, 2009
Lead nurturing and scoring are among a marketer’s best tools during an economic downturn. Even marketers who already manage a quality nurturing and scoring program need to adapt for economic conditions.
We spoke with several experts to come up with seven tactics that can help you continue to find qualified prospects in tough times. They gave advice on:
o Measuring lead quality
o Developing analytics to target your strongest prospects
o Adapting content to attract highly qualified prospects
o Researching conditions in target industries.
Marketers’ budgets get pinched during a struggling economy. In fact, a recent MarketingSherpa survey found that 80% of marketers reported lengthening sales cycles as their prospects become more cautious about spending.
Therefore, more than ever, it is essential now to focus on sales-ready leads with a strong lead-nurturing program combined with a lead-scoring system. “In this economic time, the fact that anybody is doing nurturing is what’s most important,” says Joyce Rossi-Woodruff, Director of Marketing, Sybase. “It’s all about building relationships, and those relationships become all the more important when times are tough.”
Several experts gave us their advice on identifying best prospects and target industries and tweaking lead-scoring methodology to make the most of your nurturing efforts.
Top seven lead-scoring and nurturing tactics:
Tactic #1. Emphasize quality, not quantity in your lead database
The quality of the leads in your database is more important than the quantity, say lead nurturing experts.
“A bloated, poorly managed database is insidious. It gives you a false sense of security,” says Brandon Stamschror, COO and CFO, InTouch Inc. “It drives your costs up when you’re sending out emails and mailers, and you don’t know who they are going to [or] if your message is resonating.”
Marketers should look closely at techniques that emphasize the quality of the prospects responding to campaigns.
Here are some tips on getting relevant prospects:
Idea #1. Scrub your lists to find the most qualified prospects.
Paul Dunay, Global Director Integrated Marketing, BearingPoint, says his first response to the economic downturn was to create new rules for entering new prospects into his lead-nurturing system. Rather than automatically passing all new inquiries into the system, he created an “inclusion list” that targeted prospects from a list of the company’s strategically targeted accounts.
Working with the sales team, they identified target companies in specific industries based on company name, size, and expected revenue generated from a sale. New inquiries from this inclusion list were automatically entered into the team’s nurturing cycle.
New inquiries not from a targeted account were placed into a “holding tank.” A prospect in the tank could be analyzed to determine if it represented an account or an industry that had a sales representative assigned to it.
The question Dunay’s team asked: “Is there a sales person who has this name tattooed on their forehead and would be happy to receive this lead from marketing after it’s been through nurturing?”
Idea #2. Create new qualifying questions or online tools to segment inquiries.
Tweak your landing pages for products and services to prescreen inquiries based on targeted industries or potential deal size.
For example, a software company could create online system configurators that allow prospects to specify the size and complexity of a needed system. Or, you can test qualifying questions based on expected revenue or organization growth.
“You could probably draw a lot of data from those tools to build a predictive model that determines which companies are in good sectors and which aren’t,” says Andy Hasselwander, VP Analytics, MarketBridge.
But be cautious when adding fields or questions to your landing pages or registration forms. You could depress conversion rates if you ask too many questions or seek sensitive customer information.
Idea #3. Look beyond initial conversions to determine lead quality.
Look beyond basic conversion rates to determine the quality of the leads in your database. Stamschror recommends analyzing what actually happens to the leads you generate.
Important metrics to track:
o Conversion from lead to opportunity
o Cost per opportunity
o Cost per deal
Tactic #2. Create a behavioral model based on recent activity
Do you have a well-refined lead-scoring system? You may be able to adapt your scoring methodology to highlight prospects that appear financially stable and more likely to invest during a recession. There is no silver bullet for finding the companies in your database that are on solid financial footing. But database modeling can uncover trends that will give you directional data.
Hasselwander of MarketBridge says a marketing analytics team could use an algorithm that analyzes recent sales proposal activity to discover variables that help predict whether a deal is likely to close or fall apart. Tips:
- Start with a sample of recent sales proposal activity -- say, from the past three months. “Make sure you’re not making decisions on six months of data that could literally be wrong,” says Hasselwander.
- Establish a set of variables that may have had an impact on whether those deals closed:
o Company size
o Prospect’s job description
o Size of the buying committee
o Information from BANT criteria
o Type of sale, e.g., contract renewal or new purchase
- Use an algorithm to analyze whether conditions within each of those variables influenced the likelihood of a deal being closed.
- Base lead-scoring changes on trends uncovered through analysis. For example, if the model shows that proposals issued to companies in a certain geographic region were more likely to close, you can increase the score associated with prospects from those regions.
Tactic #3. Validate your hypotheses with third-party data
When analyzing trends in your customer database, validate them against broader, external data. The sample size in your database may be small or overly concentrated in a particular segment of the industry.
Additional data sources include:
- Broad economic data, such as the Federal Reserve Bank’s Beige Book. This analysis of current economic activity is published eight times a year, and highlights key factors for the 12 Federal Reserve Districts, such as:
o Consumer spending
o Business spending
o Banking and finance
o Prices and wages
The reports can highlight which industries are growing and which geographic regions are faring best during a downturn.
- Specific industry reports
If you have a large concentration of prospects in certain industries, such as health care or technology, look for third-party reports on the economic activity within those industries.
- Corporate credit information
Data sources, such as Dun & Bradstreet’s DNBi Risk Management Solutions, offer reports on individual companies’ financial positions and potential credit risks.
