Lead Gen Overhaul: 4 Strategies to Boost Response Rates, Reduce Cost-per-Lead

CHALLENGE

Like most marketers, Dave Laverty, VP Marketing, IBM Cognos, was experiencing changes in the B2B lead-generation landscape. Factors, such as lengthening sales cycles and expanding buying committees, were making traditional tactics less effective at generating demand for the company’s business-intelligence software.

Rented email lists weren’t performing as well as they used to. The company’s house email list was being bombarded with offers, and as a result, open and clickthrough rates were dropping. Laverty and his team needed to work differently.

"A couple years ago, we took on an initiative we called Marketing 2.0," says Laverty. "It was a challenge I gave to our Web team to think about how we reach, engage and deliver more information to prospects that could be out there that we hadn’t touched yet."

CAMPAIGN

The team’s Marketing 2.0 initiative examined their marketing strategy in the context of three major goals:
- Presenting the company as a thought-leader
- Generating demand
- Supporting and enabling the sales team

They saw a lead-nurturing strategy as the common thread connecting those three goals, and developed a new process to shape outreach efforts, engage prospects, and qualify them for the sales team.

Here are four key strategies they used to refine their lead-nurturing process:

Strategy #1. Revamp website with additional offers

Laverty and his team first examined how well their website functioned as an entry point into the lead-nurturing funnel.

"We looked at [our website] as a demand-generating tool," says Laverty. "We have a lot of people passing by our window, so to speak. What are we doing to encourage those people to come in, browse and engage with us?"

With engagement in mind, the team overhauled its website to provide additional offers and features for prospects. Their goal was to appeal to a wide range of prospects and to determine which types of offers or content strategies created the most interest.

The result was a site that included:

- Varying types of content, such as:
o White papers
o Online demos
o Events
o Online communities

- Information organized by product line or business task, such as:
o Performance management
o Budgeting and forecasting
o Measurement and reporting
o Scorecarding

- Information organized by industry, such as:
o Finance
o Government
o Retail
o Manufacturing
o Health care

Prospects who wanted to download content or register for events were required to fill out a Web form. That form helped establish a prospect profile.

Key fields included:
o Name
o Company
o Industry
o Department
o Job title

Strategy #2. Create lead-nurturing program based on prospect profile

The website served as the entry point for the team’s new lead-nurturing program, which sent additional relevant offers based on the prospect’s profile and previous activity.

- Information from registration forms was sent back to the team’s central data warehouse. There, the data was analyzed for variables, such as:
o New or returning prospect?
o Frequency of visits?
o Additional contact within customer company?
o Previous actions taken?

- Each prospect then received an initial follow-up response that was relevant to the offer to which they had responded. For example, if a prospect viewed an online demo on reporting, they would receive a follow-up offer for a reporting white paper.

- Two more follow-up emails pointed prospects to additional relevant content, and invited prospects to contact a member of the sales team, or sign up for an email newsletter.

- The follow-up touches were automated to deliver a flow of offers based on three major categories:
o Key marketing program, such as promotions around an annual event, a product launch, or a campaign aimed at prospects using SAP or other software
o Key industry, such as retail or banking
o Job title targets, such as IT or line-of-business managers

- Within each of those three primary categories, the team created a custom sequence of messages that were further organized according to three major product focus areas:
o Reporting
o Scorecarding
o Planning

The result of that segmentation strategy was 1,460 unique lead nurturing paths for prospects to enter.

Strategy #3. Conduct statistical analysis of marketing interactions

To further refine their lead nurturing program, the team examined historical data for correlations among variables in the marketing cycle and their outcomes.

Working off a database of more than 200,000 marketing interactions, the team conducted a statistical analysis to help them prioritize their marketing tactics and investments.

Trends uncovered during this analysis included:

- Online demos had the highest rate of opportunity creation.
- Face-to-face events had the largest impact on increasing deal size and close rate.
- The conversion rate from lead-to-opportunity virtually died 10 days after the prospect first engaged with an offer or piece of content.

"We were finally getting some definitive answers to those questions about response rate and types of offer to provide," says Laverty. "We saw that the faster we can get someone in front of an online demo, that has the highest success rate for opportunity creation."

Strategy #4. Test response time for three-touch nurturing program

Statistical analysis gave the team a new hypothesis to test with their automated three-touch email protocol.

Historical data indicated higher lead-to-opportunity conversion rates when prospects had repeated interactions with the company within 24 hours of registration. So, the team decided to condense the time between its automated response emails.

The tested the following nurturing schedules:

- First response email -- two days vs. four hours after registration
- Second response email -- 10 days vs. 24 hours later
- Third response email -- 20 days vs. 10 days later
RESULTS

The team’s adoption and refinement of its lead-nurturing strategy has yielded dramatic results.

- Thanks to the new website, roughly 11% of website visitors now complete a registration form. That compares to an average industry capture rate of 3%.

- The team compared results from its segmented, three-touch nurturing emails to those of traditional multi-touch campaigns to the entire house list. The improvement was remarkable:
o Open rates increased from 13.2% to 33.3%
o CTR increased from 0.09% to 15.5%
o Response rate increased from 0.05% to 17.5%

- The team has reduced its cost-per-lead 30%-40%

- Better alignment between sales and marketing goals means that Laverty’s team generates 30% of the company’s pipeline per quarter.

"We’ve been able to hold our investments relatively flat, as well as increase our productivity," says Laverty. "I would say that’s a pretty big contributor to marketing having a seat at the table."

Laverty notes that the changes reflect an ongoing process that’s not yet complete. Their approach requires a series of smaller steps and tests, which can then be rolled out across the enterprise.

For example, the team adopted shortened response times for their three-touch nurturing program after testing it against their standard schedule.

The four-hour/24-hour/10-day schedule achieved:
o a 100% increase in open rate, compared to the company average
o a 1,600% increase in CTR, compared to the company average

"It’s a combination of all these things -- having the data in place, the systems in place to execute, and then staying on top of the data -- that’s turning our marketing efforts into a science."

Useful links related to this article

Creative Samples from IBM Cognos' Lead Nurturing Program
http://www.marketingsherpa.com/cs/cognos/study.html

IBM Cognos
http://www.cognos.com/