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New Aberdeen Report Spotlights Revenue Impact of Lead Lifecycle Management

Over 80% of BtoB organizations admit a lack of synergy between the sales and marketing functions ultimately leads to lost revenue opportunities, according to new research from Aberdeen Group. Taking a holistic view of demand generation, a new report titled “Lead Lifecycle Management: Building a Pipeline that Never Leaks” found a significant increase in activity around lead management. According to the report, 81% of Best in Class (BIC) organizations use lead management tools, compared to 42% of Laggard organizations and 33% planning to use the solutions in the next two years.

Aberdeen_Graph“It’s important for organizations to start thinking about the entire customer experience from the time a lead becomes a prospect, to the time they are converted into what is hopefully a lifetime customer” notes Ian Michiels, Group Director, Customer Management Technology at Aberdeen Group and author of the report. “Every organization will have a different process for routing leads within the lead lifecycle approach. Unfortunately, the research suggests very few organizations actually take the time to map out the full lead lifecycle process to identify inefficiencies and best practices within existing processes.”

The report found that top pressures causing changes in demand generation processes are: Increase top line revenue (62%); increase lead to sales rate (55%); and increase the return on marketing investments (30%).

BIC organizations pursue various strategies to mitigate top pressures, and segmentation has emerged as a key BIC enabler for delivering higher Return On Marketing Investment. The report found that BIC organizations: segment and target more effectively (60%); develop formal nurturing programs (45%); and increase the number of sales-ready leads (40%), while also driving revenue in cross-selling and up-selling from existing customers.

“The Lead Lifecycle Management (LLM) concept is important because organizations need to think about all the different situations in which prospects or customer might require additional marketing before they make a purchase,” Michiels notes in the report. “Each situation requires a unique nurturing program before they make a purchase.”

The Aberdeen found BIC companies are twice as likely as all other organizations to have processes in place to route prospect and customers to different stages in the buying cycle or sales cycle, regardless of whether or not the opportunity is a new prospect or an existing customer.

Technology Gives Organizations a Leg Up
Technology is playing a crucial role in aligning sales and marketing in BtoB organizations. The May 2008 Aberdeen study, “Lead Scoring and Prioritization: The Path to Higher Conversion,” revealed that top performing organizations were two-times more likely than all other companies to leverage a lead management technology.

Lead management technology has surpassed the early adopter phase and is now starting to move into the growth phase in maturity and adoption, according to the report. “In the past, it simply wasn’t feasible to manage lead lifecycle phases manually and organizations that tried often failed in a tangled web of difficult to measure, unpredictable marketing programs,” Michiels notes in the report. “But today, lead nurturing and customer segmentation can be enhanced with technology, making the concept of LLM both attainable and useful for the average BtoB organization.”

The report found three fundamental differences between BIC and all other organizations that give the BIC a competitive advantage in demand generation. BIC are more likely to:

1)    Nurture leads,
2)    Score leads,
3)    Segment/target leads.

The report advises BtoB organizations to leverage multi-campaign program nurturing, and have sales and marketing should be meeting on a periodic basis to review successes and failures.

“Lead Lifecycle Management is about binding together marketing, sales and service to maximize the number of sales-ready opportunities, whether these come from newly acquired leads or existing customers,” notes Michiels. “If only 16% of sales-ready opportunities close in the average organization, there are still incredible opportunities for performance improvements in all organizations.”


For more of the study’s findings and key takeaways, DemandGen subscribers can access the full report through September 30.