You’ve been asked to provide an ROI justification for online lead generation. So what’s the problem?
In the B2C world, the calculation of eCommerce ROI can seem deceptively simple. For example, FuzzyWorlds’s web marketing manager (the buyer) pays 5 cents per click for “fleece vest” to lead buyers to a website where they can purchase a FuzzyWorld-logo fleece vest. If it takes 50 clicks on “fleece vest” to move a vest for which they get $5.00 profit or margin . . . depending on FuzzyWorld’s model . . ., they have realized an ROI of 100% ($5.00-$2.50/$2.50) less the time-value of money for this pay-per-click (ppc) option.
The problem comes when FuzzyWorld’s customers decide to mix modes! Rather than buy the vest online, the customer concludes her research and goes to the mall to make a purchase. FuzzyWorld gets the “R” but is unable to connect it to the “I” in ppc advertising. If this modal shift happens enough, FuzzyWorld may think that its store advertising or mall presence deserves an investment boost, and siphons money away from “underperforming” web marketing activities.
For retail/B2C there are some simple solutions to this problem. Examples include “buy here and pick it up at the store” campaigns (Best Buy) or the “web coupon good at the store” model (Micro Center). And the connection between modes is facilitated by the short time interval between web view and in-store purchase.
OK, that’s fine for B2C, but what about B2B?
In the B2B world, customer behavior and the length of the buying cycle make the connection between on-the-web activity and the decision to purchase much more difficult to trace. For example, the number of players and communication modes on the customer side varies. These may include first contact via email from an engineer seeking to solve a problem, a second contact by phone from that individual’s direct superior, face-to-face contact by members of an evaluation committee (for large purchases) and a final telephone or email contact by someone from purchasing. Even with a relatively sophisticated CRM/SFA system like Salesforce.com, which aggregates leads, contacts, accounts and sales “opportunities”, ROI calculations can get sketchy.
Given these realities, what can the B2B web marketer or SEM vendor who provides services for that marketer do to capture real ROI data? What can they do to “connect the dots” for those who must review and approve funding for web marketing campaigns? How can they judge the effectiveness of their web marketing efforts?
Conversion Happens at Many Stages, Not Just the Sale
The first step in understanding ROI is realizing that conversion occurs at many steps, each of which must be captured and documented. And to determine ROI, where “I” is the cost of a lead, this means having the discipline to trace the lead and its outcomes from start to finish. Finally the path “from start to finish” depends on the sales model that your organization employs.
Outbound Sales Model
For companies employing an outbound sales process (lead generation – lead qualification – outbound sales rep call) it’s up to the marketing department to track:
1.The origination point of each lead, be it (a) contact through a search engine, (b) direct contact through the company’s url and website or (c) through some offline source like a trade show
2.The entry point for each lead, be it (a) online, (b) telephone, (c) personal contact or (d) other means and
3.The presence of intermediaries be they friends or colleagues of the person(s) who connects with the selling company or a broker (e.g. VAR, agency, etc.) who is making contact on behalf of a third party.
If the origination point is online, it is possible to trace the comings and goings of leads using Webtrends or other commercially available tracking tools. It is necessary to “cookie” each referrer to track their path, and to know if the same person (computer) converts from a “looker” to a real lead. [Quote from Webtrends site: “A more accurate number of visits and unique visitors results when cookies are used to track web site visitors. If visitors are tracked by IP address rather than by cookie, this can result in an inflated visit and unique visitor count.”]
Inbound Sales Model
Organizations with inbound sales processes (lead generation – inbound call or web contact – sales rep/call center operative response) have many of the same needs for lead tracing as their outbound counterparts. If the contact comes through the company website, with a prospect asking for a return call or email, electronic tracing (see comments on Webtrends above) once again comes into play. When the contact comes via email or phone (or in the case of one seller known to the writer, a chat line) the person at the entry point may have to gather origination point and if possible intermediary information on the spot.
Once again, the key issue is how to prepare an operative who sits at the entry point to ask the appropriate tracing questions without turning off the prospect. This is not a matter of simple scripting. Training must include:
1.Learning how to “read” the prospect – including preferred communication style (MBTI type, visual/auditory/kinesthetic sorting, etc.
2.Setting up the conditions (perceived value-add, rapport, etc.) that earn the operative the right to ask the necessary questions.
3.Being able to help the prospect recall past events without “leading the witness.”
What Happens When We Go Offline?
Offline lead sources may be more cumbersome to track. For example, getting information during a telephone inquiry can be difficult. Many potential customers are at first reluctant to self-identify for fear of being hounded by follow-up calls. At this tenuous stage of the relationship, those in contact with the customer are often reluctant to press the point, and ask the “how did you find us” questions. Training those who receive telephone leads to ask the difficult questions in a non-threatening manner, and to time those questions at a point in time when they have “earned” the right to ask a probing question is key. In addition, the need to immediately document the information gained during the call cannot be over-emphasized.
Tradeshow and other face-to-face forums have their own unique lead tracing practices and problems. At the primitive end of the spectrum are business card “fishbowls” in tradeshow booths. More sophisticated tradeshows have barcoded or microchipped badges, linked to complete attendee descriptions, which can be swiped at the booth, usually in exchange for a show premium. However, unless captured at the booth, on the floor or at a hospitality suite, the marketer will not be able to trace the lead back to a prior origination point (e.g. “I looked you up at the show after seeing your website.”).
Once the show is over, the marketing department usually batch loads the “take” from the show into a lead database, provides information concerning product or service interest and makes some comments about the relative urgency for follow-up. In addition, savvy marketing organizations engage in a rigorous screening and qualification process before passing the leads onto sales, thereby increasing their credibility with this very skeptical audience.
The Key is Discipline
One thing should be clear by this point; accurate lead tracing is no accident. It requires real discipline on the part of marketing, sales and other organization units facing prospects and customers. The importance of team effort in not “losing track” of a lead cannot be overemphasized.
But the payoff can be significant. Expensive but non-productive lead generating activities can be identified and dropped. Productive lead generating avenues can receive appropriate investments. And the elusive ROI numbers can become your friend.
Mal Watlington is President of City Square Consulting, Inc., a specialty consulting firm focused on the achievement of superior financial performance through market focus, competitive responsiveness and workforce potential realization.
