Chances are that you’ve heard of the term “lead nurturing” and are even using it – to some degree – within your marketing and sales strategy. Lead nurturing is supremely valuable to ensure long-term leads and qualified prospects do not fall into a black hole between marketing and sales.
Whether you are campaigning to gain budget approval to implement your nurturing strategy, need to illustrate ROI for an existing nurturing program or you are just trying to evaluate your current tactics, effective measurement of your nurturing program is critical. Outlined below are five steps to measure your nurturing initiative and start being viewed as a profit center, rather than a cost center.
Step #1: The first step in measuring your nurturing strategy is clearly defining the criteria required for a lead to be considered “sales-ready”, and thus handed off to the sales team for closure. The mistake that many marketers make is defining the criteria for this classification without input and buy-in from the sales department. However, defining the criteria is a responsibility of both marketing and sales managers. In determining the criteria, consider the length of your sales cycle, as well as the steps within the sales process. This approach will help determine when a prospect needs to move from a nurturing representative to a sales executive. Minimum criteria should include a planned and defined project, timeframe, budget and willingness to consider your solution. As part of your measurement, establish and report on the lead rate for the program. For companies with a complex and lengthy sales cycle, 10-15% of your nurturing conversations should result in a “sale-ready” lead.
Step #2: In addition to “sales-ready”, create two categories for your prospects in order to measure and monitor your prospect movement within your nurturing funnel:
- Passive Prospects are those who are qualified to buy your products/services but do not currently have a defined need.
- Active Prospects are those who are qualified and have a potential and/or defined need, but do not yet meet the criteria of a “sale-ready” lead.
The goal of your nurturing strategy is to move prospects from “passive” to “active” to “sales-ready”. You can measure and report the positive movement rate of your nurturing funnel, which typically should be 20%-30% of your prospect conversations.
Step #3: Every touch is not created equally. Therefore, it’s advisable to develop a scoring system where a numeric value is assigned to each type of touch (conversation, strategic voice mail, email, mailed fulfillment, etc).
In creating your scoring system, two things should be taken into consideration. First, is the expense of the touch. For instance, a one-on-one conversation is typically the most expensive touch, and thus receives the highest score. Conversely, a text email is less expensive, and receives a lower score. Second, the impact of the touch can be taken into consideration. Although expensive, a one-on-one conversation provides the most impact as information is being given and received at the same time. On the other hand, text emails are only read approximately 40-60% of the time with a small number resulting in immediate 2-way communication. Using this example, your scoring system can include applying a numeric value of “4” to every conversation and “2” to every email, which accounts for the difference in both the expense and the impact of the two types of touches.
By placing a simple score on each touch, you can start to monitor the average score required to nurture a “sale-ready” lead. Once that is developed, which takes approximately 6 to 9 months, you can begin to make educated decisions about the touch strategy.
Step #4: Placing a prospect into the nurturing process, does not mean it should remain there indefinitely. If you create a scoring system, as described above, you can also evaluate when a prospect reaches a point of diminishing returns. For instance, you may determine that the average score to create a sales-ready lead is 35 points. Use this intelligence to review prospects who are in your nurturing system; those that have a very high score (example: 80 or 90 points) can be either removed from the nurturing system or flagged to only receive lower cost communication, such as email.
Additionally, you should monitor your team’s ability to reach the prospects and begin a nurturing dialogue. For instance, those prospects that have received 10 to 12 attempts over several weeks and have not been successfully reached to begin dialogue should be evaluated for removal.
Keeping your nurturing activities focused on the most suitable prospects will help to ensure the success of your program.
Step #5: After passing a “sales-ready” lead to your sales team, you will begin tracking your leads and receiving feedback from your sales team. You may find that employing a closed-loop lead administrator to monitor a CRM system is more reliable than the sporadic data entry of your sales reps. The lead administrator‘s role is to monitor the CRM system and to follow-up with your sales representatives via phone and email to gather key information such as pipeline, forecast and closure data, as well as qualitative feedback on the quality and type of leads provided. This process is highly effective in receiving and documenting ROI stats and ensuring your nurturing program continues to receive the necessary funding.
Being able to monitor your nurturing funnel, focus on the most suitable prospects, understand and report results, and capture true ROI data are essential for gaining and keeping your executive sponsorship. Most importantly, by utilizing the steps outlined above, you will be well on your way to positioning your nurturing activities as a profit center.