Sales Handoff and the Net Quality Score

One of the most controversial and challenging areas of any revenue engine is the hand-off process from marketing to sales. It is this transition that bears the brunt of all the inter-organizational process differences, motivation differences, and politics. This makes it a vital area to focus on in building the benchmarks and dashboards that will help optimize overall performance.

The nurturing and discovery of qualified leads, while vitally important, is of limited value unless the hand-off to sales is efficient and optimized. As this aspect of the process involves a significant behavioral element in the managing of sales team engagement with the lead flow process, it can be the source of many easily remedied revenue engine challenges.

The first aspect of understanding this element of the process is to understand the volume and quality of leads flowing to each territory. Volume is, of course, a simple metric to dashboard, and volume differences by territory can be quickly identified.

Quality, however, is often a more important indicator of eventual success. While MQLs may be defined as any lead that falls into a fit and engagement profile that defines it as an A1, A2, or B1, this does not mean that all MQLs are equal. Understanding the quality of leads passed to each territory is vital in ascertaining whether any revenue challenges being seen are a result of poor team performance or poor lead quality.

Most useful in this is a metric called the Net Quality Score that indicates the overall balance of high and low quality leads being sent to each rep or territory. To calculate the Net Quality Score, first split leads into high (eg A1s), medium (eg A2s), and low (eg B1s and B2s) categories. The Net Quality score is the number of high quality leads minus the number of low quality leads, divided by the total number of leads. Scores can range from -100% to +100%, and higher scores indicate a higher average lead quality.

This quality score can quickly pinpoint issues, for example in the following dashboard, it can be seen that while the Central region is receiving a large number of leads, they are generally of very low quality. This may result in sales team effectiveness that is much lower than expected without being the fault of the sales team in terms of performance.



What Happens After the Handoff?

With this understanding of which territories, product lines, and salespeople are provided with leads, and of what average quality, the next step is to provide insight into the outcome of those leads. Done properly, the disposition of leads by a sales team after they attempt to connect with them should not only trigger a marketing process to correctly handle the leads, but also provide clear insights into the whether any fine tuning of the qualification process may be required. If the leads were unreachable, lacked interest, were not the right role, or only had early stage interest, this insight allows marketing to see whether there are potential quality issues with their leads.

Likewise, if certain sales reps are doing a poor job in following up with the leads they are given, this will also show up in the analytics of lead disposition when a MQL to SQO conversion ratio is calculated for each sales person. In the following lead disposition chart, for example, you can see that Bob, Andy and Jane received a large number of leads, but failed to convert many of them to opportunities, instead marking them as unable to connect. Worth noting, however, is that the net number of opportunities created remains on par with the team as the poor conversion rate was masked by the high volume of leads.

This may be an indication of a performance or training challenge with these sales reps, or it could be that the volume of leads was so high that they were unable to truly dedicate sufficient effort to each lead.



Looking at a Difficult Problem

How are you analyzing and optimizing your handoff process from marketing to sales? Just delivering leads is not enough, if you're not able to ensure quantity, quality, and follow-up, you may be leaving money on the table.

How a 99¢ iTunes Download Can Change the B2B Software Industry

(this post originally appeared on the "It's All About Revenue" blog)

With the popularity of iPhone apps, common software price points have dropped from $39.99–$59.99 to $0.99–$1.49. This trend currently dominates the consumer market, but as a B2B software marketer, you should take notice.

GigaOM Pro recently forecasted that the market for apps is expected to grow from $183 million in 2010 to $8 billion by 2015. This means consumers will get used to paying low prices for the latest technology and this may change their expectations of how they acquire business software.

Why Does the 99¢ Software Trend Exist?

Over the past decade, the cost of producing and selling software has plummeted. Many of the up-front expenses have been minimized as new libraries and development tools make it easier for you to put software on the market.

In addition:

• You don’t need a major investment in a sales and accounting team to sell 99¢ software. Developers who use the old digital distribution model need to arrange for credit card processing, set up a bank agreement, handle billing and collect outstanding payments. Delivering your products through full service models like the App Store removes much of this backend work. In exchange for a 30% commission, Apple will take care of your credit card transactions and provide a platform where you can focus solely on your product.

• Selling through the App Store removes the need for credibility. You’d normally have to spend lots of time and resources to build trust with customers so they would feel comfortable giving you their credit card numbers. However, distributing though a respected entity, such as the App Store, eliminates trust-related hesitations. iTunes customers aren’t required to give out their credit card numbers with every purchase. They simply open an iTunes account and don’t have to worry about fraudulent bank charges from unknown developers.

