Lead Generation 2010 Report Executive Summary

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LEAD GENERATION BENCHMARK REPORT:

HOW THE BEST FIRMS FILL THE PIPELINE

2010 ITSMA and RainToday.com Lead Generation Survey

EXECUTIVE SUMMARY

November 2010

Katie Espinola

Senior Research Analyst

ITSMA

Julie Schwartz

Senior Vice President

Research and Thought Leadership

ITSMA

John Doerr

President

RAIN Group

Mike Schultz

Publisher

RainToday.com

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This report is the property of ITSMA and Raintoday.com and is provided to ITSMA and Raintoday.com sponsors of the research program. No part of this publication may be reproduced, stored in a retrieval system, or transmitted by any means, electronic or mechanical, without the prior written permission of ITSMA Lexington, Massachusetts, USA and RainToday.com Framingham, Massachusetts, USA. This report shall be treated at all times as a confidential and proprietary document for internal use only.

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T A B L E O F C O N T E N T S

PAGE

Foreword ... 1

How to Use This Report ... 1

Definition of Lead Generation ... 1

Executive Summary ... 2

Methodology ... 2

Uncovering the Standout Performers... 2

Lead Generation Best Practices ... 3

Segment Based on Deep Knowledge of Your Target Markets ... 4

Conduct Formal Research, in Addition to Other Tactics, to Gain an Understanding of Your Target Markets’ Business Needs ... 6

Proactively Tap Your Network and Current Clients to Create Referrals for New Business ... 7

Use Content That Is Relevant (Focused on the Business Issues), Provides Proof Points, and Builds Credibility ... 8

Use Offers and Live Experiences to Generate Leads ... 9

Use the Two Most Effective Lead Generation Tactics: Presenting at Events and Making ―Warm‖ Phone Calls ... 10

Employ Dedicated Salespeople, in Addition to ―Seller-Doers,‖ to Sell Your Company’s Services and Solutions ... 11

Measure Your Progress at Each Stage of the Sales Pipeline, in Addition to the Pipeline Inputs and Outputs ... 12

Appendix: Table of Contents for Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline ... 13

List of Tables ... 14

List of Figures ... 18

L I S T O F F I G U R E S

Figure 1. Some companies are performing well, increasing both revenue and profitability ... 2

Figure 2. Less than half of the companies rate their ability to generate leads as either good or excellent ... 3

Figure 3. Company Business Performance and Ability to Generate Leads ... 3

Figure 4. High performers segment based on deep knowledge of their target markets ... 5

Figure 5. High performers conduct formal research to gain an understanding of their target markets’ business needs ... 6

Figure 6. High performers proactively tap their network and current clients to create referrals for new business ... 7

Figure 7. High performers use content that is relevant (focused on the business issues), provides proof points, and builds credibility ... 8

Figure 8. High performers use offers and live experiences to generate leads ... 9

Figure 9. High performers use the two most effective lead generation tactics—presenting thought leadership at events and making ―warm‖ phone calls ... 10

Figure 10. High performers employ dedicated salespeople in addition to ―seller-doers,‖ to sell their company’s services and solutions ... 11

Figure 11. High performers measure progress at each stage of the sales pipeline in addition to the pipeline inputs and outputs ... 12

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Foreword

How to Use This Report

“I notice increasing reluctance on the part of executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support rather than for illumination.”

David Ogilvy, Advertising Icon As we compiled the results from our survey of more than

850 respondents at professional and technology services companies, one observation stood out: not all lead generation tactics work for everyone, yet every tactic (even television advertising) works for some companies, although sometimes only for a select few. Moreover, the chosen tactics will only be effective if there is thoughtful strategy behind them, as well as relevant content, based on deep knowledge of the target audience. Professional and technology services companies will have a better chance of meeting their marketing and sales objectives if they create an integrated plan based on strategy, content, and tactics.

Your challenge, of course, is to understand the landscape of possibilities to choose the best tactics that will work for you. This report will not provide the silver bullet for your lead generation challenges, but it most certainly will provide you great illumination into the following:

 Why some companies succeed in lead generation and others don’t

 What best practices are common among the most successful

 How your organization stacks up against your peers As you study this report, keep in mind that every approach has the potential to be effective … in the right situation. Review the content, offers, channels, and tactics respondents say have been successful, and then ask yourself the following questions:

 Does this sound right for my target audience?  Will my prospects come to an event (or read a white

paper or respond to my direct mail efforts)?  Do I know who our targets are and how to reach

them (names, email addresses, and phone numbers)?

 Do I understand my target audience’s industry and specific business issues?

If you can answer those questions with a yes, next ask:  Do I know what the objective is if we implement this tactic (e.g., increase brand awareness, cross-/up-sell to existing clients, nurture leads)?

 Can we do this well based on our skills, knowledge, and experience?

 Will we consistently pursue this long enough to be successful?

