236 237
How sales and marketing works
Business development
Test campaign
Monitor the initial hours and
days of the campaign and make
any corrections that are needed.
Refine
Fine-tune the filtering process to
ensure that leads being generated are
high quality and likely to buy.
RESPONSE RATES
Tally how many
leads have been
generated so far.
%
of B2B companies
that say each tactic
is most effective
at generating
leads
QUALIFIED LEADS
Determine percentage
of initial contacts with
purchase capability.
ONLINE
CONVERSION RATES
Calculate percentage of web
visitors converted to leads.
Measure
Track and measure the response
from the various campaign activities
to gauge effectiveness.
39%
Outbound
marketing
(direct sales,
telemarketing)
27%
Live events (trade
shows, webinars)
17%
Online marketing
(web content, SEO)
10%
Traditional
advertising
(radio, TV, print)
5%
Social media
2%
Other
ANALYZE
PERFORMANCE
Identify adjustments
needed to keep campaign
on track.
TOP FIVE STRATEGIES FOR LEAD GENERATION
Create content such as a viral video
or a newsworthy business report
that takes leads to a sign-up page.
Use both online and offline
channels, as most customers
will respond to just one channel.
Trace the customer touchpoint—
the point at which a customer
comes into contact with the
product—before, during, and after
purchase. Touchpoints may range
from online reviews to billing.
Tailor the call to action to the
channel, such as inviting trade show
visitors to enter a competition.
Design effective opt-in web forms
to capture data, such as asking
customers to sign up for updates.
Owned media Channel owned
by a business, such as a website,
blog, or social media profile
Attention, interest, desire,
action (AIDA) Model for
effective marketing messages
Cost per lead (CPL) Amount
it costs the company to acquire
one potential customer
NEED TO KNOW
B2B LEAD GENERATION
Most businesses selling to other businesses (B2B) identify lead
generation as one of their most important digital marketing
priorities. But which tactics do they find most effective?
US_236-237_Lead_Generation_Steve.indd 237 15/12/2014 13:53
Lead conversion
How it works
Sales and marketing departments
are responsible for generating sales
income for a company. The first
step is to locate or identify potential
customers—lead generation. The
second step is to make contact
with those potential customers
and entice or persuade them to
buy—lead conversion.
A sales pitch is used to convert
leads into customers. However,
nowadays the stereotypical spiel
delivered by an overzealous
salesperson has been largely
replaced by more sophisticated
tactics, such as live chat on
shopping websites, which inform
customers and invite them to
participate in a dialogue, rather
than simply pestering them.
Raw lead
Potential customer—
perhaps a website visitor, or
a suitable person who can
be approached by
cold-calling
3.3%
the average lead
conversion rate via
online e-commerce
in 2012
Prospect
One step away from becoming
a customer, prospects need a final
enticement to convince them to
buy the product.
Customer
Raw lead has committed to buy;
focus is now on retaining the
customer and enticing them
to make repeat purchases.
Pitch Find precise needs
of suspect; show product’s
qualities and unique values
to counter objections.
Pitch Reinforce product’s
value to prospect; offer
payment options; highlight
customer satisfaction policy.
Pitch Suggest keeping
in touch with updates,
offers, product add-ons,
or discounts.
The process of turning a customer’s interest into a sale is called lead
conversion. The task requires not only a sales pitch to promote the
product or service, but also an approach tailored to the customer.
Lead scoring System used to
measure the readiness of leads
for conversion
Sales pipeline Visual tracking
of the number of leads, suspects,
and prospects at each stage in
order to monitor sales process
Lead nurturing Informal contact
with a lead designed to gradually
win them over as a customer
Cost per touch Measurement of
the cost of sales labor each time a
lead is “touched” (contacted)
NEED TO KNOW
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238 239
HOW SALES AND MARKETING WORKS
Business development
Online lead conversion
A strategy is required for steering website visitors through every step of the
lead-converting process. It is often presented as a funnel. Once visitors have
arrived at a website, they are enticed to click on a “call to action” (CTA) button,
which takes them farther into the funnel.
Pitch Involve raw lead
in website experience or
conversation; identify need
for product; show benefits.
High concept
Catchy introduction that captures the vision or key idea of a
product or business; intended to grab attention and interest
Elevator
Short summary (under a minute long) that explains the
why, what, and how of a business or product
20-minute deck
Presentation that explains the product or business in detail;
how it can serve the need a prospective customer may have
Leads click on
call to action
Leads interact
with company
Leads qualified
by company
Sales closed
Suspect
Raw leads show their interest
by remaining on website or by
not ending phone conversation
with cold-caller.
Inactive
Prospect isn’t ready to buy
immediately, but shows enough
interest to suggest they might
buy in the future.
Dead lead
Lead will not convert, but may be
worth trying to revive in future.
THREE CLASSIC SALES PITCHES
Visitors to
website
3,000
600
150
50
10
US_238-239_Lead_Conversion.indd 239 21/11/2014 16:27
238 239
HOW SALES AND MARKETING WORKS
Business development
Online lead conversion
A strategy is required for steering website visitors through every step of the
lead-converting process. It is often presented as a funnel. Once visitors have
arrived at a website, they are enticed to click on a “call to action” (CTA) button,
which takes them farther into the funnel.
