Today’s CRM and marketing automation systems provide measurement at every stage of the funnel. That’s good news for marketers who want to optimize the conversion process, and bad news for those who are used to measuring quantity over quality. Those days are over, and the focus is shifting. Sixty-eight percent of B2B marketers have made improving data quality their top priority, and for good reason. Bad data is a marketer’s worst nightmare. It costs businesses money, time and customers, and it’s the number one cause of CRM and MAP failure. Addressing this single issue is the quickest path to improving your top- and bottom-line results.
To illustrate the point, last year in the U.S. alone, CMOs invested $46 billion in CRM, sales acceleration, marketing automation and predictive analytics. That’s a big investment, but it’s only 1.5% of the total cost of bad data to U.S. businesses every year. To put it into perspective, consider this: bad data causes a loss of 12-15% of revenue at the top-line, and it adds another 15% in operational expense. That means Fortune 500 companies alone are losing $1.5 trillion at the top-line and adding another $1.8 trillion in expenses. Does anyone see the problem here?
There’s been too much complacency on the data quality issue. Data isn’t normalized, and businesses have grown to expect that 25% or more of third-party data is bad. If one of your goals is to align sales and marketing, improving lead quality and contact accuracy is the first place to start. It is one of the quickest routes to building trust among teams, and it’s guaranteed to improve your pipeline and funnel metrics.
Start by holding your data vendors to a higher standard. After all, you should get what you pay for, and you don’t want to be burning cycles chasing down leads that stand no chance of converting. Understand your ideal customer profile (ICP) and total available market (TAM). Do the strategic analysis that defines the market opportunity across customer segments — large, medium and small, and understand who the decision makers and influencers are. Measure the conversion on prospect to lead, lead to opportunity, opportunity to close/won and lead to close/won. You will also want to make sure you understand your fully loaded customer acquisition costs, average sale, average term, average monthly recurring revenue (MRR), average days to close and customer lifetime value (LTV).
Once you have this in place, you can focus on sales velocity and begin tweaking interdependent variables that impact velocity. For example, going down market, offering free trials, or changing price can significantly improve velocity. Finally, look at each lead source and channel individually, and measure the return on marketing investment.
The key point to take away is that measurements of quantity does not serve a purpose in today’s marketing environment. The last time I checked, the goal was to drive revenue, profit and market share, so it’s all about conversion and costs. These are the most important metrics you need to accurately measure your pipeline.
Chris Lynde, CEO of SaleScout Data Solutions, is a veteran of the big data industry. Under his leadership, SaleScout has become a B2B sales and marketing solutions provider recognized for data verification and accuracy, and the preferred partner for CRM hygiene, contact optimization and targeted leads. Chris is a serial entrepreneur with 35 years of experience leading startups and large database marketing divisions within public companies, including Equifax, Experian, MDC Partners and EDS/Neodata.