If you can again answer yes to those questions, then go ahead and test those tactics, measure your results, and continue to tweak and improve. (If you can’t implement a tactic well, find someone who can do it for you or learn how to do it well!)

You also have to take into account where in the buying cycle your target buyer is. Different content and tactics are effective at different stages of the buying cycle.

Then, no matter what you choose, you have to continue to measure to ensure that the strategies chosen are effective and that you’re doing them well.

Remember, there always needs to be a strategy and good content behind the tactics. Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline will provide you the illumination (and even some support) to develop a solid road map for your lead generation success.

Definition of Lead Generation

For the purposes of this survey, we are defining lead generation as:

Finding prospects and building relationships with them to develop potential new business opportunities, or leads, for your services.

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Executive Summary

Marketers’ priorities are changing. Lead generation has risen to the top of technology and professional services marketers’ priority lists (preceded only by enabling sales) as companies struggle to compete in a crowded market and gain the attention of busy buyers. Some companies are doing very well; they are filling their pipelines with quality leads and experiencing growth. Others are struggling. Why are some technology and professional services

companies succeeding while others are

languishing?

Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, based on research

conducted by ITSMA in partnership with RainToday.com, examines the lead generation practices of professional services companies and identifies the best practices that drive superior business performance.

Methodology

In March and April 2010, ITSMA and

RainToday.com conducted a Web-based survey

on B2B services lead generation practices—how companies find prospective buyers and create interest in their services and solutions. We surveyed 859 professionals at companies that sell various B2B services. These respondents represented companies of all sizes, ranging from less than $1 million to more than $20 billion in annual services revenue. They also represented 16 vertical markets, including management consulting; marketing, PR, or advertising services; IT professional services/consulting; architecture/ engineering construction services; accounting, tax, payroll, or bookkeeping services; training/executive education; software solutions; and more.

Uncovering the Standout

Performers

In good times and bad, company performance can be mixed. In the last fiscal year, we found that some companies did quite well, increasing both revenue and profitability (Figure 1).

Figure 1. Some companies are performing well, increasing both revenue and profitability

Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

In your last fiscal year, how did your B2B services organization perform in the following areas: % of Respondents

Compared to the past three years our PROFITABILITY was… (N=725)

Compared to the past three years our REVENUE GROWTH was… (N=816) 14.2 17.3 18.3 18.8 32.0 29.3 22.6 22.4 12.8 12.3 Signif icantly worse (decreased by 20% of more) Somewhat worse (decreased by 5–19%) About the same (decreased or increased 5% or less) Somewhat better (increased by 5–19%) Signif icantly better (increased by 20% or more)

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Among respondents, 34.7% reported that their profitability, compared to the past three years, was either somewhat or significantly better. Another 35.4% reported their revenue growth was better as well. Who are these companies, and what are they doing differently to achieve such stellar performance? At the outset, we hypothesized there would be a positive correlation with the ability of these companies to generate leads. Our hypotheses proved to be true. A higher percentage of companies that improved their revenue and profitability also reported good or excellent ability to generate leads. Some companies hit the trifecta: increased revenue growth, increased profitability, and excellent or good ability to generate leads.

What differentiates these high performers from the rest?

Figure 2. Less than half of the companies

rate their ability to generate leads as

either good or excellent

Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

To find out, we divided the respondents into three groups based on business performance and ability to generate leads:

 High performers: Increased revenue and

profitability growth and had excellent or good ability to generate leads

 Below average performers: Decreased

revenue and profitability growth and had fair or poor ability to generate leads

 Average performers: Everyone else

Based on this classification, 15.0% of the study respondents earned high performer status. The majority of respondents fell into the middle, with 66.6% labeled as average performers (Figure 3).

The remaining 18.4% of respondents were below average performers.

Figure 3. Company Business Performance

and Ability to Generate Leads

Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

Lead Generation Best Practices

Based on the 2010 ITSMA and RainToday.com

Lead Generation Survey data, we have identified a

number of characteristics of best-practice companies. The most significant best practices are highlighted in this Executive Summary. (For a more in-depth description of best practices, please refer to the full report.)

High performing technology and professional services companies:

 Segment based on deep knowledge of their target markets

 Conduct formal research, in addition to other tactics, to gain an understanding of their target markets’ business needs

 Proactively tap their network and current clients to create referrals for new business

 Use content that is relevant (focused on the business issues), provides proof points, and builds credibility

 Use offers and ―live‖ experiences to generate leads

Overall, how would you rate your company’s ability to generate leads?

