Marketing plays a critical role in contributing to the pipeline. Marketing activities create preference, generate demand, optimize sales processes, and build the brand to develop the company’s reputation and to generate revenue. Today’s big challenge is to reduce the ever-increasing length of the sales cycle. As the length of the sales cycle increases, so does the demand for a larger pipeline. Marketers must continuously explore new opportunities to effectively grow their organization’s opportunity pipeline.
For businesses, a pipeline is a targeted list of potential buyers who might have an interest in your products or services. The challenge is to capture the attention of potential buyers and move as many of these potential buyers as possible through the pipeline stages of contact, suspect, qualified lead, and prospect, ultimately becoming a customer in as short a time as possible. Potential buyers who are not converted into customers are often referred to as leaks or pipeline leakage. Our role, as marketers, is to “plug the leak” and improve conversion rates. If the Marketing and Sales segments of the pipeline are not connected and aligned properly, the potential pipeline leakage can be very large.
So a crucial step for marketing’s contribution to the pipeline is ensuring it is properly aligned with sales. The importance of alignment is relatively easy to demonstrate. If 10% of sales calls are converted into deals, and the goal is to close 20%, there is clearly a problem. Identifying the source of alignment problems and the right actions to ensure business objectives are met is where complexity enters the picture. Is there a deficiency in the Sales staff skill set, resources or productivity? Or, do marketing activities not generate leads, which can be converted to customers? By evaluating and validating their customer buying process, Sales and Marketing can improve their connection and thus improve the pipeline. Marketing and Sales alignment allows for the creation and implementation of tactics that will facilitate opportunity development and movement.
Marketers need to place more focus on clearly demonstrating their contribution to the pipeline. CMOs and other marketing executives need to demonstrate the link between marketing, sales and generating revenue. They should emphasize their staff’s focus on more marketing activities that effectively and efficiently contribute to pipeline performance and the generation of revenue. That said, where should CMOs focus and what should they measure when it comes to pipeline contribution?
We recommend the following initial steps:
Step One – Establish Targets.
It is important to quantitatively define what contribution marketing is expected to make to the pipeline and how marketing will measure this contribution. Work with the sales organization and channel partners to establish measurable objectives and to determine what contribution marketing is expected to make to the pipeline. Sales and the channel are familiar with carrying a quota; marketing is typically not. Marketing needs to be able to set targets for what it will bring to the party.
Step Two – Focus Activities.
Focus on activities that improve pipeline quality, increase pipeline size and velocity. When it comes to pipeline contribution, marketing should measure how many and which leads it generated that were accepted by sales and ultimately resulted in new and/or additional top line revenue.
Step Three – Optimize Budget and Resources.
Only by being able to connect as many activities to business results in general, as well as specifically by region, product and segment will marketing know how to optimize its budget and allocate resources. This may require investing in robust an advanced analytics system to measure and improve the value of your marketing activities. These kinds of analytics enable you create models that correlate marketing activities to incremental sales and provide insight to help you tune your marketing strategies.
Step Four – Measure and Results.
It is essential for marketing to measure and report on its impact on creating preference, generating consideration, converting opportunities, promoting recurring sales and improving customer retention. Marketing should track three primary categories (1) marketing activities that generated initial contact that Marketing qualified and Sales ultimately closed. (2) Marketing activities that played a direct role in generating the opportunity. (3) Opportunities that were facilitated by Marketing influencing the influencers, including analysts, members of the press and key industry players.
Now more than ever, Marketing Executives must measure and report the value of marketing activities, optimize the allocation of resources, actively demonstrate a direct and indirect contribution to pipeline performance and the generation of top line revenue. By taking these four steps, marketing organizations can begin to increase marketing visibility and fulfill Marketing’s critical role in the successful growth of the opportunity pipeline.