Lead nurturing & management: what metrics matter?

Carlos has covered a lot of the key measurements of the sales impact of nurturing. And I particularly like the last one on his list because it implies that there is a "control group" of non-nurtured leads against which nurtured leads are benchmarked.

There are a couple of other *diagnostic* measurements that can improve the nurturing process and/or reveal where more/less resources should be applied.

-- The Rotting Lead Rate: This is simply the percentage of leads delivered to sales (that conform to the agreed upon definition of a sales lead) that are not contacted within the agreed upon "perishability window" (e.g., 2 hours, 24 hours, whatever is relevant for the given business). Managing the RLR downward creates a better customer experience and also drives efficiency of marketing spend and sales resources. If the RLR spikes up, it's potentially an opportunity to augment lead qualification resources, or re-balance the flow of leads within the sales team to ensure everyone is utilized. In manufacturing terminology, the RLR is related to managing the inventory of raw materials.

-- Average time to conversion: This is a measurement of how fast leads, from various sources/campaigns, are moving into a qualified opportunity state. Important to note here is that the goal is not necessarily to try to compress this time to zero, but simply to understand the range of timescales from lead capture to conversion. This helps marketers and sales leaders use lead nurturing to drive value-added activities like sales training, campaign optimization, and especially pipeline and revenue forecasting. In manufacturing terminology, this metric is related to the concept of throughput.

These diagnostic measurements help drive better financial results over time.

Michael, great question. Carlos and Tom make great points on the upside of lead nurturing - measuring leads passed over to sales, and I agree with those metrics.

Let me take a stab at another set of metrics - the downside.

(full discussion of this topic here: http://digitalbodylanguage.blogspot.com/2010/02/calculating-true-cost-of-emai... )

If you nurture your leads, a percentage of them will engage and move towards sales, however, chances are you are *not* engaging with another percentage of them. Each email that is received and deemed "irrelevant" by the recipient moves them one step further to completely disengaging with your message.

This "emotional unsubscribe" is when they begin to reflexively delete or ignore your message. Big problem.

So, in nurturing, it is key to measure the percentage of your nurtured database that is "active" - some level of engagement - vs "inactive" - no engagement at all. If you see a strong increase in the inactive counts, you are driving people to disengage, and *must* get more targeted and relevant with your messaging, even if some of the leads are ending up with sales.

Hope that helps,
Steve

I think Merry Elrick, the author of The Truth about Marketing ROI, said it best in our thought leader interview when she said:

"Marketing ROI is NOT an increase in market share, click-throughs to your web site or even revenue generated from your marketing communications.

Marketers must understand the literal definition as the rest of the world does, including everyone in the C-suite. ROI is the profits generated over and above the initial investment and expressed as a percent of the investment.

There's a formula, but you really need to understand the nuances of how ROI is calculated in your company because there are multiple ways to interpret concepts like gross margin, net present value or discount rate, just for starters. You need to know your own company's standards."

http://blog.marketo.com/blog/2009/09/improving-b2b-marketing-roi-thought-lead...

In very succinct terms, the key lead nurturing metric for our clients is the percentage of each segment's lead responders compared to the segment's deliverable lead universe.

To elaborate, most of our clients don't yet have the kind of closed loop reporting that identifies lead segment performance through the later steps of the sales process. As a result, they substitute sales averages for each later sales step; and this throws measurement back to lead segment performance prior to Sales hand-off. Since our approach to lead management and nurturing is purely response-based (as opposed to activity-based), lead segment response percentages are key. They reflect engagement/disengagement levels, and provide lead source rankings which enable smarter marketing decisions about name sources going forward.

There are a couple of secondary metrics which our clients also look at, but which aren't quite as important: shrinkage of the original lead segment universe to the deliverable lead segment universe; and the percentage of segment responders who respond more than once. Shrinkage isn't just bad data or disinterested names, but also includes levels of duplication with existing client databases. Multiple responder rates are a quick index of engagement levels, and facilitate prioritizing leads for Sales follow-up.