% of Respondents (N=859) 14.4 43.0 35.2 7.5 Excellent Good Fair Poor Below Average Perf ormers (18.4%)

Average Perf ormers (66.6%)

High Perf ormers (15.0%)

Company Business Performance and Ability to Generate Leads % of Respondents (N=721)

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 Use the two most effective lead generation tactics: presenting at events and making ―warm‖ phone calls

 Employ dedicated salespeople, in addition to ―seller-doers,‖ to sell their company’s services and solutions

 Measure their progress at each stage of the sales pipeline, in addition to the pipeline inputs (number of leads generated) and outputs (closed deals and revenue)

ITSMA and RainToday.com recommend that service companies wishing to achieve high performer status and results implement the following practices.

Segment Based on Deep Knowledge of

Your Target Markets

No matter its size, any company has the potential to be well known in its target markets. The first step is to properly define the target markets and then properly segment them. Fortunately, most companies agree that segmentation is important to their lead generation programs.

This segmentation needs to be based on deep knowledge of the target markets, specifically:

 The composition of the target markets.

Companies must know the general profile of their target markets, the names of the

organizations they should be targeting, the titles of the decision makers, and, most important, the actual names of the decision makers.

 The business and company-specific issues of the target audiences. Companies must

also be knowledgeable about their target audiences’ industries, business processes, and specific business issues at the organizational and individual levels.

The more knowledge a company has, the better it will be at creating relevant value propositions that capture attention.

Our research shows that the high performers are doing a better job at segmenting and understanding their target markets. They are more knowledgeable about who they should be targeting and their target markets’ industry and business issues compared to the other companies (Figure 4).

When it comes to lead generation, marketing’s goal is to build contact databases, nurture relationships, and establish credibility with regard to its company’s value proposition and track record. To do this, marketing needs to do its homework.

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Figure 4. High performers segment based on deep knowledge of their target markets

Note: Mean rating is based on a 5-point scale, where 1=very weak and 5=very strong. * Indicates differences are statistically significant. Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

Target markets' industry

Target markets' particular business processes

Individual organization's business issues

Individual decision maker's business issues In terms of the general profile of our target markets (best industry, geography, size, other general characteristics) In terms of the actual names of the

organizations we should target

In terms of the actual titles of decision makers within the target organizations

In terms of the actual names of decision

makers within the target organizations

4.1* 3.8* 3.8* 3.4* 3.8* 3.3* 3.3* 2.7* High Perf ormers (N~105)

Below Average and Average Perf ormers (N~599)

4.4* 4.2* 3.9* 3.7* 3.8* 3.6* 3.3* 3.0* High Perf ormers (N~24)

Below Average and Average Perf ormers (N~79) How strong is your company’s knowledge of its target markets? Mean Rating

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Conduct Formal Research, in Addition

to Other Tactics, to Gain an

Understanding of Your Target Markets’

Business Needs

To gain the necessary knowledge about target markets, the majority of companies are using industry-focused activities, such as joining

professional associations and industry

organizations, subscribing to on- and offline industry publications, and attending industry conferences.

However, high performers are taking it a step further and doing formal research. Specifically, 43.3% of the high performing companies conduct formal research studies on buyer wants and needs compared to only 15.1% of the below average performers and 27.1% of the average performers (Figure 5).

Additionally, more of the high performers are getting closer to their prospects and clients by creating their own on- and offline communities, which is a highly effective way to learn about prospects’ and clients’ business needs.

Figure 5. High performers conduct formal research to gain an understanding of their target

markets’ business needs

Note: Multiple responses allowed. Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

3.0 28.1 29.5 32.3 35.3 38.8 39.5 54.4 57.0 62.4 69.1 73.8 Below Average Performers Average Performers High Performers N=126 N=473 N=104 15.1 27.1 43.3

Differences are statistically significant.

What steps does your company take to better identify and understand the business needs of your target audience? % of Respondents (N=833)

Join prof essional associations and industry organizations

Attend industry conf erences

Actively participate in industry associations

Collect and organize buyer f eedback f rom partners/sales/business development Join online industry- or solution-f ocused

communities Subscribe to third-party sources of

inf ormation Actively participate in industry- or solution-f ocused communities

Conduct secondary research studies

Create your own on- and of f line communities Conduct f ormal primary research studies

on buyer wants and needs

Other Subscribe to on- and of f line industry publications, as well as industry blogs, RSS f eeds, etc.

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Proactively Tap Your Network and

Current Clients to Create Referrals for

New Business

We asked respondents to consider the past two years of lead generation at their companies—all of the ways they contact prospects, establish brand awareness, create thought leadership, publicize, network, and make offers. Then based on what they know about the sources of their company’s leads, we asked for the top three vehicles that generated quality leads.

About 58% of respondents reported that referrals are the best source of leads. This makes sense

based on how buyers buy—through

recommendations from their professional peers. According to both ITSMA’s How Customers Choose Solution Providers Study and RainToday.com’s How Clients Buy, potential

buyers rely on their colleagues and peers to point them to alternative solution providers; nothing else comes close.

