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B2B LEAD GENERATION
Most marketers sit down every year to come up with a marketing forecast. Usually it's used to justify budgets and to allocate resources for the coming accounting period.
But as sales cycles become increasingly complex, with better analytics at every stage, the marketing forecast can also be used to prove marketing's overall value to the bottom line.
In this context, it's crucial to differentiate between the marketing forecast (which predicts the impact and value of marketing activities) and the short-term sales forecast (which predicts the dollar value of sales in a certain period).
“Marketing forecasts lead to better sales forecasts, which help you manage the overall business better,” said Jon Miller, VP-marketing at marketing automation company Marketo Inc. “In cases where chief sales officers lack bottom-up visibility into future periods,” he said, “highly accountable CMOs can fill the void with marketing forecasts.”
Laura Ashley, director-corporate marketing at Guidant Financial, which works with small businesses and entrepreneurs to help them raise operational funds, agreed.
Like many b2b marketers, Ashley divides her time into two marketing categories: One is aimed at educating customers and increasing brand awareness; the second yields predictable leads, such as paid search campaigns and other trackable measures. It can be challenging when the models call for historical information that marketing doesn't have, such as which leads actually converted to sales over the previous year.
“Often marketers track open rates or conversion rates, but they don't connect the dots to see if that lead has converted into an opportunity or a sale,” Ashley said. “You have to map out into the future as far as marketing can control.”
An integrated marketing automation program can help establish that process, said Sheryl Pattek, VP-principal analyst at Forrester Research.
“One of the things we talk about is lead-to-revenue management,” she said. “You want to be able to forecast a lead from the beginning of the pipeline to revenue; and the handoff to sales is so important. “Your marketing automation can follow through the process until the lead becomes sales-qualified, and then sales automation takes over,” she said. “When the sale closes, you loop back.”
Sales forecasts are typically reliable for about a quarter, or as long as qualified leads are with the sales department. Marketing forecasts, however, can stretch out much longer because they are concerned with a prospect's first contact onward. This becomes especially important as leads are spending much longer in the “self-education” phase of the funnel.
Forecasting does get harder when dealing with such brand awareness activities as social media that fall to marketing. Ashley, however, has developed an approach to forecasting the impact of these activities without resorting to such measures as “likes” or retweets, which are difficult to tie to actual sales.
“You can place a value on the negative impact of ignoring a marketing channel,” she said. “So for example, if you get a negative review on Yelp or a negative tweet, you can put an impact value on it and say that every negative social interaction reduces the number of positive interactions like click-throughs by a certain number.
“Then if you know how many click-throughs are needed to get a conversion, you can put an actual number on it in order to forecast sales,” Ashley said. “That's one way to justify your social media spend.”