Tag Archives: sales and marketing plan

Creating a Funnel-Driven Marketing Plan Your CEO Will Love

Will your next revenue  plan clearly show how marketing and sales will work together to implement the company strategy? Will it convincingly and mathematically model how the two organizations will apply tactics that advance enough buyers through the pipeline/funnel to achieve the revenue objectives? If your budget is cut by 20% before approval, can you quickly show the impact of that cut on demand generation and revenue generation?

If you answered “no” to any of these questions I urge you register for my October 3 workshop at DemandCon in Boston. Fittingly enough, the workshop is entitled, “Creating a Funnel-Driven Marketing Plan Your CEO will Love.”  This is a certified workshop for sales and marketing professionals that reveals advanced techniques and best practices for increasing revenue volume and velocity by using integrated and aligned funnel planning. It’s not just a planning process, it’s a an amazingly effective way to align sales and marketing for utmost effectiveness.

 

 

 

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How Long is Your Revenue Runway?

Many business managers I speak with don’t have an accurate view of how long their revenue runway is; or to put the metaphor aside for a moment, they are unclear about how much time is required for the marketing and sales team to create enough customers to achieve a revenue target. Almost without exception the estimated time to revenue is perceived as being much shorter than it is in reality. The misperception is dangerous. It leads to wildly inaccurate forecasts, wasted budgets, and unnecessary management turnover.

Ask any pilot and they’ll tell you with a high degree of accuracy the length of runway their plane needs for takeoff depending on weight of the aircraft and environmental factors. They can also tell you at what ground speed their plane achieves the necessary lift for takeoff. If their plane is a G5 it needs 5, 150 feet of runway to take off. If it is a 777-200 there better be at least 8, 300 feet of black top in front of it.

If knowing when a given level of revenue can be achieved is so critical, why do companies get it so wrong? It’s because they are only looking at the late stages of their funnel and ignoring the time necessary to find and nurture prospective buyers (the mid and early stages) to the point where Sales should engage. They’ve been trapped in the “Sales Cycle” mentality rather than adopt the “Buying Cycle” perspective.

Recently while creating an integrated Sales and Marketing plan for a client, I asked the management team to tell me the length of their sales cycle. They estimated it was 8-12 weeks. They had historical data to show that once a prospect was talking with them about the problem they hoped to solve it took 8-12 weeks to advance to a point where a purchase decision was made.

Unfortunately, if they had built their business plan and cash flow projection based on that information they would have crashed and burned just like a G5 with only 2,000 feet of runway.

What hadn’t been taken into consideration was the amount of time Marketing required to attract and nurture buyers. In the case of my client, once all the stages of the buyer’s journey were identified, they estimated that the early and middle stages of the funnel took 38 weeks. So the time it will take to find, nurture, and close a prospect actually will be 50 weeks–nearly one year–not 8-12 weeks.

This knowledge enabled us to build a realistic demand generation plan to support short term and long term revenue objectives.

The other factor impacting time to revenue is internal bureaucracy. For some companies the amount of time it takes for Marketing to plan and implement a program or campaign is ridiculous. Companies who want to be more nimble and aggressive must take a critical look at the approval processes for marketing budgets and content. Does an email campaign really need five managers to sign off on it? Why make Marketing jump through another set of hoops to get approval for a specific program budget if it has an approved budget for the quarter? Worse yet, why is that the president or the Board have to sign off on a $10,000 program? Tight fiscal restraints can choke the life out of Marketing momentum and extend the time to revenue. It’s far better to hire good managers, approve budgets well in advance, and let them manage to the budget.

Don’t let expectations be set that your revenue cycle is shorter (or longer) than it really is. Marketing and Sales have to collaborate in the planning process in order to create the right model for the company.

Top-10 Processes that Align Sales and Marketing

Below is a list of the primary processes in Sales and Marketing that the two departments need to align and keep aligned over time. These processes exist at some level of maturity and sophistication in every company, whether formalized and documented, or informal and ad hoc. They are seldom equally shared. If Sales and Marketing are not working as partners to create and manage these processes, the revenue engine cannot operate at full potential.

