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Building a Leak-Proof Sales Pipeline

By Ian Michiels
Aug 20, 2009 4:00 AM PT

In November 2008, Aberdeen published a study titled, "Lead Nurturing: The Secret to Successful Lead Generation." The survey captured the challenges and strategies from 213 organizations and found that on average, 16 percent of the total leads that are deemed "sales-ready opportunities" actually close.

Building a Leak-Proof Sales Pipeline

That's a fairly alarming number. The difference between a successful company and a mediocre company lies in how the remaining 84 percent of already qualified opportunities are handled. These are real opportunities that have a good chance of closing (albeit in the long-term), but without processes to nurture and retain opportunities, it's easy for unrecognized revenue to slip through the pipeline. However, it seems like everywhere we turn there are whitepapers, articles, webinars and research studies on "lead nurturing," which exclusively focuses on the front of the pipeline; but there is very little on the value of nurturing across the entire lead life cycle, which includes nurturing for existing customers.

In the July 2009 study, "Lead Lifecycle Management: Building a Pipeline that Never Leaks," Aberdeen explored the holistic lead life cycle to find out how Best-in-Class companies achieve significantly higher revenue growth, lead to sales conversion rates, and bid-to-win ratios. The study revealed that on average, 56 percent of all organizations exclusively relied on nurturing for customer acquisition, and only 22 percent had structured nurturing campaigns for existing customers for cross-selling and up-selling opportunities. Interestingly, Best-in-Class made up 78 percent of the companies that used nurturing for customer acquisition and up-selling / cross-selling.

Nurturing Campaigns

It's easy for B2B marketers to become myopically focused on the front of the funnel (lead nurturing), particularly when they are goaled by the number of new prospects that are passed to sales. However, purpose-built nurturing campaigns for existing customers can be a huge source of revenue with a significantly higher return on investment than new customer acquisition. In other words, the Best-in-Class leverage a number of nurturing campaigns that are uniquely designed to:

  • nurture new prospects that may be unaware of the company
  • educate prospects that are aware of the company and looking for more information before they talk to sales
  • nurture leads that may have been engaged by sales, but for whatever reason are no longer an active prospect
  • cross-sell and up-sell existing customers

Each of these nurturing campaigns requires a different strategy to ensure the message is highly relevant to recipients. Likewise, when lead management technology is being used to deliver automated lead scoring, the score and the campaign must accommodate the lead's unique stage in the lead lifecycle. As such, nurturing a new prospect requires a significantly different strategy than nurturing someone who has already engaged with sales.

Given the breadth of the "Lead Lifecycle Management: Building a Pipeline that Never Leaks" study, it's nice to walk away with three or four key takeaways. The following tips are grounded in Best-in-Class practices and represent the quickest way for any organization to benefit from a holistic lead lifecycle management approach.

  1. Segment and target: Seventy-seven percent of Best-in-Class organizations used segmentation and targeting to uniquely market to prospects in their customer database (versus 47 percent of All Others). This is essentially the first step in developing nurturing programs beyond "lead nurturing." If you don't understand your customers, you won't understand how to offer cross-selling and up-selling opportunities that are likely to drive revenue from existing customers.
  2. Nurture across the entire lead lifecycle: The research suggests that the concept of Lead Lifecycle Management (LLM) isn't necessarily something Best-in-Class organizations associate with their lead management processes or strategies. However, Best-in-Class companies are twice as likely as all other organizations to have processes in place to route prospects and customers to different stages in the buying cycle or sales cycle, regardless of whether or not the opportunity is a new prospect or an existing customer. Companies need to think about all the ways prospects can slip though the sales cycle. Nurturing is essentially a strategy for catching potential revenue opportunities and tossing them back into the funnel at an earlier stage. Best-in-Class organizations have a solid understanding of where the process fails before developing nurturing programs.
  3. Use automated lead scoring: Research has consistently shown that technology is playing a significant role in Best-in-Class performance. Companies that achieve higher performance in KPI's like revenue and lead conversion are more likely to incorporate automated lead scoring capabilities into marketing and sales processes.
  4. Understand the lead lifecycle for your organization: Lead Lifecycle Management (LLM) takes a holistic view of demand generation. LLM creates a seamless flow between marketing, sales and service to maximize the number of sales-ready opportunities, whether these come from newly acquired leads or existing customers. It's important for organizations to start thinking about the entire customer experience, from the time a lead becomes a prospect to the time they are converted into what is hopefully a lifetime customer. Every organization will have a different process for routing leads within the lead lifecycle approach. Unfortunately, the research suggests very few organizations actually take the time to map out the full lead lifecycle process to identify inefficiencies and best practices within existing processes. Best-in-Class simply have a better understanding of how content maps to different stages in the lead lifecycle and how to appropriately engage with new opportunities.

Yogi Berra once said, "In theory, there's no difference between theory and practice, but in practice there is." Lead Lifecycle Management is actually a pretty simple concept in theory, but in practice, organizations are inundated with a plethora of challenges, including lack of resources to develop content, lack of automation and standardization, and most notably a lack of defined process between marketing and sales.

All too often, organizations focus lead management efforts on the front of the funnel, with laser-like focus on new customer acquisition. However, the Best-in-Class demonstrate an aptitude for recognizing the value of existing customers and have developed nurturing programs that map to all stages of the lead life cycle. Ultimately, lead life cycle management is an emerging concept that can help every organization identify opportunities and harvest the full potential from marketing and sales efforts.


Ian Michiels is a research director and the practice leader of the Customer Management Technology Group at the Aberdeen Group. He can be reached at ian.michiels@aberdeen.com.


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