How Unqualified Leads Bog Down Sales Pipelines for Industrial Companies

I have yet to come across a manufacturer, a distributor or an engineering firm that didn’t ask for more leads. No surprise there!

The more I probe, the clearer it becomes what they really want are more requests for quotes or proposals. This is understandable since the sales pipeline needs to be full and active at all times because of the long sales cycles that’s typical for industrial companies.

However, this singular focus is causing a lot of frustrations because not enough leads generated by marketing are converting into sales opportunities. If you haven’t already heard or read about this problem, here are two stats that will make you sit up and think.

  • 79% of marketing leads never convert into sales. Lack of lead nurturing is the common cause of this poor performance. (Source: MarketingSherpa)
  • 61% of B2B marketers send all leads directly to Sales; however, only 27% of those leads will be qualified. (Source: MarketingSherpa)

I can cite many reasons for this disconnect. Based on my experience as an industrial marketing consultant working with clients, the root of the problem is the lack of understanding and/or spending enough time to understand the differences between Marketing Qualified Leads (MQLs), Sales Accepted Leads (SALs) and Sales Qualified Leads (SQLs). As a result, Sales continues to blame Marketing for generating “crappy” leads that never turn into sales.

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Better Industrial Marketing Doesn’t Mean More Technology

Marketing Automation vendors have done a great job of spreading the message about the benefits of technology in marketing. Industrial companies are paying attention. I’ve been asked several times about using Marketing Automation (MA) in industrial marketing. I should be excited and jumping up and down with joy, right? Not so fast! Why do I say that?

Unless you get your marketing house in order first, technology alone isn’t going to solve all your industrial lead generation problems. A popular quote by Bill Gates sums it up nicely. He said, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

How Marketing Automation Works

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Take Industrial Lead Generation up a Notch with Marketing Automation

Marketing automation technology is one of the areas where B2B marketers will increase spending in 2014 according to an article I read in the September 16 issue of BtoB Magazine. There are many more choices available today in Marketing Automation (MA) offerings and one can find the right fit at various price points. This post is not a product review or a comparison of different marketing automation packages. You’ll find plenty of such articles online written by vendors and independent marketing consultants. You can visit sites of different MA vendors and get the laundry list of all the features they offer.

I’ll stick to my area of expertise – industrial marketing and the use of MA in this specific niche. I have used HubSpot for about four years for two different clients and am now using Pardot for another manufacturer. I want to zero in on two key benefits of using MA for improving industrial lead generation and conversions.

  1. Prospect Profiling
  2. ROI Measurement and Reporting

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Marketing Automation Alone Can’t Deliver ROI for Industrial Companies

Let me start by saying that I’m a big believer of Marketing Automation (MA) and have seen it produce incredible marketing ROI for some manufacturers and industrial companies.

Then why does the headline of this post make me sound like a skeptic? That’s because it’s a case of good news, bad news.

First, the good news, MA does make the entire process of converting Marketing Qualified Leads (MQL) into Sales Qualified Leads (SQL) very efficient and measurable. It produces amazing results when implemented and managed correctly.

This infographic from Pardot (A SalesForce Company) shows the real results automation users are seeing, descriptions of how automation is transforming companies, and staggering growth statistics.

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What You Ought to Know About Inbound Marketing

Confused about Inbound Marketing? Never heard of it? View this hilarious and entertaining video from HubSpot and it will tell you everything you ought to know about inbound marketing.

[youtube width=”480″ height=”360″]http://www.youtube.com/watch?v=4-lGe5MnBlY[/youtube]

In the past I’ve written about manufacturers such as Indium Corporation and Miller Electric Manufacturing Co. and their success stories of inbound marketing with content. However, overall adoption rate of Inbound Marketing and Marketing Automation (MA) is still low among smaller manufacturers and industrial companies. This is slowly changing and I am finding many of these companies are now more willing to listen to me talk about it.

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SAL is the Glue that Binds Sales and Marketing in Lead Generation

A lead is a lead, right? Depends – are you in marketing or in sales?