Pitch Involve raw lead
in website experience or
conversation; identify need
for product; show benefits.
High concept
Catchy introduction that captures the vision or key idea of a
product or business; intended to grab attention and interest
Elevator
Short summary (under a minute long) that explains the
why, what, and how of a business or product
20-minute deck
Presentation that explains the product or business in detail;
how it can serve the need a prospective customer may have
Leads click on
call to action
Leads interact
with company
Leads qualified
by company
Sales closed
Suspect
Raw leads show their interest
by remaining on website or by
not ending phone conversation
with cold-caller.
Inactive
Prospect isn’t ready to buy
immediately, but shows enough
interest to suggest they might
buy in the future.
Dead lead
Lead will not convert, but may be
worth trying to revive in future.
THREE CLASSIC SALES PITCHES
Visitors to
website
3,000
600
150
50
10
US_238-239_Lead_Conversion.indd 239 21/11/2014 16:27
Customer retention
Early warning
systems
Anticipate any
problems and
alert customers
in advance.
Recovery
programs
Apologize for
any mistakes and
make amends to
woo dissatisfied
customers back.
Customer feed-
back surveys
Listen to
customers and
identify people at
risk of defecting.
Boost customer
service
Offer employees
incentives to build
customer relations.
Loyalty
programs
Reward customers
with improved
incentives for
staying loyal.
Customer satisfaction
Assess rate of customer complaints
and recommendations.
Attrition rate
Calculate the number of customers
retained (existing), lost (exiting), or
gained in a given period.
Revenue targets
Measure revenue targets against
cost of customer retention efforts.
Introduce retention
improvement strategy
Monitor and measure
by analyzing
Identify satisfied
customers
Customer referral
Measure the number
of referrals an individual
customer generates.
Loyalty
Pinpoint customers
who are active in
the brand’s loyalty
program.
Identify the
dissatisfied
Defection
Find out why certain
customers have left
and which competitor
they have gone to.
Complaint analysis
Examine written
customer complaints
and call-center records.
EXITING
CUSTOMERS
EXISTING
CUSTOMERS
Existing customers help businesses generate the majority of profit
and growth through making additional sales and referrals, and so
retaining these customers is a high priority for marketers.
Measure customer retention level
Track how many customers repeat purchase or buy more products.
$
$
$
+
–
US_240-241_Customer_Retention_Natalie.indd 240 21/11/2014 16:27
240 241
HOW SALES AND MARKETING WORKS
Business development
How it works
There are two stages to the process of customer
retention: measuring the current rate of retention,
and applying strategies to manage and improve it.
Practices include identifying the most valuable
customers and nurturing relationships with them.
The least valuable or most costly customers may be
dropped if they show little development potential.
5%
reduction
in customer
defection
rate can
increase
profits by
25–125%
Natural
attrition (death,
relocation)
Senses
indifference
from provider
Dissatisfied
with product
or service
Unhappy
with price
Lured by
competition
Upsell and cross-sell leads
Identify customers who may buy
larger products, or related items.
Net promoter score ®
Use management tool to gauge
how likely a customer is to
recommend company to others.
Customer retention savings
Calculate savings made in
marketing spend by retaining
existing customers.
Customer lifetime value (CLV)
Measure of the amount customer
will contribute to company
revenue in the long term
Customer retention rate (CRR)
The number of customers
retained over a given period,
expressed as a percentage
Customer acquisition
cost (CAC) The amount
company spends to gain a
customer; also called cost
of customer acquisition (COCA)
need to know
top five reasons for
losing a customer
1-2 3-4 5-6
$
$
1-2 3-4 5-6
7-8
9-10
US_240-241_Customer_Retention_Natalie.indd 241 21/11/2014 16:27
240 241
HOW SALES AND MARKETING WORKS
Business development
How it works
There are two stages to the process of customer
retention: measuring the current rate of retention,
and applying strategies to manage and improve it.
Practices include identifying the most valuable
customers and nurturing relationships with them.
The least valuable or most costly customers may be
dropped if they show little development potential.
5%
reduction
in customer
defection
rate can
increase
profits by
25–125%
Natural
attrition (death,
relocation)
Senses
indifference
from provider
Dissatisfied
with product
or service
Unhappy
with price
Lured by
competition
Upsell and cross-sell leads
Identify customers who may buy
larger products, or related items.
Net promoter score ®
Use management tool to gauge
how likely a customer is to
recommend company to others.
Customer retention savings
Calculate savings made in
marketing spend by retaining
existing customers.
Customer lifetime value (CLV)
Measure of the amount customer
will contribute to company
revenue in the long term
Customer retention rate (CRR)
The number of customers
retained over a given period,
expressed as a percentage
Customer acquisition
cost (CAC) The amount
company spends to gain a
customer; also called cost
of customer acquisition (COCA)
need to know
top five reasons for
losing a customer
1-2 3-4 5-6
$
$
1-2 3-4 5-6
7-8
9-10
US_240-241_Customer_Retention_Natalie.indd 241 21/11/2014 16:27
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