Extranet Systems Help Manage Leads
Web-based lead management systems are being used to qualify and distribute sales leads, monitor lead follow-up and report on return on investment for leads distributed to inside sales, field sales and channel partners.
This is an overview of the advantages of an extranet lead distribution system - the importance of a system's ability to track lead follow-up, basic reporting functionality and use of cost per lead and ROI to evaluate the success of marketing programs.
Closed-loop extranet lead management refers to a system that allows leads to be distributed, tracked and reported directly from a Web browser. The depth of information that these systems can provide is invaluable for the marketing program manager, the inside sales manager and the channel partner or field sales representative receiving the lead. Using an extranet allows an organization's employees and partners to access leads using the same unified distribution and reporting system.
Having access to real-time reports is critical in managing the back end of all demandcreation marketing programs. Reports detailing how many leads from what sources have been distributed to which sales groups, whether the leads have been followed up on, where these leads are in the sales cycle and how much sales revenue can be attributed to each campaign can be accessed via the Web in real time with many systems. As long as the database behind the Web front end and the user interface are set up to capture this information, the variations of available reports are endless.
By implementing a closed-loop system that salespeople can effortlessly access, marketers now have the information needed to evaluate a program's success. Traditionally, if the information is available, marketers use ROI to determine campaign effectiveness. Usually this is figured by dividing the total revenue a program generates by the dollars spent on the program to come up with a return ratio per dollar spent.
If a program doesn't return a predetermined ratio of revenue to investment, it usually isn't replicated or won't make it out of the testing phase. Unfortunately, until recently, tying sales dollars directly to marketing campaigns for hi-tech products with long closing cycles has been difficult. However, ROI, in terms of dollars, doesn't always provide the information a marketer needs to analyze program effectiveness in a timely manner.
What happens when you have an expensive enterprise software product with average sales cycles of five months to nine months? Waiting nine months to perform an ROI analysis can be too long, especially if the product's life cycle is only 12 months. By having a consistent definition of what constitutes a qualified sales lead, marketers can look at how many leads a program generated, usually within 30 days of the program, and calculate a cost-per-lead figure.
This cost per lead can be compared with other lead sources and marketing campaigns, allowing for effective comparisons among campaigns. By looking at average revenue per lead over time, extrapolations can be made to determine the probable revenue from the campaign by multiplying the average revenue per lead by the number of leads a program produced.
In addition to providing data on the number of leads generated by a campaign, Web-based, closed-loop distribution systems provide additional information that enables marketers to use a deeper level of intelligence in their campaign analysis.
The ability to track lead follow-up provides that crucial piece of information that allows marketers to make responsible decisions about which campaigns are worth rolling out.
It is ineffective to compare lead sources by ROI without analyzing follow-up as part of the equation. Here's a hypothetical example that illustrates the importance of this point: If campaign A generates $100,000 in revenue and 85 of 100 leads were followed up, and campaign B generates $7,000 in revenue and five of 100 leads were followed up, the argument could be made that campaign B is a better program to repeat in the future if you have to make a choice where to put your marketing dollars. The average revenue per lead followed up from campaign A ends up being only $1,176, compared to $1,400 average revenue per lead pursued from campaign B.
Therefore, the leads distributed need to have dispositions associated with them that show where the leads are in the sales process. The ability to view follow-up by sales channel, team and individual allows sales and marketing to isolate exactly where any follow-up issues are and correct them while timely follow-up is still possible. Many extranet distribution systems make this information available in real time so sales, marketing and product managers can view program results daily in real time.
More and more hi-tech companies are making minimum follow-up percentages a requirement in order for channel partners to continue to receive leads.
Outsourcing. In many cases, implementing a Web-based solution can be quicker, more effective and cost-efficient by outsourcing the project rather than building these processes internally. Companies such as Techmar, San Jose, CA, and Harte-Hanks Response Management, Austin, TX, will host these applications as well as provide other lead qualification services.
System flexibility is critical since products, qualification criteria and sales team structures all change from quarter to quarter, and a company's lead management system has to be able to support these changes and continue to get the right opportunities to the right salespeople as quickly as possible.
In order to make intelligent marketing decisions about which campaigns deliver an acceptable ROI and cost per lead, it's critical that companies are able to implement a closed-loop lead management system to tie leads, follow-up and revenue back to specific marketing campaigns.
More importantly, an extranet distribution system is a must to pass leads to resellers, value-added resellers and field sales representatives that are either on the road or not connected to the same network. Integrating the Web front end with your lead database allows for the real-time reporting needed to analyze and modify campaigns to give you the best return on your marketing program investment, and stay one step ahead of the competition.
• Dave Holmes is director of marketing at ForRetail, San Francisco, a vertical infrastructure application service provider providing business-to-business e-commerce applications to the retail industry.