Nearly all the companies that participated in the survey are using their network and current clients to create referrals, but the high performers are simply better at it. Specifically, they are more proactive when it comes to asking people in their own network for new work, as well as at asking their current clients for internal referrals (Figure 6).

Figure 6. High performers proactively tap their network and current clients to create

referrals for new business

Note: Mean rating is based on a 5-point scale where 1=not at all effective and 5=extremely effective.

ab_{Indicates differences are statistically significant.}

Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

We ask other people in our network

(e.g., past clients, other types of professionals, alumni, f riends of the f irm, and so on) f or ref errals f or new work

We ask our clients to send us ref errals f or new work f rom other decision makers or

departments at their company

We ask our clients to send us ref errals f or new work f rom people they know

that work at other companies

3.4 3.2 3.0 3.1 2.9 2.8 2.9 2.7 2.6

High Perf ormers (N~82) Average Perf ormers (N~324) Below Average Perf ormers (N~90) How effective have these been in proactively creating referrals for new business/leads? Mean Rating ab a b a a

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Use Content That Is Relevant (Focused

on the Business Issues), Provides

Proof Points, and Builds Credibility

Again from both ITSMA’s How Customers Choose Solution Providers Study and RainToday.com’s How Clients Buy research, we know that buyers

are looking for relevant, personalized content, as well as proof that the company will deliver as promised. It is good to see that the services providers included in this study are in alignment with the buyers. Most companies recognize that

the most effective content is high on relevancy and proof points. This includes content that is 100% focused on individual prospects’ situation, client testimonials, and client case studies (Figure 7).

The high performing companies identify a larger range of content types that are effective to generate leads. In fact, 7 out of the 10 content types we asked about were rated a 3.5 or above on a 5-point effectiveness scale. Companies with a range of content types are better able to meet the needs of buyers in different stages of the buying cycle.

Figure 7. High performers use content that is relevant (focused on the business issues),

provides proof points, and builds credibility

Note: Effective types of content are those with an effectiveness rating of 3.5 and above on a 5-point scale. Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

High Performers Average Performers Below Average Performers

Content 100% f ocused on individual prospect's specific situation

Client testimonials Client testimonials Client testimonials

Client case studies and success stories

Best-practice methodology based on our company's area of

expertise

Best-practice methodology based on our company's area of

expertise Insight into emerging business

issues and market trends Insight on the application of technology to solve business problems

How-to tips, tactics, and advice

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Use Offers and Live Experiences to

Generate Leads

Once a company creates the necessary lead generation content, the most effective way to showcase its knowledge and insight is through live experiences. Think of live experiences as the equivalent of a product’s ―free sample.‖ For high performers, live experiences include in-person events and consultative sales calls. Articles or white papers authored by company experts are also effective for high performers.

Comparing the most effective offers across companies by business performance, we were surprised to see that the average and below average performers don’t even have one offer rated high enough to make the list (Figure 8). It is likely that that the average and below average performers, unlike the high performers, lack the right content behind their offers. It is the combination of the offer and the content that leads to superior results.

Figure 8. High performers use offers and live experiences to generate leads

Note: Effective offers are those with an effectiveness rating of 3.5 and above on a 5-point scale. Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

High Performers Average Performers Below Average Performers

In-person conf erences and seminars (produced by our company)

None None

In-person conf erences and seminars (produced by a third-party; we are a sponsor or speaker)

Introductory/consultative sales call

Articles or white papers authored by experts in our company

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Use the Two Most Effective Lead

Generation Tactics: Presenting at Events

and Making “Warm” Phone Calls

As we stated at the outset of this report, there is no silver bullet to generate leads. It is the combination of tactics, orchestrated as part of a multimodal, multitouch program that yields the best results. It takes careful planning and experimentation to get the mix, timing, and messaging right. That said, most companies do not have unlimited time or resources. Most need a place to start. Based on the analysis of the data by performance, two tactics stand out: speaking engagements and ―warm‖ phone calls (Figure 9). Therefore, at the very least, companies should be:

 Actively managing a speaker program that gets the company thought leaders in front of prospects

 Creating the air cover to build brand awareness and familiarity to ―warm‖ prospects

Presentations and speaking engagements at events can stand on their own. However, making warm phone calls is a two-step process:

 “Warm” the prospect. Through lead nurturing,

marketing progressively builds a relationship with the prospect through multiple touches that build awareness, stimulate interest and educate, identify needs, and engage the prospect in an ongoing dialogue. The best ways to nurture and educate prospects is through the offers mentioned earlier: the

in-person events, articles and white papers, online seminars, and company-conducted research reports. Of course, it is critical to use relevant content, targeted value propositions, and proof points to substantiate claims in these offers. Such offers introduce the company to potential buyers and demonstrate the company’s thought leadership and insight.

 Follow up with the prospect. There could be

two scenarios for following up with a prospect. One is marketing (telemarketing or inside sales) makes a ―warm‖ phone call to further nurture and qualify a lead. In the other scenario, sales makes a ―warm‖ phone call to a ―sales-ready‖ lead, previously handed over to sales by marketing.