You also must submit a software development kit to Apple for approval. Apple will run performance tests to ensure their customers receive software that does what it promises across a variety of platforms.

• Marketing costs are minimized. The low costs associated with promoting 99¢ software can make testing this distribution model attractive. Research has shown that the best way to sell apps is by word of mouth. Reviews on popular blogs and YouTube can drive sales and give you plenty of free publicity. The bigger the buzz, the more units you will sell.

• Huge distribution networks make it profitable to lower your price points. Selling your product through major distribution networks like the App Store lets you reach a new audience and gain brand recognition. Even though you may need to price your app at less than $1.99 to be competitive, the increased number of downloads can make it worthwhile.

faberNovel recently conducted a study to determine the best practices for iPhone app marketing. They tested several prices for the Paris public transport (RATP) app. When they lowered the price to 0,79€ (approximately 99¢), their sales tripled and 50% of their new customers went on to purchase the full version.

• The sales model allows for discovery through free trials. Offering users a free version of your software is critical to attracting new customers and driving sales of the full version. Free versions are far more likely to rise to the top of the “Most Downloaded” lists, giving you, and your paid version, significantly higher exposure.

This trend, of course, goes far beyond Apple, although theirs is the most widely recognized model. Google also acknowledged the importance of 99¢ software in today’s market by adding an apps search to Google Search for mobile. This function not only makes it easy for people to find apps but also gives software developers another reason to seriously consider this trend.

Should You Sell Your Software for 99¢?

As a B2B software marketer, this is a major trend that you need to be aware of. In all likelihood, you may conclude that it doesn’t make sense to sell your software for 99¢ directly, but in analyzing your market space, this trend changes the overall landscape directly. You should be aware that your competitors, and new market entrants, may take advantage of this new landscape. Whether or not you have considered a 99¢ distribution model, you should think about the following three factors:

• Disruption: It may not make sense for you to offer software at 99¢, but for a new entrant with significantly lower overhead costs because of this trend, it may make sense. Could a new competitor disrupt your space with a 99¢ offering? Have you thought about what could happen to your market space and how you’re prepared to compete? Can you produce a quality competitive offering with minimal investment?

• Business Model Creativity: When CD sales started to decline, iTunes revolutionized the music industry by selling songs at 99¢, but in doing so creatively changed the offering to include the music, the player, and the software to manage it. To compete in today’s app market, you might also need a more creative business model. Pull your team together to brainstorm new ways you can deliver a “unit of value” to your customers. Should you sell your software in the same way as you are today, or should you change what you sell, and to whom, to create a new business model?

• Go to Market: Your software might currently appeal to a small audience, such as a buying committee or senior executive, to maximize your ability to sell large deals. However, smaller apps that perform well and generate the most word of mouth tend to attract a much broader range of users. Can you approach your market differently by developing an offering that targets a broad population of end users, rather than a narrow population of executive buyers?

If you’re wondering how this model has affected sales of a fully featured software product, read the results of The Great 99 Cent Software Experiment of 2010. For 24 hours, Bill Pytlovany sold lifetime memberships to the WinPatrol PLUS system protection utility for 99¢. The regular price was $29.95. Sales during the promo were phenomenal, which made the experiment a success from a financial standpoint. In fact, most of the challenges he faced – high credit card processing fees, pirates and extra work handling orders – would have been resolved if he had used more current sales methods and sold the software through an online transaction system such as the App Store.

What about you? Have you analyzed your business and considered what would happen to your market space if a competitor used today’s tools to reinvent your category around a 99¢ price point? Are you prepared?

Marketing Dashboard: Passive Discovery

We spoke recently about various ways of looking at marketing benchmarks and how to better dashboard and analyze the entire revenue performance management process. This thinking needs to be applied to all areas of the revenue engine, and each has its own unique challenges.

At the earliest stages of the funnel, where buyers first begin to become aware of your company and its solutions is perhaps the most challenging. One of the main ways in which people discover your message, of course, is coming across your messages "passively", through ads, content, and social media sharing.

Building an understanding of how your messages are being passively discovered is an interesting challenge. Many of the paid techniques of passive discovery, such as banner advertising, are inherently trackable. However, great content that allows an organization to earn passive discovery is often much less trackable. However, a clear understanding of this element of the revenue process is key to determining where to make important investments.

An important metric to start with is an understanding of paid vs earned awareness. This dashboard metric gives you a clear sense of whether prospective buyers in the early stages of their education process are learning about you through paid efforts, such as advertisements, or through your efforts to earn their attention, such as through content marketing. To create this view, chart the traffic to your website by its originating source. Those that arrive from content sites, or without the tracking codes that you place in your online advertisements are most likely earned discovery through your content marketing efforts. Those that arrive with the tracking codes of your online advertising efforts are paid discovery efforts bearing fruit.

