To maintain pace in a modern B2B marketing environment, it has become crucial to think in terms of a full revenue cycle, from initial awareness to sales closed, instead of simply in terms of a sales cycle. The full revenue cycle requires both sales & marketing departments working together towards the same revenue goals.
McKinsey & Company recommends in a February 2015 article that B2B sales organizations need to reshape by forming partnerships with marketing at each stage of the customer decision journey. Marketers can then generate leads more effectively when they align their strategy with sales. In a full revenue cycle, taking into account both marketing and sales stages, the marketing activities and communications can be adjusted for Top of the Funnel (TOFU), Middle of the Funnel (MOFU) and Bottom of the Funnel (BOFU) leads.
As published in the 2013 Sales and Marketing Alignment Study by the Math Marketing:
Proper alignment makes businesses 67% better at closing deals and extracts 208% more value from marketing.
The key to sales and marketing alignment is a well-defined lifecycle model, open communication between the two teams and technology integration (Figure 1).
The Full Revenue Cycle Model
Marketo’s Revenue Cycle Modeler (RCM) tool defines, creates and analyzes the full cycle, allowing both marketing and sales teams to align their processes and activities. The RCM tool is available in Standard, Select or Enterprise editions. Contact your Marketo Account Manager for more information on availability in your system or the steps required for activation.
Modeling the full lifecycle of a lead from an anonymous website visitor to a won deal is a fantastic exercise between marketing and sales leaders (Figure 2) . This allows both sides to understand each other’s processes in order to work together towards the same goal.
The Success Path
The Success Path Analyzer report in Marketo shows users how fast leads are moving through various stages of the full revenue cycle. Leads start as anonymous website visitors and flow through the path until the deal is closed and business is won.
Transition rules are the arrows in the model. For example, leads can move through the buckets automatically or when sales reps manually change their status. When leads are engaged enough and generate a sufficient high lead score, they can automatically be handed off to sales. If the sales rep considers that the lead is “ready to buy”, they open opportunities thus moving the lead further along the success path.
Detours are the buckets outside the success path. For example, leads could be either continuously nurtured if they are not yet ready to buy, marked as unqualified or tracked as lost opportunities which may later resurface.
Open communication and working within a feedback loop are considered crucial activities in order for the sales and marketing departments to work together effectively. This must be a continuous follow-up and review process.
The first step in any effective communication is for both sides to speak the same language. Different teams within the organization can sometimes refer to leads in different ways. For example words such as “prospects”, “suspects” or “sales leads” are often used interchangeably, which can easily lead to confusion. Both sales and marketing must agree on a consistent vocabulary and clear definitions.
What makes a lead a lead? This is one of the first questions marketers need to ask. Clearly defining the characteristics of a good lead vs. a bad lead is important in order for marketers to focus their demand generation activities. Surprisingly, sales and marketing are often not on the same page. Leaders of each department must come together to clearly define the ideal lead profile. The characteristics of the ideal lead can be determined by Demographic (also referred to as Firmographic) and Behavioral characteristics.
Demographic Criteria Example:
- Job Title
- Company Size
Behavioral Criteria Example:
- Visited the pricing page
- Requested a demo
- Participated in a very focused webinar
When is a lead ready? Defining a “Sales Ready” lead is important in order to distinguish between engaged leads in your database and those ready to be contacted by sales. It would also be a waste of time for sales to contact every name in the database. The leads need to show significant engagement and buying signs. For example, leads need to be handed off to sales from marketing when they reached a certain lead score threshold or when they raise their hand explicitly requesting to be engaged. The leaders of each department must define what this lead score threshold is and what the explicit buying signs are.
What does Sales do with the leads? Marketing must have visibility not only into sales reports but also into sales processes, opportunity stages and service level agreements (SLAs). The more you can understand about how your products and services are being sold, the better you can fine-tune the entire demand generation mechanism.
Understanding what marketing can provide and how sales operate has to be clearly defined and established by the two parties. Working within a feedback loop leads to successful sales and marketing alignment.
The sales department lives in their customer relationship management (CRM) system (ie. Salesforce or Microsoft Dynamics CRM) while marketing departments work with powerful tools such as Marketo plugged directly into their CRM. Due to strong bi-directional integration of Marketo with CRM, both sides are in fact looking at the same data nexus.
Looking at the same data and integrated system leads to several advantages:
- Marketers can generate demand and score leads to automatically populate the dashboards used by sales on a daily basis.
- Marketing is able target relevant content and messages to leads depending on their stage in the buying cycle
- Sales are able to return leads to marketing that are not yet ready to buy. Nurture campaigns can then be automatically triggered.
- The entire buyers’ journey can be mapped from initial contact to closed opportunities.
- Sales reps are able to see all the marketing interactions of a lead directly within CRM before picking up the phone to make the call. This will allow them to better understand the needs of the lead and best prepare for the right conversation.
Strong sales and marketing alignment can be very rewarding for the whole organization. Tools like the Revenue Cycle Modeler from Marketo bring together both departments to work collaboratively on a complete lifecycle from initial awareness to closed sales. The alignment can be achieved through open communication and feedback loops between the teams. The Marketo marketing technology integrated within your CRM system allows both teams to share information and to empower each other.