Lead nurturing is one of the strongest ways to reduce the effort and cost of moving a prospect through the sales funnel. The sales process is labor-intensive and sales resources are expensive. Although marketing will never replace sales, it can replace certain steps in the sales process (e.g., lead nurturing), thus freeing sales to be more productive and allowing sales to engage with buyers when they are further along the sales funnel and more likely to purchase.

Research from CSO Insights has also shown that when salespeople receive nurtured leads, more of them will meet their quotas, conversion rates and win rates will increase, and the sales cycle will be shorter.

Figure 9. High performers use the two most effective lead generation tactics—presenting

thought leadership at events and making “warm” phone calls

OFFERS

Presenting/ Speaking at Events

Relevant Content

In-person events (produced by your company or a third-party)

“Warm” Phone Calls Articles or white papers

Online seminars

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Employ Dedicated Salespeople, in

Addition to “Seller-Doers,” to Sell Your

Company’s Services and Solutions

Not all professional services companies have dedicated professional sales forces. Instead, they rely on partners, or ―seller-doers‖ to bring in new business and grow existing relationships.

However, the research shows that many more of the high performing companies have staff dedicated to selling services and solutions compared to the below average performing

companies: 70.4% compared to 41.2%,

respectively (Figure 10). These dedicated sales

resources appear to give the high performers a leg up on the competition. Of course, marketing, sales, partners, company leaders, and other customer-facing employees must work together to reach the company’s lead generation goals. Nevertheless, professional salespeople are especially important to this process due to their focus, training, and drive. Over time, they hold the lion’s share of knowledge about the market and the company’s clients. They are also the ones delivering the company’s messages and value propositions directly to the individual buyers.

Figure 10. High performers employ dedicated salespeople in addition to “seller-doers,” to

sell their company’s services and solutions

Note: Differences are statistically significant. Source: ITSMA and RainToday.com Lead Generation Benchmark Report: How the Best Firms Fill the Pipeline, November 2010

70.4 58.2 41.2 29.6 41.3 58.8 0.4

Yes No Don't know

Do you have staff dedicated to selling your services and solutions (i.e., professional salespeople or business developers)? % of Respondents

High Perf ormers (N=108) Average Perf ormers (N=479) Below Average Perf ormers (N=131)

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Measure Your Progress at Each Stage

of the Sales Pipeline, in Addition to the

Pipeline Inputs and Outputs

During the lead generation process, metrics are essential to know what is and what isn’t working. Marketers have to be able to track and measure the results of their activities, as well as the metrics at the different stages of the sales pipeline. But most marketers hand leads off to sales and have no way of knowing what happens from that point on.

According to the survey results, a good number of companies are simply measuring the inputs and outputs of the sales pipeline, specifically, the number of qualified leads (input), the number of closed deals/bookings (output), and/or revenue growth (output) (Figure 11). Few are measuring

lead progress through the sales pipeline, such as pipeline contribution, sales lead acceptance rates, and lead conversion rates.

However, more of the high performers are measuring these progression metrics, pipeline contribution and campaign response rates in particular.

To effectively measure marketing’s activities, companies must have in place a closed-loop system for lead generation, lead nurturing, and sales. Further, tracking leads and marketing activities in spreadsheets just won’t cut it anymore. Marketing automation systems will allow marketing to better track leads, find the optimal marketing mix, and decrease the probability that leads will fall through the cracks.

Figure 11. High performers measure progress at each stage of the sales pipeline in

addition to the pipeline inputs and outputs

Note: Multiple responses allowed.

Red italicized metrics are pipeline progression metrics. Blue underlined metrics are inputs. Black metrics are outputs. Other includes: Comparison of channels—how many customers and how much business from each channel; Cost of long term client retention; Customer lifetime value is calculated separately for all clients; Length of time at each lead stage; Marketing ROI = Value of Closed Deals/Marketing Cost; Number and quality of referrals made by referral sources; Number of referrals; Opt in registrations on the website and upgrades to different membership levels; Revenue generated from closed leads; ROMI by campaign /programme; Win rate.

What metrics do you regularly use to measure the success of lead generation activities? % of Respondents (N~691) 1.6 15.1 19.4 24.3 26.0 27.5 28.8 30.4 31.1 32.9 36.0 42.8 43.8 47.8 51.5 54.0 62.7 68.3

Number of qualif ied leads

Number of closed deals/bookings Revenue growth

Number of opportunities generated Number of leads Quality of leads

Lead conversion rates Campaign response rates Leads by marketing tactic

Total prof it generated

Cost per lead

Additional revenue f rom existing customers

Sales lead acceptance rates

Number of inbound inquiries

Pipeline contribution

Lif etime value of customers acquired Cost per customer acquired Other Below Average Performers Average Performers High Performers N=101 N=402 N=89 19.8 23.1 38.2

Differences are statistically significant.