SAL – Sales Accepted Leads is the bridge between Marketing Qualified Leads (MQL) and Sales Qualified Leads (SQL).

No, I am not splitting hairs nor am I indulging in semantics. Clearly defining and understanding the implications of MQL, SAL and SQL are critical to the success of B2B lead generation.

Assigning a numeric score to business sales leads based on a predefined set of rules, takes away the subjectivity out of qualitative ranking like Hot, Warm and Cold leads. Quantitative lead definitions reduce the friction between sales and marketing.

B2B marketers are being held a lot more accountable (as they should be) for their contributions to a company’s revenues. This is more so for industrial marketers because generating a steady stream of high-quality sales leads plays a far more important role than other B2B marketing objectives such as branding, thought leadership and/or community building.

These days, respect for B2B and industrial marketing is spelled as M E T R I C S.

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10 Helpful B2B Lead Scoring Resources

I wrote this post because Chris, a regular reader of this blog, emailed me recently with a question on B2B lead scoring. First of all, thanks Chris for taking the time to read my posts and emailing me.

His question – “Could you briefly describe the tools/process you use to ‘score’ sales leads?”

Great question! Lead scoring is a key component of marketing automation and a very effective tool for aligning sales and marketing. However, it is not an easy one to answer in a quick blog post.

Instead, I’ll give you my “Go-To” list of online resources from marketing automation software companies.

I hope you find these resources helpful. (Note: Some of them do require you to register before downloading).

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Marketing Automation vs. Inbound Marketing

If you believe everything you read (and lately there’s been a lot) about marketing automation, you’d think it is the killer app to solve all your lead generation problems.

Then there are scores of B2B marketers who swear by inbound marketing as the path to lead generation nirvana.

How do you separate hype from reality, especially when it comes to industrial marketing? Are we comparing apples to oranges when we talk about marketing automation versus inbound marketing?

Let’s take a closer look at both.

How manufacturers are marketing today

“Quality of leads delivered” was considered as most important by 464 respondents from the manufacturing sector as reported in Trends in Industrial Marketing 2010 released by GlobalSpec. It scored 8.6 on a scale of one to ten. This was way ahead of quantity of leads and number of click-throughs to a company’s Web site. Read more

Variety of Content is the Key in the Early Stages of the Industrial Buy Cycle

In the early stages of the industrial buy cycle, you as the marketer have very little information about the visitor to help you tailor your marketing content to their needs.

In Needs Awareness and Research phases, the first two stages of the industrial buy cycle (see my earlier post Deconstructing the Four Stages of the Industrial Buy Cycle) your prospects and customers use a variety of online content to find solutions to their current problems and needs.

The chart below shows the variety of content used at different stages of the industrial buy cycle (Source: Understanding the Industrial Buy Cycle: How to Align Your Marketing with Your Customers’ Buying Process from GlobalSpec).

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Don’t Count on Marketing Automation to Solve All Your Lead Generation Problems

Some B2B marketers tend to think of Marketing Automation as the silver bullet that will solve their lead generation crisis. Of course, Marketing Automation alone cannot live up to those hyped up expectations and has to take the brunt of the blame.

That is unfortunate because Marketing Automation software is a very useful tool and in my opinion, a necessity these days. However, B2B and/or industrial marketers must learn to use it correctly in order to harness its true power.

Let’s get one thing straight from the get go, if you are in a declining market with low demand for your products and services, no amount of automation will help you generate new leads. You need to rethink your business model first and fast.

Marketing Automation software is widely used to execute key marketing functions like lead scoring and routing, nurturing via drip marketing, creating email campaigns and landing pages, tracking, measuring and reporting using a unified dashboard. There’s is no question that marketing departments do become a lot more efficient by automating many of these marketing tasks.

However, is improving efficiency enough to justify investing in Marketing Automation? Or do we need to show a verifiable ROI? To most C-level execs that really means answering the question, “How much revenue did it generate?” It is the second question that seems to cause the most problems. Read more