Secret Sauce for Revenue: A Practical Case Study

Marketo Secret Sauce for Revenue:A Practical Case Study

© 2011 Marketo, Inc.

Jon Miller, VP Marketing and Co-Founder, Marketo

Author of Modern B2B Marketing blog

http://www.marketo.com/

© 2011 Marketo, Inc. Marketo Proprietary and Confidential

Fastest Growing SaaS Company

Year 0 Year 1 Year 2 Year 3 Year 4

SalesforceSuccessFactorsOmniture NetSuiteConstant ContactTaleoMarketo

All revenue numbers normalized to Marketo Year 1


Highly Efficient Revenue Engine

• 90 cents in Marketing for every $1 in Sales• 80% of revenue directly sourced by marketing• $1.2M annual recurring revenue quota

Q3-08

Q4-08

Q1-09

Q2-09

Q3-09

Q4-09

Q1-10

Q2-10

Q3-10

Q4-10

Q1-11

Q2-11

Q3-11

Q4-11

0.00

0.50

1.00

1.50

2.00

Productivity (1-year New Customer Bookings / $M+S )


Buying Has Changed Forever

SALES REP SALES REP

BUYER

OLD DAYS: INFO SCARCITY1960s – Recent

TODAY: INFO ABUNDANCE


Marketo’s Revenue Cycle

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Opportunity

Customer

Sale

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MQLSAL

SQL

Nurturing Database

Marketing SDR

Sales



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MQLSAL

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Nurturing Database

Marketing SDR

Sales

Names are just names.



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Nurturing Database

Marketing SDR

Sales

Meaningful interaction with us.



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Marketing SDR

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Qualified, engaged potential buyers.



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Marketing SDR

Sales

Showing buying signs or significant engagement.



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Marketing SDR

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Qualified as sales-ready by a human.



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Risk Reduction

SEO

Social

Scoring

Popular Blogs Definitive GuidesResource Center Marketo TVWebinars

Benefits of Content Marketing


Early StageThought leadership and best practices to build brand and awareness

Content: When To Ask For Registration

Middle StageBuyers guides, RFP templates and industry information to help structure research

Late StageCompany-specific information to help evaluate and reaffirm selection

NO

YES

YES+ NO


Short Forms Outperform Long Forms

Short (5 fields)Conversion: 13.4%Cost per: $31.24

Medium (7 fields)Conversion: 12.0%Cost per: $34.94

Long (9 fields)Conversion: 10.0%Cost per: $41.90


Problems With Self-Submitted Data


Marketo Prospect Generation 2H2010Source Prospects Cost % Lead Velocity (Days) Lead to Opp Index

Trade Show – Virtual 3,793 $25.44 17% 81 1.03rd Party Email Blast 3,302 $34.65 18% 43 0.5Trade Show 2,703 $221.30 23% 61 1.9Paid Webinar 1,760 $68.50 21% 60 1.0PPC 990 $158.10 45% 42 1.4Content Syndication 536 $82.84 12% 59 0.3Other Paid 208 $187.50 13% 93 1.3Website 2,871 58% 27 2.6Sales Prospecting 1,888 26% 46 2.2Partner Co-Marketing 903 17% 102 1.1AppExchange 353 78% 37 3.4Referral 80 36% 12 1.0Other Inbound 370 100% 19 9.0


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LeadNurturing

Why Lead Nurturing: Stay in Touch

“The art of maintaining permission to stay in front of your buyers as they educate themselves”

Building relationships with qualified prospects regardless of their timing to buy, with the goal of earning their business when they are ready.

Lead

OpportunityS

ale

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MQLSAL

SQL


The Value of Lead Nurturing

Fast Leads ( MQL <1 mo)

Slow Leads (MQL >1 mo)

Total Leads (MQL)

Cost / Lead (MQL)

Without Nurturing 20% 6.67% 26.67% $206.00

WithNurturing 20% 20.0% 40.0% $137.50

Source: Actual Marketo data; assumes $55 per prospect 3x!

Marketo ROI Results

Results: 50% more marketing qualified leads from lead nurturing


Lead Nurturing Relevance

A

B

C

D

1 2 3Stages

1. BUYING STAGES• Early (Pre-MQL)• Mid (MQL)• Late (Opportunity)• Customer

2. BUYING PROFILES• Industry: 82%• Role: 67%• Company Size: 49%• Geography: 29%


Content - Don’t Panic!