Below Average Performers Average Performers High Performers N=101 N=402 N=89 25.7 38.1 42.7

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Appendix: Table of Contents for Lead

Generation Benchmark Report: How the

Best Firms Fill the Pipeline

PAGE

Foreword ... 1

How to Use This Report ... 1

Definition of Lead Generation ... 1

Executive Summary ... 2

Methodology ... 2

Uncovering the Standout Performers... 2

Lead Generation Best Practices ... 3

Segment Based on Deep Knowledge of Your Target Markets ... 4

Conduct Formal Research, in Addition to Other Tactics, to Gain an Understanding of Your Target Markets’ Business Needs ... 6

Proactively Tap Your Network and Current Clients to Create Referrals for New Business ... 7

Use Content That Is Relevant (Focused on the Business Issues), Provides Proof Points, and Builds Credibility ... 8

Use Offers and Live Experiences to Generate Leads ... 9

Use the Two Most Effective Lead Generation Tactics: Presenting at Events and Making ―Warm‖ Phone Calls ... 10

Employ Dedicated Salespeople, in Addition to ―Seller-Doers,‖ to Sell Your Company’s Services and Solutions ... 11

Measure Your Progress at Each Stage of the Sales Pipeline, in Addition to the Pipeline Inputs and Outputs ... 12

Chapter 1. Meeting the Lead Generation Challenge ... 13

Lead Generation Competitive Environment ... 13

Top Lead Generation Challenge ... 16

Companies’ Performance in the Competitive Environment ... 17

Three Groups by Company Performance ... 18

Chapter 2. First Step: Segmentation and Targeting ... 23

Defining and Segmenting Target Markets ... 23

Basis of Segmentation: Deep Knowledge of the Target Markets ... 24

Steps Taken to Gain the Necessary Knowledge ... 28

Chapter 3. Using Referrals to Generate Leads ... 31

Top Way to Generate Leads ... 31

Sources for Referrals ... 32

Chapter 4. Most Effective Types of Content and Offers ... 35

Types of Content Used ... 35

Most Effective Types of Content ... 36

Types of Offers Used ... 39

Most Effective Offers ... 40

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Use of Social Media Channels ... 44

Changes in the Tactics Used ... 47

Effectiveness of Lead Generation Tactics ... 48

No Silver Bullet, But Some Tactics Come Close ... 49

Chapter 6. Staffing for Lead Generation ... 53

Chapter 7. Lead Generation Measurement ... 56

Lead Generation Metrics ... 56

Appendix A. Additional Top-Line Results ... 59

Sales and Marketing Budgets... 59

Challenges ... 61

Lead Generation Budget ... 63

Other Top Ways to Generate Leads ... 63

Other Ways to Proactively Create Referrals ... 66

Online and Offline Lead Generation Tactics ... 67

The $200,000 Question ... 79

Use of External Resources ... 81

Target Market ... 82

Appendix B. Methodology and Respondent Demographics ... 85

Methodology ... 85

Data Collection... 85

Data Analysis ... 85

Appendix C. Company Performance Index ... 92

Appendix D. 2007 vs. 2010 Respondent Demographics ... 98

Appendix E. Crosstabs by Company Size ... 102

Appendix F. Crosstabs by Industry ... 134

Appendix G. Crosstabs by Company Performance ... 206

Appendix H. Definitions and Full Descriptions ... 244

Lead Generation Definition ... 244

Company Definition ... 244

Full Descriptions of Industry Sectors ... 244

Full Descriptions of Types of Content ... 244

Full Descriptions of Offers ... 244

Full Descriptions of Online Tactics ... 245

About ITSMA and RainToday.com... 246

About ITSMA... 246

About RainToday.com ... 246

List of Tables

Table 1.1. Size of Sales Budget by Company Size ... 20

Table 1.2. Size of Marketing Budget by Company Size ... 20

Table 1.3. Size of Sales Budget by Industry ... 21

Table 1.4. Size of Marketing Budget by Industry ... 22

Table 2.1. Steps Taken to Identify Business Needs of Target Market by Company Performance ... 29

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Table 2.4. Strength of Company’s Knowledge of Its Target Market by Company Size ... 30

Table 5.1. Tactics Used to Generate Leads by Company Size ... 45

Table 5.2. Tactics Used to Generate Leads by Company Performance ... 46

Table 7.1. Metrics Used to Measure Lead Generation Success by Company Performance ... 58

Table A1. Other Challenges ... 61

Table A2. Other Top Ways to Generate Leads ... 63

Table A3. Other Ways to Proactively Create Referrals for New Business ... 66

Table A4. Top Tactics Used by Industry... 74

Table A5. Top Tactics Used by Reputation ... 76

Table A6. Top Tactics Used by Company Size ... 77

Table A7. Top Tactics Used by Ability to Generate Leads ... 78

Table A8. Top Tactics Used by Company Performance ... 78

Table A9. Other Ways to Use Additional Funding for Lead Generation Efforts ... 79