These processes, and those in other departments that impact Sales effectiveness, are the subject of a white paper, “The Internal Forces that Empower or Impair Sales”, which provides critical reading for any sales executive who spends too much time lobbying inside his company for better support.

  1. Funnel stage definition: defining the buyer’s journey and designing the sales funnel stages correspondingly.
  2. Lead qualification and scoring: defining at what stage in the funnel a contact becomes a marketing-qualified lead and then a sales-qualified lead.
  3. Forecasting and reporting: a forecast is supported by the funnel metrics; these metrics are impacted jointly by Sales and Marketing.
  4. Lead nurturing: communicating with contacts and leads in the funnel in such a way that they advance through the stages efficiently.
  5. Lead recycling: when to return stalled leads back to Marketing and how to apply further nurturing.
  6. Customer retention and growth: how Marketing and Sales work to keep and grow customers.
  7. Market requirements: the way Marketing taps Sales for input to the market requirement document.
  8. Strategic account planning: the way Sales taps Marketing for support with strategic account identification and development.
  9. Quarterly planning: jointly developing and tracking revenue-generation plans and campaigns.
  10. Content and collateral development: how Marketing works with Sales to define and deliver the right sales tools.

Funnel Plan, The Perfect Precursor to Marketing Automation

I read an excellent post on Marketing Automation Software.com by Mac MacConnel of BlueBird Strategies that gave savvy advice for companies that have just inked a deal for a marketing automation (MA) system.

His article highlighted the speed bumps that can hinder ROI for marketing automation right from the start.

The three speed bumps are, according to MacConnel:

  1. Lack of fresh inquiries
  2. Lack of good content to offer leads
  3. A weak  lead scoring model

MacConnel’s article reminded me of how important an aligned sales and marketing plan is to the full and rapid realization of a MA system’s benefits.

In companies where Sales and Marketing aren’t properly aligned around the funnel the process of adopting a MA system will be more painful and take more time. Ask anyone who has been there.

In companies where Sales and Marketing are already ‘on the same page’, the adoption of a powerful MA system will turbo charge the revenue engine quickly because the biggest speed bumps will have already been removed.

I’m a proponent of aligning Sales and Marketing through a rigorous funnel planning process BEFORE adopting marketing automation. Just like learning to drive is a smart precursor before buying a car, so is aligning Sales and Marketing a smart precursor to a marketing automation investment.

How does an aligned revenue plan (funnel plan) prevent or minimize the speed bumps MacConnel warns us about?

  1. A continual source of fresh inquiries.  Teams that are wedded to an aligned funnel plan know exactly how many fresh names need to be drawn into the funnel and nurtured through the funnel stages. Through modeling and testing they will already have a good idea of what tactics should be employed and with what rhythm to ensure a continual flow.
  2. Good content relevant to the buyer. Teams that are aligned around the buyer’s journey and are clear about the buyer’s problem they are solving are in a better position to know what content should be provided at different stages in the funnel. The right funnel planning process for Marketing and Sales aids the team in achieving higher levels of buyer insight, which leads to better content development.
  3. Smart lead scoring. Teams that have defined the stages of a revenue funnel with complete empathy for the buyer’s journey are going to create better lead scoring rules. They will be more aware of the buyer’s behaviors that signal different levels of interest.  This knowledge of ‘interest’, when added to demographic  and firmographic  information for ‘fit’ results in sophisticated lead scoring.

Companies can adopt MA the hard way or the easy way. The easy way is to first get Marketing and Sales aligned via a funnel planning (revenue planning) process.

Why Are Sales and Marketing Usually Unaligned?

(I originally wrote this post for Lead Views, Leadformix’s blog. I’m re-posting it here.)

At two different speaking engagements this month I asked the audiences of marketers if they thought the lack of sales and marketing alignment was the biggest obstacle in their company to achieving significant revenue growth.  At both events (one a marketing conference, the other a webinar) the results were similar. Over 60% agreed that the leading nemesis to greater revenue performance was the lack of alignment between their department and Sales. The other 30% to 40% believed another factor was primarily to blame such as market/economic factors, resource restraints, skill gaps, relationship gaps, or process / tool gaps.

