So you’ve put up a website, sent out a few press releases, done some social media marketing, maybe some PPC, SEO, etc. If your software or hardware company is more mature, you’ve done a LOT of all of these and probably a lot more in the way demand generation. Now that you’ve generated all of these “leads”, what do you do with all of them? In many cases this is the hard part and getting it right isn’t usually an instantaneous exercise. So what do you do next? It’s called “lead nurturing”…
Separate out the obvious “Hot Leads”
This is usually the easy part. It is VERY important that the Marketing and Sales departments discuss and come to a consensus on what constitutes a “hot lead”; meaning a lead that demands IMMEDIATE follow up by a skilled sales person. If your company has been in business for a while, I find that in most cases this becomes a pretty obvious exercise. If you’re just starting out, it might be a bit more of a hypothetical exercise where you use the concept of a “Prime Prospect” profile to identify incoming leads for this “hot lead” category, with the rest going into a lead nurturing campaign. This means identifying what a hot leads looks like – based upon their demographic characteristics such as age, company size, industry, business title, gender, location, etc. Regardless of what the demographic profile of your prime prospect looks like, a sense of urgency on the part of the lead inquirer themselves is almost always one of the factors identifying a hot lead.
Sort all of your leads into appropriate buckets
This sorting process is what is referred to as “lead scoring”. This lead scoring task will vary significantly based on the developmental stage of your company as well as the marketing methods that are used. If your company is a startup just embarking into sales and marketing activities with a handful of new leads, it might mean the principals of the company sitting around a table and manually sorting them into appropriate categories. This is lead scoring at its simplest. If your leads are coming from traditional/non-digital marketing methods such as trade shows or direct snail-mail, the approach probably will be similarly manual in nature. If you are relying heavily on today’s more mainstream digital marketing methods, it’s much easier to automate this process, although it usually becomes more sophisticated and complicated as well. If you’re in a more mature business and using primarily digital marketing to generate your leads, lead scoring and the entire marketing follow up process can be highly automated using marketing automation software in conjunction with website analytics. Marketing automation software tools can be very expensive and not necessarily simple to use effectively; the details of successful marketing automation will be left to another article.
Nurture Marketing: Follow up at appropriate times and intervals
So whether you are intending to follow up manually or via a sophisticated, complex marketing automation software tool, it’s important to follow up the proper number of times but also at the proper intervals. This generally means a drip email campaign, but can also include methods such as PPC remarketing. Sales and Marketing researcher The Aberdeen Group says “On average, a lead requires 10 marketing-driven ‘touches’ to convert from the top of the funnel into a paying customer.” So out of sight, out of mind. This means that it’s very important to be persistent in your lead follow up. But it’s also very possible to alienate prospects by bombarding them with messages too frequently. So start with some basic common sense about how often prospects in your customer segment will expect to be contacted, taking into account how “hot” the individual lead is. Number and interval frequency of your nurture marketing campaign is something that should be heavily tested, among other things, as discussed below.
Choose the best messaging and content for each lead category at each stage of your lead nurturing campaign
This is the area that may be the most critical part of your lead nurturing process and probably the most difficult aspect of it to optimize. That’s at least partly because the possibilities are nearly endless, limited only by your ability to create content. Various stages of lead nurturing and prospect development demand different types of stimulus and content to be effective. Below is a short list of the prospect stage matched with potentially appropriate types of content:
Leads:
Awareness and Interest Stages – Social media posts, Infographics, Blog posts, Free eBooks
Prospects:
Consideration and Intent stages – White papers, Exclusive webinars, In-depth articles, Brochures, Videos, Brand advocate testimonials
Evaluation stage – Free trials, Case studies, Free consultations, 1-1 Demos
Customers – Webinars, Less-frequent Drip email, Dedicated Customer success/Support reps
Lead Nurturing Process: test, measure, test – rinse and repeat
So you’ve now got a lead nurturing process in place, maybe simple, maybe sophisticated, depending upon your company’s developmental stage and marketing sophistication – what’s next? First of all, it’s important to know what a “good lead” is. To make that judgment you need to have metrics to measure the results of your nurture marketing. So it’s important not only to categorize leads up front, but also to measure their effect on revenue and profitability. There are many available metrics, but I’ll mention just three of the most common:
Conversion rate – There are also intermediate conversion rates (leads generated/total total traffic, for example) but at its simplest this is the ratio of leads that ultimately turn into customers divided by the total number of leads.
CPA – (cost per acquisition). This is the total number of customers generation divided by the total cost expended.
CLV – (customer lifetime value). This is a metric used most often by companies with significant repeating sales, such as SaaS subscriptions. It is most simply calculated by adding up the gross profit from all historic purchases for an individual customer. With enough historical data to average, you can use the CLV to accurately predict the CLV of future customers, which can inform your decisions on customer acquisition marketing budgets.
So the approach to optimizing lead nurturing programs is very similar to demand generation activities. Continuously test each specific lead nurturing element independently and objectively, testing against alternative options. Choose the highest performing choice for each element and set up a NEW test with a new potential alternate element. Measure the results – then start all over again. By using this method you will objectively converge on the an optimal lead nurturing campaign as quickly as possible.
That’s my basic primer on how to approach lead nurturing programs with the ultimate goal of increasing sales. This is just an overview; there are many important details to implementing a successful lead nurturing process. It’s not a monochromatic topic; there are many different “shades” of lead nurturing, especially considering the breadth of sales & marketing models that can be successfully used by hardware and software companies. Please chime in with your own experiences and tips by leaving a comment below to enhance the discussion on this important topic.
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