Table A10. Other Target Industries... 84

Table B1. Other Industry Sectors ... 88

Table C1. Region by Company Performance ... 96

Table D1. Industry Sector ... 99

Table E1. Company Type by Company Size ... 102

Table E2. Type of Business by Company Size ... 102

Table E3. Industry Sector by Company Size ... 103

Table E4. Functional Area by Company Size ... 104

Table E5. Job Role by Company Size ... 104

Table E6. Region by Company Size ... 105

Table E7. Number of Full-Time Employees by Company Size ... 105

Table E8. Dedicated Sales Staff by Company Size ... 106

Table E9. Company’s Reputation by Company Size ... 106

Table E10. Profitability and Revenue Growth by Company Size ... 107

Table E11. Profitability and Revenue Growth (Condensed) by Company Size ... 108

Table E12. Size of Sales Budget by Company Size ... 109

Table E13. Size of Marketing Budget by Company Size ... 109

Table E14. People Expected to Generate Leads by Company Size ... 110

Table E15. Ability to Generate Leads by Company Size ... 110

Table E16. Lead Generation Challenges by Company Size ... 111

Table E17. New Clients vs. Existing Clients by Company Size... 112

Table E18. Change in Lead Generation Budget by Company Size ... 112

Table E19. Importance of Market Segmentation by Company Size ... 112

Table E20. Segmentation of Target Markets by Company Size ... 113

Table E21. Segmentation Basis by Company Size ... 113

Table E22. Steps Taken to Identify Business Needs by Company Size ... 114

Table E23. Strength of Company’s Knowledge of its Target Markets by Company Size ... 115

Table E24. Strength of Company’s Knowledge of Target Markets’ Business Issues by Company Size ... 115

Table E25. Proactively Create Referrals by Company Size ... 116

Table E26. Effectiveness of Creating Referrals by Company Size ... 116

Table E27. Types of Content Used to Generate Leads by Company Size ... 117

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Table E29. Offers Used to Generate Leads by Company Size ... 119

Table E30. Effectiveness of Offers Used by Company Size... 120

Table E31. Online Tactics Used to Generate Leads by Company Size ... 121

Table E32. Effectiveness of Online Tactics Used by Company Size ... 122

Table E33. Offline Tactics Used to Generate Leads by Company Size ... 123

Table E34. Effectiveness of Offline Tactics Used by Company Size ... 124

Table E35. Other Tactics and Strategies Used to Generate Leads by Company Size ... 125

Table E36. Effectiveness of Other Tactics and Strategies Used by Company Size ... 126

Table E37. Tactics Used by Company Size ... 127

Table E38. Metrics Used by Company Size ... 128

Table E39. Most Important Metrics by Company Size ... 129

Table E40. Use of External Resources by Company Size ... 130

Table E41. Target Markets’ Titles by Company Size ... 131

Table E42. Target Markets’ Size by Company Size ... 131

Table E43. Target Markets’ Location in Relation to Company by Company Size ... 132

Table E44. Target Markets’ Industry by Company Size ... 133

Table F1. Company Type by Industry ... 134

Table F2. Type of Business by Industry ... 135

Table F3. Functional Area by Industry ... 136

Table F4. Job Role by Industry ... 137

Table F5. Region by Industry ... 138

Table F6. Annual Services Revenue by Industry ... 139

Table F7. Annual Services Revenue (Condensed) by Industry ... 140

Table F8. Dedicated Sales Staff by Industry ... 141

Table F9. Number of Full-Time Employees by Industry ... 142

Table F10. Company’s Reputation by Industry ... 143

Table F11. Profitability and Revenue Growth by Industry ... 144

Table F12. Size of Sales Budget by Industry ... 148

Table F13. Size of Marketing Budget by Industry ... 149

Table F14. People Expected to Generate Leads by Industry ... 150

Table F15. Ability to Generate Leads by Industry ... 151

Table F16. Lead Generation Challenges by Industry ... 152

Table F17. New Clients vs. Existing Clients by Industry ... 154

Table F18. Change in Lead Generation Budget by Industry ... 155

Table F19. Importance of Market Segmentation by Industry ... 156

Table F20. Segmentation of Target Markets by Industry ... 156

Table F21. Segmentation Basis by Industry ... 157

Table F22. Steps Taken to Identify Business Needs by Industry ... 158

Table F23. Strength of Company’s Knowledge of its Target Markets by Industry ... 160

Table F24. Strength of Company’s Knowledge of Target Markets’ Business Issues by Industry ... 162