Let me cut to the chase on the topic of sales and marketing alignment. There are three reasons why mis-alignment is present.

1.       Top management doesn’t understand the full contribution that Marketing can make and should make to the business.

2.       Marketers are not adequately trained to be true partners with Sales in the revenue generation process.

3.       There isn’t an integrated planning process to enable (or force) Marketing and Sales to craft unified strategies and tactics.

The CEO. The buck stops at the top. So I’m placing some of the blame at the feet of the CEO because of their misunderstanding or ignorance of the significant role that Marketing can play in their organization. If they don’t really understand the power of Marketing, they won’t hire the right skills, insist on the right processes, or insist that Marketing and Sales work as a tight team 24/7.  The CEO doesn’t have to know how to align he just needs to create the environment where alignment will occur. Without a really capable Marketing function a company is going into battle without all its weapons.

The Marketer. Sorry to admit that one of the biggest reasons for lack of alignment in B2B companies is that the folks in marketing just don’t have the necessary skills and perspective. Too many bright marketers haven’t learned how to be of greater value to the organization. Marketing in a B2B company is so much more involved than “branding”. We must see how to contribute closer to the “point of revenue” than our programs are impacting today. We must connect and measure our ability to impact company goals. This takes advanced B2B training, coaching, or years of painful experience. Without requisite skills the Marketer can’t earn the respect of Sales and the CEO.

The Process. The annual planning process is usually done in silos. Marketing does a plan. Sales does a plan. The two seldom talk during this critical period. The right mercifully short but rigorous planning process can harness the creativity of Marketing and Sales to construct together an action plan for achieving a revenue objective. The right process will focus the two departments on the buyer’s journey and the market, rather than a sales methodology.

If my two unscientific polls are representative of all B2B companies, 60% are blocking themselves from achieving greater revenue performance because the CEO doesn’t know what to demand from Marketing, Marketers don’t have the right skills to deliver bigger results, and the companies aren’t following an integrated market-focused planning process involving Marketing and Sales.

The good news is all three of these situations can be remedied in a relatively short period of time. CEO’s can learn what to expect from the marketing function. Marketers can learn critical skills. Sales and Marketing can plan together in a way that really aligns their efforts and processes.

Feeling the Impact of the 9-Month Year Yet?

I know some of you are sweating bullets right now. The end of Q1 is near. Your revenue and marketing objectives may be in jeopardy.  Here’s why the first fiscal quarter for a lot of companies is painful.

If Q1 is tough you’re probably feeling the impact of a 9-month year. The problem is you put the hurt on yourself. Yep, you caused the panic in Q1 if:

  1. The 2010 sales and marketing  plan/budget wasn’t approved by October 2009
  2. Marketing and sales funds for 2010 programs weren’t made available until January
  3. Sales and marketing were completely consumed in Q4 on moving buyers through the last few stages of the funnel
  4. Sales and marketing don’t know what the lag time is for each stage of their revenue funnel.

Any one of these things will throw a big wrench into the revenue-generation gears for Q1. Instead of moving the necessary volume of buyers through the funnel during the first quarter, many of you were just getting plans approved and starting to execute. No way can you impact Q1 revenue if the length of your average sales cycle is 8 weeks or more and campaigns are launched in late January or so.

Getting out of the blocks quickly with your sales and marketing programs  is only a part of the solution. The real focus has to be on maintaining rhythmic continuity of sales and marketing tactics through Q4 so each stage of the funnel has the right number of buyers necessary to achieve the Q1 revenue target. (If you don’t know how many buyers are needed at each stage you have an even bigger obstacle to revenue growth).

If it’ll take  the Board until late November or December to approve the operating budget ask for a reasonable baseline budget well in advance so you can commit to January-February programs.

Don’t let yourself be trapped trying to achieve a 12-month revenue number with only 9 months of runway.