There’s an internationally renowned doughnut chain where people stand in line for 90 minutes just to get one of their hot doughnuts. It has become common practice for each of these doughnut stores to light up a sign when the new, hot doughnuts are ready. Many swear that the hot, glazed, yeast-raised doughnuts taste more like a light, fluffy pastry than a cake doughnut and are well worth the wait, but you have to eat them while they are hot. Some people drive 60 miles out of their way just to get these doughnuts while others download smart phone apps to find out when and where the doughnuts are ready.
This doughnut chain’s success did not come by accident. The company has been around for 75 years and back in the 1950’s, the company designed and implemented equipment to automate the doughnut-making process in each of its factory stores. After the dry ingredients are mixed together, the proofing, frying, and glazing processes are all automated. Employees in these doughnut stores know how long the doughnut is supposed to be in each stage. It takes 33 minutes to complete the process to make a glazed doughnut. Everything is predictable. Customer expectations are set and met. Customers leave satisfied time and time again.
Now imagine your marketing department as the doughnut store, where leads are the doughnuts and your sales reps are your customers.
Would your store follow the process and give your customers hot doughnuts or would it give your customers uncooked doughnuts or even dry ingredients?
Despite using a marketing automation system, many marketers continue to gather names and business cards at trade shows and conferences then give them to their sales reps. They are handing their sales reps uncooked doughnuts and asking them to fry them. These marketers use marketing automation to “batch and blast” email campaigns but not really to qualify and nurture leads. They say that their marketing departments are small and they do not have the bandwidth to implement lead qualification and lead nurturing processes. However, I would argue that if these marketers spent a little extra time setting up a revenue cycle model, they would see bigger dividends for years to come. Let the marketing automation platform do the “heavy lifting” and if you do not have the bandwidth or skills a professional services team can help you get started . Marketing automation puts marketing departments in a better position to handle the ever-growing demands and growth of their sales teams and the revenue cycle model changes the way you spend your time.
Let’s say you want to get 150 more new opportunities into the sales pipeline this quarter. Typically, most marketers would immediately begin creating new lead generation campaigns and programs but if you have a revenue cycle model in place, you should look at your different stages and focus on improving conversion rates between these stages rather than generating new broad-based email campaigns. You may find that increasing the conversion rate between your prospect stage and your lead stage by five percent will generate more opportunities than if you sent out another email campaign.
The point is, just like making doughnuts, you have to have clearly defined stages and know how long your prospect names should be in each stage to grow and have any sense of predictability. At Marketo, we use the following revenue cycle model stages:
- All Names: This is the entry point for everyone. These individuals have typically given us the type of information you find on a business card.
- Engaged: At this stage, people have shown some real interest through an activity such as attending a webinar, downloading website content, or clicking on an email link.
- Prospect: People at this stage could buy one day but aren’t ready to engage with sales yet. They are “qualified” based on our scoring rules.
- Lead: These marketing-qualified leads (MQLs) are prospects that show enough behavioral engagement or buying intent that we want to call them.
- Sales Lead: These leads have been qualified as “sales ready” by our telequalification team (we call them SDRs or Sales Development Reps).
- Opportunity: Our sales team has accepted these leads and added them to the sales pipeline as active deals.
- Customer: We have closed these deals and won new customer business. (These customers are then passed on to a new revenue cycle for upsell and retention.)
Your revenue cycle model may differ a little based on your specific business and you don’t want to forget to build in a process to recycle leads during the later stages due to timing issues, budget changes, etc.
Invest the time to define your revenue cycle model and make sure it is integrated into your marketing automation platform so that you can benefit from the marketing analytics. Be sure to include key members of the sales team in your process to ensure that you have agreement on stage definition and requirements. Implement your revenue cycle model and your sales team will soon raving about your warm and hot leads.