A

B

C

D

1 2 3Stages

1. Short content is good! (YouTube)2. Reuse and repurpose3. Stay ahead of the drip

Start small, think big and adapt quickly


Other Kinds of Lead Nurturing

Accelerators• Move prospects faster with

relevant “nudges”

Recycled• Nurture based on what you find

Reconstituted• AKA “Wake the Dead”


The ROI of Lead Scoring

• Higher Win Rates• Shorter Sales Cycles• Higher Revenue Per Rep

Source: CSO Insights

How Easy Is it To Get Information About Prioritizing Sales Efforts?

Other Benefits of Fewer But Higher Quality Leads


A Framework for Lead Scoring

Explicit InfoWhat the prospect tells you

Inferred InfoWhat you observe or infer

FitAre you interested in them?

• Demographics• Firmographics• BANT

• Data quality• Corporate vs. personal

email• Inferred from IP

(geography, ISP domain)

InterestAre they interested in you?

• BANT• Latent behaviors

(engagement)• Active behaviors (sales

readiness)


Interest Scoring - Examples

• Early stage content +3• Attend webinar: +5• Visit any webpage / blog : +1• Visit careers pages: -10

Latent Behaviors (Engagement)

• Pricing pages: • +10 regular, +15 detailed

• Watch demos: • +5 overview, +10 detailed

• Mid-stage content +8• Late-stage content +12• Searches for “Marketo” +8

Active Behaviors(Buying Intent)


Closed Loop Refinement: Top Behaviors


Identifying Marketing Qualified Leads

21+ Super-Target Lead Lead Lead

9-20 Target Lead Lead

2-8 Other Lead

<2

Engagement <20 20-44 45-89 90+

Buying Intent <6 6-14 15-23 24+

Fit

Inte

rest


The Marketing-Sales Handoff (SDRs)

• Best place for dramatic improvements in business performance are handoffs between functions

• Benefits of a Sales Development function• Faster, more consistent, & better quality follow-up on leads• Better economics• The human touch enhances lead nurturing• Better data and more metrics• Talent development for sales


No Lead Left Behind

Day 0 Notification

Day 1 If untouched, reminder

Day 2 If untouched, reminder cc boss

Day 3 If untouched, alert executives

Day 7 If stale, reminder

Day 8 If stale, reminder cc boss

Day 9 If stale, alert executives


Sales Insight

Measuring and Proving Marketing’s Impact on Revenue


Revenue Cycle Modeler


Filter/Drill into data, e.g. by Program Type, Business Unit, Geography, etc.

Key topic areas:• Balance• Flow• Conversion• Velocity

Trends over time


Marketo Revenue Cycle Metrics

Opportunities 130 / mo($2,000)

New Customers($5,800)

Leads2,000 / mo($137.50)

Prospects3,800 / mo¾ paid ($73)

¼ unpaid ($0)($55 average)

20%Active Prospect

Database

4.0% / mo 75%

Paid Names

($29.33)

10%UnpaidNames

($0)

40%Inactive (Last 6

Months)

40% of prospects eventually become a lead

80%

80% of all deals follow this model Lead to Sales Lead: 7%

Sales Lead to Opp: 80%1.4 people per Opp1,000 Leads = 40 Opps

9,500 / mo

Lead Type VariantsSource

ChannelDivision

Size


Conversion and Speed By TypeProspect to Lead


Conversion Over Time

• Predict conversions from one stage to another over time

• Create plans / forecasts about future

3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 780

10

20

30

40

50

60

70

f(x) = 50.7486452521888 x^-0.57138477143868R² = 0.430133719514154

Marginal Conversion

3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 78 -

200 400 600 800

1,000 1,200 1,400 1,600 1,800 2,000

f(x) = 994.202885818322 x^0.135210727928123R² = 0.95505216364088

Cumulative Conversion


Marketing Forecasts


Key Takeaways

1. Grow revenue by making sales more productive, not just by hiring more reps

2. Focus on the entire revenue cycle, not just the top of the funnel

3. Don’t contact a lead before its time

4. No lead left behind / service level agreements

5. Use forecasting to turn marketing from a cost center into a revenue driver


Marketo, Inc.901 Mariners IslandSuite 200San Mateo, CA 94404

Direct: +1.650.376-2310

blog.marketo.comwww.marketo.com

JON MILLERVP Marketing

[email protected]@jonmiller2

Contact Me

Download the “Definitive Guide to Lead Nurturing”www.marketo.com/dg2-lead-nurturing

Secret Sauce for Revenue: A Practical Case Study

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Transcript of Secret Sauce for Revenue: A Practical Case Study