Published by Rain Today – February 6th, 2013
As sales and marketing executives struggle to better understand prospects and customers, one thing has become clear: most closed sales never enter the marketing funnel. In fact, nearly half of all B2B marketers say they close less than 4% of all marketing-generated leads, according to Forrester Research, and most companies attribute less than 25% of all revenue to marketing.
Where is the other 75% of revenue coming from? The answer is many sources, including up-sells and referrals, which have nothing to do with the marketing funnel. Yet, companies continue to allocate the majority of their marketing spend on filling the funnel with new leads.
At the crux of this problem is the traditional concept of the marketing funnel. For the marketing funnel model to work, all of the brand advocates at the bottom have to first be fed into the top of the funnel through marketing efforts.
But consider this scenario: a sales rep is introduced to a new prospect through a mutual friend, and the prospect becomes a customer. That lead never goes through the marketing funnel before becoming a sale.
The Lifecycle Paradigm Shift
Marketers instinctively understand the need to build prospect and customer engagement. But this cannot be done effectively using the old funnel model. The two strategies do not align. Instead, implementing marketing plans to nurture individuals or organizations over their customer lifecycle illustrates a paradigm shift in marketing strategy. It places an emphasis on marketing that goes beyond generating leads and passing them to the sales team. It recognizes that the nurturing of the relationships does not stop at the handoff; it continues past the qualification, and even past the sale.
The Customer Lifecycle Marketing approach recognizes that prospects and customers move through phases in their relationship with a brand, from initial contact to a fully engaged relationship. Marketers play a crucial role in this scenario, communicating with prospects and customers across all channels to drive engagement and movement through the lifecycle.
How Lifecycle Marketing Works
While every business has its own way of segmenting prospects and customers into stages of the relationship lifecycle, two main categories are always included: lead engagement and customer engagement. Under these two categories, a company should further define stages for each stage of the buying cycle.
If we first look at the pre-sale portion of the buying cycle, we can identify the process an individual or company goes through in getting to know your brand as they move forward through the customer lifecycle. Typically, the lead engagement phase consists of three distinct stages:
- Suspects: Your very first introduction to a lead places them in the Suspect stage, which contains all leads that have been touched by your brand and have entered your database but have not yet engaged with you.
- Prospects: As a lead progresses through your marketing and nurturing tracks, you collect more information. Once you have enough information to be able to identify them as an ideal fit, they become a viable lead and move into the Prospect stage.
- Qualified Prospects: As people move forward in the relationship, and you track their interest based on their engagement with your company, they earn a spot in the Qualified Prospect stage.
It’s the job of marketing and sales to nurture leads as they move through the lead engagement stages. They do this using a series of communications, often automated, that may consist of case studies, white papers, webinars, regional events, and online demos, to list a few. Each time a prospect engages in one of these communications, a point value is assigned, and the total points add up to give an overall engagement score.
Once an individual or company meets a certain score threshold, the lead is moved to the next stage. Once passed to a sales rep, the rep manages customer communication until the lead closes, the sale is lost, or the lead recycles to a previous stage.
The customer engagement phase also has several stages that signify movement from customer to brand advocate. Customer communication is individualized and personalized based on the current stage of the relationship, with the goal being to move the customer to the next more-engaged stage.
Putting the New Framework into Practice
Marketers who are willing to move away from the outdated funnel model and embrace the Customer Lifecycle Marketing framework can do so in four easy steps:
- Define your Customer Lifecycle Marketing programs. How will you market to individuals in each stage of the customer lifecycle?
- Define the Customer Lifecycle Marketing campaigns and tactics for each marketing program. Each lifecycle marketing program consists of one or more campaigns that are sequenced, triggered, and scheduled according to the campaign design and automation.
- Define target audiences and stages of the relationship lifecycle. Segment audiences based on attributes such as behavior, demographics, action, time, or lead score.
- Define the treatments and call to action (CTA) for each step in each campaign. Treatment refers to the communication method (electronic, physical, etc.). The CTA compels the individual to action.
Finally, select a marketing automation solution that gives you insight into how your prospects and customers are engaging with your brand. It needs to provide the flexibility to nurture all sources of revenue, including leads from marketing and sales, repeat customers, referrals, and up-sells.
To see the full article and comments click here
Latest posts by ROI Marketing (see all)
- The journey from single ticket sales to raving fans, literally - July 8, 2014
- Lifecycle Campaign: Two words that don’t belong together - June 17, 2014
- Building Engagement and Driving Revenue - March 7, 2014