Historically, SaaS companies needed a significant amount of
funding to get to cash flow breakeven. This was because it takes time for the recurring
revenues to build up enough to cover the fixed and semi-fixed costs of
development, marketing and sales. For example, Ken points out that both salesforce.com
and Netsuite took over $100M in venture capital before going public.

Today, however, those types of valuations and funding levels
are not available, and companies need to find ways to grow their business
without using up as much capital. Ken gives a few suggestions for accomplishing
this goal, including building up services revenue and getting payments up front
where possible.

Perhaps mostly important, Ken writes that capital-efficient growth
can only come from streamlined customer acquisition processes that takes
advantage of the latest internet-era tools, such as salesforce.com; WebEx, GoToMeeting,
or ReadyTalk; and Marketo. Together, tools like these create an ecosystem for capital-efficient
growth: CRM to manage accounts, contacts, and opportunities; online meetings to
improve productivity and reduce travel cost; and lead
management to create a steady stream of qualified sales leads and to help the
sales team prioritize their time onto the best leads and opportunities. The
result of this infrastructure is a streamlined revenue cycle

that can drive 40% better sales effectiveness (or more), allowing each sales rep
to carry higher quota and to drive more revenue at the same fixed cost.

Manage your complexity

At Marketo, we use these tools to drive our own high-volume revenue
cycle, so I know it works.

However, one trap that companies run into is investing in marketing
automation that is not as fast, nimble or flexible as tools like salesforce.com
or WebEx. Even if delivered over the web, these older marketing automation
tools are still from the old era of expensive and rigid enterprise software. As
a result, they tend to force you to do things “The Hard Way”.

To truly accomplish streamlined customer acquisition, your
marketing automation tool needs to let you work “The Easy Way”, e.g.:

• Up and running fast, without significant costs for integration to CRM
• Easy to learn and use without needing to hire specialists or to pay for training courses
• Flexibile to let you adapt marketing programs to changing market conditions

At Marketo, we’ve recently published The Big Easy
Guidebook to Marketing Automation to help our prospects understand some of
the differences between “The Hard Way” and “The Easy Way”. Enjoy!

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Ask these questions to yourself, your boss, your direct reports, your head of sales, and any other stakeholders in your demand generation process.

Lead Generation

• Are you happy with the number of leads in your pipeline? Is your sales team?
• How many more qualified sales leads could you generate if you had the ability to nurture relationships with qualified prospects and automatically identify when someone is ready to engage with sales?
• Do you get a lot of leads that seem good but are not yet in an active buying cycles? What do you do with them today?
• How many more sales-ready leads could you create if you had the ability to develop relevant and personalized relationships with early-stage prospects before passing them to sales?

Lead Follow-Up

• Does sales follow-up on all your marketing leads today?
• Do your leads ever get dropped on the floor? Are you confident that every lead gets appropriate and timely follow-up?
• How much more effective would your lead generation be if you could ensure no lead got dropped and everyone got appropriate and timely follow-up?
• How much more effective would your marketing programs be if sales followed up on twice as many leads as they do today?

Marketing Efficiency

• How long does it take you to design and create a new campaign? How many people do you need to get involved?
• Do you ever feel like you have too much to get done in a day? Do you ever feel like you get stuck in the weeks managing all the detail of your demand generation campaigns?
• If you could design and create every aspect of a new campaign in just a few hours, how much could you improve your marketing results?
• How much time could you save if you had a software tool that helped to automate the boring, manual aspects of campaigns? How much could you improve ROI if you could spend more time focusing on the strategic and creative aspects of campaigns?

Demonstrating Marketing ROI

• Do you wish you could better understand and demonstrate how all your marketing activities impact pipeline and revenue?
• How much could you improve the ROI of your marketing programs if you understood how each program is influencing pipeline and revenue, and could adjust budgets accordingly?

Interpreting the Results

Perhaps your current demand generation processes are just fine. If so, congratulations! If not, there is dramatic ROI to be gained from better lead management. According to Forrester Research, B2B marketers who make this shift are 2X more productive — plus companies with mature lead management processes are almost twice as likely as average to act on 75% or more marketing leads and are 230% more likely than average to follow-up within one day (Laura Ramos, B2B Marketers Lack Lead Management Maturity, October 2006).

Are you ready to take the next step?

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Download the full MP3: Sales is from Mars, Marketing is From Venus – Vol II – Lead Scoring.

Podcast Summary:

Lead scoring is the process of determining a prospect’s level of interest in your solution (engagement), as well as your interest in a prospect (demographics targeting). Lead scoring matters because fewer than 25% of web inquiries are sales ready. Since sales reps don’t want to waste their time on leads that are not in an active buying cycle, passing these early stage inquiries to sales tends to hurt the relationship between sales and marketing.

Lead scoring matters because there will always be some leads that are truly “hot” so B2B marketers need a way to find the hot leads and pass them to sales before a competitor contacts them or they go cold. At the same time, the majority of inquiries require lead nurturing before they become sales ready, so marketers also need the ability to know when to try to nudge the prospect to the next stage and when to pull back and give the prospect some space.

When used effectively, lead scoring means you will pass fewer, but higher quality, leads to sales. By not wasting sales time on low quality leads, reps can focus on just the high quality leads-meaning wins rates and sales productivity go up. In fact, as little as a 10% increase in lead quality can generate a 40% increase in sales productivity. In a world where the sales department costs 20 or 30% of total revenue, this kind of improvement means a dramatic impact on the bottom line.

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