Use such data carefully, though. Businesses with lower credit ratings may still be growing. And Dunay says including that data in your prospect profile may distract members of your sales team.
“I don’t want my inside sales people to be swayed by [those reports],” he says. “If we’ve identified a company as strategic account, that’s all they need to know.”
Tactic #4. Emphasize recent activity in your lead scoring
The deterioration in credit markets and ongoing uncertainty about the health of the economy might not reflect a prospect’s current situation. Be wary of activity recorded in your database six or more months ago.
Dunay’s team has adapted their lead-scoring system to account for differences in activity based on time frame:
- Activity within the past three months, such as downloading a white paper or responding to emails about upcoming events, receives a higher score.
- The same activities that took place six months or a year ago receive lower scores if a prospect has not engaged in additional marketing activities since then. The technique allows them to focus their attention on prospects who have demonstrated strong interest in recent marketing campaigns.
- Maintain older leads in your database, however. Keep those lower-scoring prospects in the nurturing program until their activity level increases again.
In addition to that scoring change, Dunay’s team created a “fast track” for prospects that demonstrate a high level of activity in a short period of time.
Creating the “fast track” earlier this year grew out of activity from a prospect who received a white paper and generated 22 individual downloads in a matter of days. The team thought the prospect had forwarded the link to other members of the buying committee, which resulted in the additional downloads.
After a call from the inside sales team to learn more about the situation, that prospect moved quickly through the nurturing cycle and resulted in a deal for the company.
Here’s how they set up a system to flag that type of activity:
- The team wrote a new rule in their lead-management software to highlight prospects that generate a significant level of activity in a short period of time, such as downloading a specific white paper more than five times.
- Those leads are passed directly to the inside sales team for an immediate follow-up phone call to determine the reason for the burst of activity.
Tactic #5. Reassess value proposition for your core audiences
During an economic slowdown, marketers often fall into the trap of seeking out new “recession-proof” markets. A company may have no track record in those markets, however, having no experience dealing with those prospects’ business needs and no customer references.
“People are getting caught trying to do something brand new when what they should be doing is thinking along lines of refining their existing efforts,” says Brian Carroll, CEO, InTouch.
Instead of looking for new markets, spend time researching your value proposition with your existing customers. Make sure the messages you use with that audience still resonate.
The following advice comes from Carroll’s book, Lead Generation for the Complex Sale.
- Query your existing customers for honest information about current trends. Questions to ask:
o What external factors are affecting your business?
o How are those external factors affecting job roles?
o What are their anticipated needs and pain points?
- Also, ask why they chose to do business with you:
o How has your company helped their business?
o Can they quantify that value?
o What are the intangible benefits?
o What differentiates your company from competitors?
o How can we continue to serve you?
- Finally, ask how your products and services have helped the company:
o Have you helped them increase revenue?
o Lower costs?
o Improve profitability?
o Improve quality?
That research will help you determine if the value proposition in your marketing messages is right for the current economic conditions.
Tactic #6. Adapt content strategies to your lead-nurturing program
A steady approach to lead nurturing is essential at a time when sales cycles are lengthening. But you can adapt your content and campaign strategies to make the most of your investments.
Dunay’s team has shifted its online and in-person event strategy to target prospects who are farther along the nurturing cycle. Rather than using events to attract new prospects that might be unfamiliar with their company, they are creating events geared toward more highly qualified prospects or higher-ranking executives within prospect companies.
“I have noticed a remarkable increase in the quality of the people at these events,” says Dunay. “One recent event had C-level folks attending that I normally haven’t seen at these events.”
Rossi-Woodruff of Sybase has encouraged collaboration among different product marketing teams to get the most out of the dollars she spends on events. For an upcoming product launch road show, for instance, her team encouraged marketers from other product groups to invite their prospects to one of eight events being held nationwide. The tactic is boosting registration at events and giving other product marketing teams an opportunity to introduce their prospects to additional product lines.
They’ve also enlisted their telemarketing team to call all prospects who received an email invitation but didn’t open it or register. “If we see that registrations in Raleigh are light, after some telemarketing calling, well, Raleigh is doing well now,” says Rossi-Woodruff.
Tactic #7. Use telemarketing to get best insight into prospects’ needs
A good conversation between your telemarketing team and a prospect remains the best way to asses a company’s interest and ability to make investments going forward. Tips for the conversation:
- Use data from your lead-nurturing and lead-scoring systems to have relevant chats with your prospects.
- Continue to ask questions that will fulfill your BANT criteria, or otherwise indicate a prospect’s readiness to speak with a sales person.
- Based on your value-proposition research, ask questions that show you understand the industry challenges your prospects face. Introduce ideas for how your company can help them meet those challenges.
- Don’t ignore companies in industries you assume to be suffering right now. Even in beleaguered sectors, there will be strong companies who see opportunities for growth.
“What it comes down to is that, regardless of the economy, companies continually make decisions based on priorities,” says Carroll. “You want to find out what their current priorities are.”
Useful links related to this article:
Lead Scoring & Management Roundtable – 6 Experts Answer Sherpa's Top 10 Questions
Lead Nurturing Best Practices: New Data, Charts, Tips to Put More Punch in Your Cultivation Tactics
The Federal Reserve Bank’s Beige Book
Dunn & Bradstreet Inc.