In charting these two sources of awareness, all active discovery, such as referrals from search sites such as Google and Bing, and all natural traffic (visitors who just typed in your website’s address, and were not referred to it), must first be removed. Other sources of traffic, such as from a customer community, or online help portal should also be excluded, as these are individuals who are already aware of who you are and what your solutions are. With these categories of traffic removed, this leaves just the visitors who discover your content, and hence become aware of your solutions, through either paid or earned awareness efforts.

This view is instructive in two ways. First, a direct comparison of your paid and earned efforts provides insights into whether opportunities might exist that are not being maximally exploited. If you notice that prospects discovery of your solutions is mainly from paid sources, there is an opportunity to assess whether content marketing efforts may provide a more economically efficient way to drive awareness. If, however, all of your discovery traffic is coming from earned sources, there may be a chance to either re-evaluate whether your current paid awareness efforts could be better targeted, or, if there is an opportunity to increase your paid awareness efforts in order to generate awareness in areas of the market in which you are not currently driving as much awareness as you could be.

The second area of value you get from creating and maintaining this view of your revenue engine is that you can understand how your efforts are resulting in more awareness over time. This is most crucial for earned media, as this follows a “fly-wheel” dynamic for growth. Effort this is invested in creating and promoting great content results in a slow and steady growth in awareness. This dynamic is much different than the “lightning strike” dynamic of most paid media efforts where an investment results in a near real-time effect.

Calculations of the total audience to which your messages are presented in a way that allows them to be passively discovered is similarly simple for paid audiences, but challenging for earned audiences. For paid audiences, the total coverage of your advertisements (number of “eyeballs”) forms a good audience proxy. However, to calculate the total audience for earned awareness (mostly in the form of content sites that mention your company or solutions), it may be simpler to do this by assuming a known conversion rate and using that to calculate what the overall audience must be, based on traffic.

While this technique obviously prevents any insights that might have been gained by understanding and analyzing traffic conversion rates, in earned passive awareness, this is often not something that can be easily optimized as there is very limited control over how and where you are mentioned, so the best action is often simply to drive audience sizes higher through garnering more share of the conversation.

Analyzing Paid Discovery – Advertising and Audience Definitions

In building a dashboard to show the effectiveness of advertising efforts, the focus is on understanding how to target audiences that will effectively convert into interested buyers. This area of the industry is evolving rapidly, and an important development is in how audiences are defined. Historically, an audience was defined mainly by the content itself, with a thin layer of demographics on top.

For example, an industry new site focused on printing technologies in the publishing sector could be assumed to have an audience of people involved in that discipline. Within this audience, advertisers could often target by title or organization fit based on declared demographics, but not much more.

In today’s online world, this is rapidly changing. The major content networks are beginning to provide the ability to target audiences based on historical activity. For example, those who visit certain pages on your site, or meet certain qualification criteria could be defined as a specific audience, regardless of where they are on the Internet, for having specific ads presented to them.

In analyzing advertising campaigns, this analysis of audience becomes critical. While remarketing audiences are likely to have substantially smaller sizes than their mainstream counterparts, they may offer opportunities to convert prospective buyers to MQLs at a much higher rate or present more precise information that is relevant to later stage investigation and validation only.




Inbound Links – Earning the Potential to be Discovered

Traffic to your web properties is the most tangible metric to dashboard when looking at passive discovery. However, when it comes to the efforts to earn this discovery, it is a difficult metric to use in order to guide decisions as it is an aggregate measure of all the content that is linked to. Efforts to build great content and share it with influencers lead to a more measurable metric of inbound links.

An inbound link is a link from another site on the web to a page of content on your website. Creating interesting, useful, and valuable content leads to more links, and each link increases the chances that your content will be discovered by those reading about the market space. Obviously, links from higher traffic and more credible sites increase this potential more than links from less relevant sites.

To gain an understanding of the success of your content marketing strategy, and areas for improvement, a dashboard of inbound links can be very useful. For each major area of your web properties, such as your main site, blogs, and campaign-specific sites, dashboard the total number of inbound links, the average quality for each inbound link (based on the traffic and credibility of the page the link resides on), and the number of visits generated by that link in the recent time period.



This dashboard view provides insights into the successes and challenges of efforts to create exceptional content that inspires others to link to it. If top level analysis of passive discovery shows levels of performance that are less than expected, an inbound link analysis can identify where the issues might be occurring.

