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Each issue of CMO Close-up features an interview with a CMO, as well as other marketing executives answering that issue's "Big Question."
This week's feature:
Close-up with Laura Howard, CMO, ECI Telecom
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Learning to nurture
Make the most of the leads you already know—and who know you—to succeed in a down economy
Richard Karpinski
Story posted: November 10, 2008 - 9:30 am EDT
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What if you could access a large pool of potential customers that were already aware of your company and its products, open to being educated and agreeable to receiving e-mails and other communications straight from your marketing team?
And, if you could reach them at no additional acquisition cost, would you be interested?
Look no further than your existing lead database, say b-to-b marketers, agencies and lead management providers. All that's required is a little bit of nurturing, lead nurturing that is.
The first step is to make a clear distinction between generating leads and nurturing them—even though some of the same practices and marketing platforms can be used for each type.
“Lead generation is primarily about outbound campaigns—the e-mail blast, the landing page,” said David Raab, an analyst at Raab Associates, which recently completed a detailed evaluation of lead management platforms. “Lead nurturing, on the other hand, starts after you get a lead into your database.”
The lead nurturing process rests on a sequence of back-and-forth contacts with these prospects, educating them and taking their measure “until they are ready to be turned over to sales as qualified leads,” Raab said.
It turns out that lead nurturing techniques and systems fill a common gap in marketing and sales departments: Leads that aren't “hot” enough to throw over the walls to sales often simply get thrown out.
“Lead nurturing takes them and grows them to a point where they become qualified,” Raab said.
It isn't hard to see how this activity would be particularly important in a down economy, when marketing departments have less money to spend on pure lead generation and need to make the most of their budgets.
Regardless of economic conditions, lead nurturing is an activity that should sit at the center of any marketing department. As a process, it makes the most of the skills marketers have learned online, and it's particularly powerful when combined with a marketing software platform. In fact, such software is absolutely critical to automate the execution of these multistep, multitrack campaigns.
Take housing and building materials vendor Hager Electro, which has used lead nurturing from Newton, Mass.-based vendor Neolane to implement content-rich follow-up campaigns.
The platform not only automates the process, it measures it as well; the company now knows that 50% of new business in 2007 was generated by a team of just three people.
“Instead of cutting budgets, we are actually getting more budget to implement new up-selling and cross-selling tactics,” said Fabrice Canton, manager of e-marketing at Hager (See case study, page 26).
Direct marketing agency Catalyst Direct uses a home-built lead nurturing program to build “drip-marketing” campaigns for Citibank, Weyerhaeuser, GE Money and others.
“Leads you generate immediately are really the "good fortune' of the campaign, the benefit you get from being active,” said Jeff Cleary, managing director of Catalyst Direct. “Where you are really tested as a marketer is what you do with everyone else. You have to continue to invest in that audience. Those are the people that will convert in the next 12 to 18 months.”
Todd Blumsack, national sales manager for printer manufacturer Xeikon, ran a full-scale lead nurturing program at his previous marketing post at Eastman Kodak Co. Although he is more focused on lead generation at Xeikon—specifically, building up an initial database of leads—he's hoping to replicate a nurturing program for his current employer.
“You need multiple contacts with the right audience,” Blumsack said, noting that high-powered creative is less important than consistent, targeted content. For instance, Kodak, using such a program, was able to cut sales cycles by 40% to 50%, he said, merely by ensuring that leads were already well-educated and ready to buy.
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AT THEIR "OWN PACE'
While lead nurturing campaigns can selectively push content at prospects and prod them in certain directions, the reality is that “leads move through [a nurturing process] at their own pace,” said Catalyst Direct's Cleary, adding: “Marketers need to be more sensitive to that.”
Lead nurturing practices and platforms are built for just that type of hands-off customer interaction. They are automated, so marketers can keep an eye on longer-term prospects without wasting time. And they have triggers and alerts than can let marketing know exactly when a lead is becoming qualified.
At Catalyst Direct, that means moving leads through a scoring cycle of “no awareness,” “awareness,” “consideration” and finally “active consideration.” In the early phases, Cleary said, the focus is on educational material; later on comes delivery of more active marketing materials, such as product demos or online RFP builders.
Building these sorts of sophisticated campaigns often requires a software platform.
“The key to next-generation lead nurturing campaigns is not to have canned, out-of-the-box linear programs featuring just one, two or three steps. That's just too basic and simplistic,” said Stephan Dietrich, president of lead management vendor Neolane. Neolane's platform is typical of most lead management platforms in that it includes graphical tools for building if-then-else flow charts, links to Web analysis tools for tracking user behavior and sophisticated scoring systems for determining how ready leads are to move to the next step.
Because lead generation and nurturing tools (see vendor chart, below) often come today as on-demand software, marketers can pay in the low thousands of dollars per month for such systems, even hiding them in their operations budget if the marketing group is big enough. That makes them low-cost, high-return and suitable for most sizes of budgets.
“Especially in a downturn, technology has to help marketers do more with less resources,” said Neolane's Dietrich, noting that he's had customers with $200 million in revenue but just two marketers.
ControlScan, a small company that provides online merchants with credit card policy compliance technology, is another example of a marketer doing more with less.
The company didn't even have a marketing department until last year. Now, not only is it developing rich content to target leads—including educational podcasts, blog posts and white papers—it has begun implementing a lead nurturing system from Silverpop/Vtrenz to automate the process.
“We have a thoughtful content strategy, but we're trying to build in more activity-triggered campaigns, based on how people respond to our content,” said Heather Foster, Control Scan's VP-marketing. Early tests of the approach have tripled response rates, all of which leads to more qualified leads. “We couldn't do that without software to help us,” Foster said.
Nurturing considerations are even infiltrating the demand generation side of the equation, such as at publishers and event companies, which have been more focused on helping advertisers generate new leads.
Take United Business Media's TechWeb division, which is highly focused on keeping its own very large database of site visitors and readers nurtured with new, well-targeted content. The media company is also beginning to work with marketers as an integral part of their lead nurturing processes, including evaluating bringing a lead nurturing software platform in-house.
“Our clients would like us to be more involved in the nurturing process,” said Michael Rasmussen, TechWeb's director of performance marketing, noting that any effort in that area is still informal and conducted mostly with larger clients.
Webcast vendor On24 is seeing the same trend. Whereas once marketers used the service for one-time lead generation, now they are more likely to set a series of online events—often educational in nature-that are part of a program to take existing leads and move them further down the funnel, said Denise Persson, CMO at On24.
“You have to position your company as a trusted adviser during this process and focus on bringing them more value than anyone else,” Persson said. “It could be three months, it could be a year, but that lead nurturing and maturation is really the big trend right now.” M
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