Table F25. Proactively Create Referrals by Industry ... 163

Table F26. Effectiveness of Creating Referrals by Industry ... 164

Table F27. Types of Content Used to Generate Leads by Industry ... 165

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Table F30. Effectiveness of Offers Used by Industry ... 173

Table F31. Online Tactics Used to Generate Leads by Industry ... 177

Table F32. Effectiveness of Online Tactics Used by Industry ... 180

Table F33. Offline Tactics Used to Generate Leads by Industry ... 184

Table F34. Effectiveness of Offline Tactics Used by Industry ... 186

Table F35. Other Tactics and Strategies Used to Generate Leads by Industry ... 189

Table F36. Effectiveness of Other Tactics and Strategies Used by Industry ... 191

Table F37. Tactics Used by Industry ... 193

Table F38. Metrics Used by Industry ... 195

Table F39. Most Important Metrics by Industry ... 197

Table F40. Use of External Resources by Industry ... 199

Table F41. Target Markets’ Titles by Industry ... 201

Table F42. Target Markets’ Size by Industry ... 202

Table F43. Target Markets’ Location in Relation to Company by Industry ... 203

Table F44. Target Markets’ Industry by Industry ... 204

Table G1. Company Type by Company Performance ... 206

Table G2. Type of Business by Company Performance ... 206

Table G3. Industry Sector by Company Performance ... 207

Table G4. Industry Sector (Condensed) by Company Performance ... 208

Table G5. Functional Area by Company Performance ... 209

Table G6. Job Role by Company Performance ... 209

Table G7. Region by Company Performance ... 210

Table G8. Annual Services Revenue by Company Performance ... 210

Table G9. Annual Services Revenue (Condensed) by Company Performance ... 211

Table G10. Number of Full-Time Employees by Company Performance ... 211

Table G11. Dedicated Sales Staff by Company Performance ... 212

Table G12. Company’s Reputation by Company Performance ... 212

Table G13. Size of Sales Budget by Company Performance ... 213

Table G14. Size of Marketing Budget by Company Performance ... 213

Table G15. People Expected to Generate Leads by Company Performance ... 214

Table G16. People Expected to Generate Leads—Those With and Without Dedicated Sales Staff by Company Performance ... 215

Table G17. Lead Generation Challenges by Company Performance ... 216

Table G18. New Clients vs. Existing Clients by Company Performance ... 217

Table G19. Change in Lead Generation Budget by Company Performance ... 217

Table G20. Importance of Market Segmentation by Company Performance ... 217

Table G21. Segmentation of Target Markets by Company Performance ... 218

Table G22. Segmentation Basis by Company Performance ... 218

Table G23. Steps Taken to Identify Business Needs by Company Performance ... 219

Table G24. Strength of Company’s Knowledge of its Target Markets by Company Performance... 220

Table G25. Strength of Company’s Knowledge of Target Markets’ Business Issues by Company Performance ... 220

Table G26. Strength of Company’s Knowledge of Target Markets’ Business Issues (Below Average and Average Combined) by Company Performance ... 221

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Table G28. Effectiveness of Creating Referrals by Company Performance ... 222

Table G29. Types of Content Used to Generate Leads by Company Performance ... 223

Table G30. Effectiveness of Types of Content Used by Company Performance ... 224

Table G31. Effectiveness of Types of Content Used: Top Box Scores by Company Performance ... 225

Table G32. Offers Used to Generate Leads by Company Performance ... 226

Table G33. Effectiveness of Offers Used by Company Performance ... 227

Table G34. Effectiveness of Offers Used: Top Box Scores by Company Performance ... 228

Table G35. Online Tactics Used to Generate Leads by Company Performance ... 229

Table G36. Effectiveness of Online Tactics Used by Company Performance ... 230

Table G37. Effectiveness of Online Tactics Used: Top Box Scores by Company Performance ... 231

Table G38. Offline Tactics Used to Generate Leads by Company Performance ... 232

Table G39. Effectiveness of Offline Tactics Used by Company Performance ... 233

Table G40. Effectiveness of Offline Tactics Used: Top Box Scores by Company Performance ... 234

Table G41. Other Tactics and Strategies Used to Generate Leads by Company Performance ... 234

Table G42. Effectiveness of Other Tactics and Strategies Used by Company Performance ... 235

Table G43. Effectiveness of Other Tactics and Strategies Used: Top Box Scores by Company Performance ... 236

Table G44. Tactics Used by Company Performance ... 237

Table G45. Metrics Used by Company Performance... 238

Table G46. Most Important Metrics by Company Performance ... 239

Table G47. Use of External Resources by Company Performance... 240

Table G48. Target Markets’ Titles by Company Performance ... 241

Table G49. Target Markets’ Size by Company Performance ... 241

Table G50. Target Markets’ Location in Relation to Company by Company Performance ... 242

Table G51. Target Markets’ Industry by Company Performance ... 243

List of Figures