Social Engagement and Passive Discovery

As social networks grow in importance as a medium through which information is shared, so too do they grow in importance as a place where prospective buyers happen upon information of interest to them and in doing so begin to learn about new solutions and new approaches. Each conversation or engagement that happens in the public domain, whether a discussion on LinkedIn or an interaction on Twitter creates an opportunity for another viewer to see the discussion and engage with the content being talked about.

While measurement in this area is evolving quickly, even a simple view of which social networks are seeing a large number of links to your content being shared, the total traffic to your content that is driven by each of these networks, and whether this traffic is successfully turning into inquiries.



Thinking about Passive Discovery

Whether paid (advertising) or unpaid (content, social), this top end of the funnel is crucial for driving new business. Without great dashboards, it is hard to optimize and grow it.

How do you think about, measure, and analyze the ways by which people "come across" your content?

Building Benchmarks - 3 Main Approaches

In order to build a high performance revenue management process, not only must it be instrumented and measured to allow you to understand current state, but it must be continually improved. As the market, technologies, competitors, and your own capabilities change, you must continually adapt, learn, and optimize.

However, to do so, it’s important to understand where in the overall revenue process you are performing well, and where you are performing poorly. This requires benchmarking your performance and guiding continual improvements in areas that are most in need or most critical for overall revenue performance. Over the next few posts, we'll look at ways to think about building these benchmarks.

Before we do that, however, we need to look at how we are approaching the challenge. Revenue performance benchmarks can be built in three main ways; against alternatives to ensure that the most effective and efficient way of accomplishing a tactical objective is being used, against a plan to ensure that each element of the revenue performance process is contributing at the required level, and against best in class companies to ensure that the performance levels being seen are maximized to the level that the best performers in your industry are seeing.

Against Alternatives

The best way to start with benchmarking is to look at individual components of the revenue process and ensure that each element of the process is performing as well as alternative options. To accomplish this, a clear comparison metric needs to be established that can be seen as equivalent. If, for example, a webinar and a whitepaper marketing campaign are being compared as alternatives, they can only be reasonably compared with a clear definition of what the outputs are.

If, for example, the immediate goal of the two marketing campaigns is driving marketing qualified leads for sales, then that metric allows a fair comparison. Metrics such as website traffic and raw inquiries will be too high in the funnel to be meaningful, and metrics such as sales pipeline movement or closed business will be too disconnected from the initiative to be useful.
For this reason, when benchmarking alternatives, only initiatives that are truly alternatives for each other in that they drive the same intended outcome can reasonably be compared. A humorous video that drives awareness cannot be reasonably compared to a webinar campaign that creates marketing qualified leads, and neither can be compared to an inside sales campaign that drives business towards close.

Against a Plan

To benchmark efforts across the entire revenue performance spectrum, we first need to develop a comprehensive plan that models the full buying process from beginning to end, and provides conversion metrics at each stage in the process. With this plan in place, the volumes, velocity, and conversion rates that are achieved can be compared to the planned rates, and adjustments can be made accordingly.

In building this plan, key gaps in revenue performance often become visible, especially at points where a transition between siloed groups takes place. Understanding these gaps, and planning efforts and investments to remedy them and bring the conversion rates within the gaps to a reasonable benchmark level can have a very positive effect on overall revenue performance.

While the ultimate goal is, of course, a plan that looks into the future and maps revenue efforts to company objectives, the simplest plan to get started with is an incremental adjustment of past performance. For this reason, clear dashboarding of the existing state is vital in building a forward looking plan.

Against Best in Class

With the comprehensive view of revenue performance that this planning effort allows, benchmarking can now be done against best in class companies. Although each business experiences a different situation, benchmarking revenue funnel metrics against best in class companies allows quick identification of potential areas of improvement.

With an industry vertical, similar realities of buyer dynamics and sophistication may allow insightful comparisons of funnel sizes, overall buying velocity, and conversion rates. Similarly, comparisons against other organizations that share the same general go-to-market strategy (such as through a free trial program), or are comparable in terms of deal sizes, may provide valuable insights in terms of conversion rates and response profiles to specific marketing or sales efforts.

Now that marketing automation has made analysis of the entire revenue engine more readily available, we are beginning to see the ability to provide cross-company and cross-industry marketing benchmarks that provide insight into what best in class performance truly looks like.

Each style of benchmarking adds value in its own unique way, and the more visibility you gain into the performance of your revenue engine, the more you are able to make needed optimizations and improvements.

Current State of Benchmarking?

As we begin a series of posts to look at benchmarking, how are you approaching the challenge today? Do you feel you have dashboards in place? Do you compare tactical alternatives? Is there a quarterly or annual plan that you measure your performance against across the entire revenue engine? Do you compare yourself to best in class benchmarks?