This is the first of six Best Practice Articles on Demand Generation. They will explain the methodology and huge potential benefits of Demand Generation for your company, compared with lead-generation-only campaigns.
This first, introductory, article will also provide you with worrying statistics on the huge amount of leads and marketing budget that most businesses are wasting, along with new ideas on how you can easily improve your own lead generation programmes.
In addition, you can use this article as a checklist to see where your lead generation methodologies may fall down and where you can pick up the knowledge you need to implement a step-change in your own company’s lead generation programmes.
But even more importantly, it will help you achieve more qualified leads, more sales and more profits for your business.
Some startling statistics
THE TOP-THREE BOARD-LEVEL MARKETING ISSUES
According to the IDC report ‘Tech Marketing Benchmarks and staffing’, these are the top-three marketing issues regarded as most important at board-level:
To provide consistent ROI measurement
To measure and increase brand awareness and reputation
To measure and increase qualified lead generation results
Most lead-generation-only programmes fail to meet points 1 & 3.
Seven startling lead generation statistics
Generating a high return-on-investment from the marketing budget is vital but the following statistics are, on the one hand, alarming (you could be wasting a massive 69% of your lead generation budget) but, on the other, they present you with a golden opportunity as 67% of future orders are ignored by your competitors…
(Source of the statistics: Aberdeen Group, Gartner Group, B2B Magazine, Chilton, Reed Elsevier, and Cahners).
Only 10% of all leads are followed up correctly – 90% of sales leads are not followed up in a timely way; not treated seriously or are even ignored.
A huge 69% of all leads get no follow-up at all – sales people are busy trying to close orders and they quickly lose interest in large batches of new enquiries.
Only 13% of leads are time-wasters – 87% of sales leads result in a sale for one company or another, even if it does take up to two years! To put it another way, almost 9 out of every 10 enquiries will eventually result in an order.
Only 20% of all leads turn into an order within six months – only a small proportion of leads turn out to be short-term, ‘quick orders’.
A huge 67% of all leads take over 12 months to turn into an order – sales people simply don’t have time to take this into account – it’s not their fault – they’re paid to be working on the next short-term order.
A very low 22% of all companies have a lead nurturing programme – very few companies realise the importance of these statistics, and the result is that the 67% of all opportunities (see above paragraph) are mostly neglected.
Because of a lack of follow-up and almost no ‘lead nurturing’ over an extended period of time, the eventual decision on which company gets the order is often taken almost at random.
If the prospects haven’t been regularly contacted, then your company probably won’t even be asked to quote a year later – the original proposal may well have been lost.
Or even worse, a new contact may have replaced the original one and your sales people won’t even know!
On average, seven 'touchpoints' are required to nurture a prospect – every prospect needs to be gradually nurtured to the point of placing an order, and on average, this takes seven ‘touchpoints’ e.g. telephone calls, eMails, site visits, letters, etc.
It’s not essential that all seven touchpoints are face-to-face meetings; the important thing is that the nurturing process consists of regular, multiple communications.
So, what do these statistics mean in practice…
What these statistics mean
A wasted marketing budget or a golden opportunity!
The bad news is that through no fault of their own, your sales people are probably not following up the majority of new sales enquiries effectively and the absence of a lead nurturing programme means that two thirds of your leads are wasted – you have no ‘lead pipeline’ for the future.
It’s the joint responsibility of sales and marketing to generate new sales leads but the marketing department is best-placed to carry out Demand Generation programmes.
This lack of nurturing of sales enquiries can result in missed revenue targets; wasted budget; an ineffective sales force; and a distrust between marketing and sales.
However, the good news is that two thirds of your enquiries are also being neglected by your competitors…
Here is a typical scenario: most companies spend their entire lead generation budget on short-term lead generation only, with no thought to nurturing leads medium- to long-term.
The sales force typically follows up only one third of the unqualified leads they are given, with probably only 10% of the total number being followed-up effectively.
Because only 20% of these leads turn into orders within six months, the sales people often have a poor regard for enquiries generated by their own marketing department.
They simply don’t realise that TWO THIRDS of those very same leads will eventually turn into orders. Or if they do realise this fact, they don’t have the time to implement a one-to-one, personal nurturing process that may last anything up to two years.
The consequence of this short-term attitude is that the marketing department then tries to generate more new leads which they hope will turn into orders in the short term.
But only 20% of those new leads will produce short-term orders!
This is a very expensive way of generating new business and very ineffective as the competition will be doing exactly the same thing in trying to chase leads which will turn into short-term orders.
The competitive pressure on those few leads that everyone is chasing will be enormous.
There is more cost-effective way: Demand Generation!
Fact: "A huge 67% of all leads take over 12 months to turn into an order"
"The following statistics are on the one hand alarming (you could be wasting a massive 69% of your lead generation budget) but, on the other, they present a golden opportunity, as 67% of future orders are ignored by your competitors…"
Fact: Only 10% of all leads are followed up correctly, and a very low 22% of all companies have a lead nurturing programme
Fact: Only 13% of leads are time-wasters and a huge 67% of all leads take over 12 months to turn into an order
"The good news is that two thirds of your enquiries are being neglected by your competitors…"