With small teams moving quickly, many manufacturing marketers have traditionally focused on lead volume as a key metric. It’s easy to measure and work under the theory that the more leads that flow into the top of the sales funnel, the more that will flow through and convert to a completed sale. Yet, more isn’t always better. A laser focus on lead velocity, that is, improving the conversion ratio for leads as they move through the sales pipeline, yields greater revenue returns while increasing the sales confidence.
When marketing focuses on volume, sales kisses a lot of frogs in hopes of finding the hot leads in the mix. While there is a finite number of customers in the market for a product at any given time, there is a point of diminishing returns. When marketing sends sales too many frogs, they risk losing the sales department’s trust and with it the value of any leads they pass to sales.
Velocity, the rate at which leads convert as they travel through the sales funnel, is the answer for four clear reasons:
1. Increase in Lead Generation ROI
Whether a direct lead, or a lead through the channel, manufacturing marketers today have to maximize their use of time and resources to prioritize prospective customer interest. Organizations that nurture leads experience an increase in lead generation ROI. After all, the velocity with which leads are converted to sales qualified leads increases efficiency while ensuring sales spends its time having high quality conversations. For example, Bisco Industries, a manufacturer of electronic components and fasteners, implemented lead nurturing and benefited from a 1,400 percent lead generation ROI, winning the 2017 Nucleus Research ROI Award.
2. Segmentation, tailored content and lead nurturing
While over half of manufacturing marketers don’t currently segment prospects at all, tailoring content to individual buyers increases lead conversion significantly. Velocity-centric marketing encourages segmentation, nurturing each lead based on things like product interest, position, industry, and more. According to Wakefield Research, 77 percent of manufacturing organizations conduct more than 10 promotions a year with 46 percent running more than 21.
Case in point: Last year Bisco Industries began delivering near real-time content to prospects, tailored to how those prospects liked to engage with the company. In doing so, they nurtured prospects through the buying journey from initial engagement to quote request, to placing an order and setting up a Bisco credit account. These customers were then further nurtured, adding new product lines to their account. With this approach, tailoring content to different prospects at different times in the buying process, Bisco increased its conversion rate by 1,285 percent. While Bisco only grew new opportunities by 4 percent, its enhanced conversions resulted in an average annual benefit to Bisco of $301,388.
3. Increased sales efficiency increases sales impact
Even small, incremental increases in conversion rates can result in significant sales impact. For example, consider this sample chart from the Bisco ROI study that illustrates the impact of an increased conversion rate while showing how much wasted effort is spent with clearly unqualified leads. A bonus side effect to an increase in velocity is that sales can reinvest previously wasted effort in upsell and cross-sell activities, making them even more productive.
4. Sales Marketing Alignment
To affect positive change in conversion across the sales funnel, it’s important for sales and marketing to work together and make sure they have common definitions for the sales and marketing process. For example, what is a lead, an MQL, SQL, Opportunity, etc. With these definitions in hand, measure the lead conversion rate from each stage to the next. Key questions to ask are:
- What is the current velocity of prospects in the pipeline?
- Are there any bottlenecks in the process?
- Which prospects move faster today and why?
The more effective the funnel, the more efficient it is at converting at all levels which can have big impacts on marketing and sales productivity -- and most importantly -- on sales outcomes. Segmentation and personalized nurturing campaigns will speed velocity and increase the quality of leads to the sales organization. Which will in turn grow sales productivity, help them win more sales, and increase sales confidence in the marketing process.
Nina Church-Adams is Senior VP, Marketing at Act-On where she manages the company’s global marketing function, bringing more than 14 years of marketing leadership experience building teams, products, and brands at industry leading companies such as Nike and American Express.