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Metrics and the Buying Pipeline

Metrics are a part of our everyday lives. There are metrics for everything from our heart rate to our pay rate; from earnings per share to market share. Just as in everyday life, business life metrics indicate effectiveness and impact. Without metrics to track performance, business, marketing and sales plans are ineffective.

How can metrics impact sales?

For most companies, sales is the name of the game. Companies work on building their sales pipeline, reviewing it regularly, sometimes daily. It’s important to look at your business from your customer’s and market’s perspective, so we refer to the sales pipeline as the buying pipeline. People are buying from you. The more you understand your customer’s needs and wants the more you can satisfy them. And the more you understand how they buy — that is, their buying decision process — the greater the likelihood your sales and marketing efforts will be successful. Understanding the buying process allows you to build a buying pipeline. By thinking this way you are not only taking a market and customer viewpoint, you are also aligning your sales and marketing efforts. A sales pipeline sounds as if it belongs to a specific part of the organization, namely, Sales. A buying pipeline helps everyone in the company realize they have a role in moving an opportunity.

Let’s pause for a moment, and examine the buying pipeline. It is made up of the incremental behavioral commitments prospective buyers demonstrate that indicate they are moving from contact to suspect to prospect and ultimately, to customer. A behavioral commitment is something you can observe that signals the prospect’s interest and consideration. The idea behind the pipeline is, as customers move from one end to the other, each additional behavioral commitment indicates increased interest, or consideration.

Think about your own buying behavior when you’re considering a new car. You might do some preliminary research to narrow down your choices. You may then look at the cars on the lot – and even test drive a few. You might even bring a car home as a trial. Each incremental behavior along the way brings you closer to your purchase decision. These incremental behavioral commitments can be grouped into stages. More on stages later.

How does this knowledge relate to metrics?

Marketing organizations within companies are increasingly scrutinized, and asked to substantiate their revenue and lead generation effectiveness through metrics. The buying pipeline provides marketers and sales with a view into the buying process. It also allows you to align your marketing metrics accordingly. A solid pipeline tool details the many steps and the time involved in each stage. At each step in the process, metrics can be established and monitored to help measure progress and steer your efforts in the proper direction. Over time, you can assess how well you are moving targets from one stage to the next, and begin to fine-tune your efforts, propelling more opportunities to conversion faster.

There are five steps to developing an effective pipeline tool and the associated metrics.

Step 1: Construct the pipeline by defining and mapping the incremental behavior commitments, which can vary by industry and buyer. An example of an incremental behavior commitment is when the target provides information about the size of their problem, their degree of interest in solving the problem and asks for a follow-up conversation. Another example is a request for an RFP. It is important that the marketing and sales organizations agree upon which behaviors are desired in the target and demonstrate increased consideration.

Step 2: Establish the stages, determining which behaviors fall into what stage in the pipeline: contact, suspect, lead, qualified lead, prospect and customer. Using the examples in Step 1, the first behavior might establish the target as a suspect and the second as a prospect in the pipeline. A key benefit of this step is that both marketing and sales will be able to agree on exactly what behaviors indicate the stage a target is in.

Step 3: Establish the metrics. These will include the target numbers for each stage, the conversion ratios from one stage to the next, time to sale, and cost to acquire. This step may require gathering historical or industry data.

Step 4: Develop your strategies. Marketing and sales strategies and tactics will be used to motivate the targets to take the appropriate behavioral steps to move them through the pipeline. Remember, effective marketing that capitalizes on buying motives and helps the target understand how your offer addresses their needs will be critical to moving targets through each stage.

Step 5: Track effectiveness. Without knowing the effectiveness of each strategy and tactic in moving the target through the stages, you cannot know what is working, whether you are meeting your goals, and what adjustments are required.

In today’s economic environment appropriately measuring and benchmarking business performance over time impacts success. The metrics you establish associated with the various stages of the buying pipeline provide valuable data points against which the marketing organization can track its progress. Ultimately, metrics help companies successfully navigate the uncharted territory of the buying pipeline.

These five steps will help you better define your buying pipeline and develop metrics more meaningful than click-through rates, show lead cards, or ad response rates. This approach encourages marketing and sales to work together to understand where each opportunity is in the pipeline and who has the primary responsibility to move it forward.

About the Author

Laura Patterson is the author of ‘Measure What Matters’: Reconnecting Marketing to Business Goals, ‘Gone Fishin’: A Guide to Finding, Keeping, and Growing Profitable Customers, and numerous articles on marketing subjects. She is president and co-founder of VisionEdge Marketing, Inc, a leading metrics-based strategic and product marketing firm located in Austin, Texas. The company specializes in consulting and learning services associated with measuring marketing performance, customer acquisition and retention initiatives, market, customer and competitive intelligence, market and product validation, market and customer segmentation, positioning, pricing, and channel strategies. For more information, go to www.visionedgemarketing.com.

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Connecting With Consumers: Marketing For New Marketplace Realities $120 These are exciting times for business managers and marketing professionals, yet the challenges imposed by ongoing social and technological developments are daunting. In an age in which marketers can reach their audiences with greater facility than ever before, firms have never been less in control of their customer targets. This increasing connectedness of consumers provides a range of unique and promising opportunities for product and brand managers. Connecting With Consumers describes the various strategies and techniques that can be utilized to harness consumer influence. The book traces evolving developments in the consumer marketplace, considers their impact on the potential reshaping of the marketing profession, and describes the emerging set of tools that can enable marketers to respond to new marketplace realities. It provides, clear, up-to-date coverage of a number of topics currently on the minds of many: Web 2.0, word of mouth, buzz, the social web, social media metrics, customer engagement, viral and guerrilla marketing. The book critically assesses emerging marketing strategies and tools within the context of research and theory, and provides numerous applied examples to illustrate marketing successes and common pitfalls to avoid. It argues throughout for a more collaborative relationship between companies and consumers towards their mutual benefit. Although the balance of power has shifted to the consumer for each of the various aspects of the marketing process, collaboration is what the future of marketing likely will be all about. Marketers can avoid irrelevance in the face of change, but this will require a clear commitment to connecting with consumers rather than searching for ways to regain control over them. The book challenges marketers to make a choice: embrace the ongoing changes as opportunities for reshaping relationships with consumers, or cling to the past at the risk of becoming irrelevant. This is the book for

Contemporary Direct & Interactive Marketing $146.67 Learn to identify a firm’s ideal customer and turn him into a life-long client. The Internet has made personal communication faster than ever, giving advertisers the opportunity to speak directly to their audience like never before. Spiller/Baier combines the theory of direct and interactive marketing with highly practical strategies and examples. Direct and interactive marketing require a focused set of skills for maximum effectiveness, including customer profiling, research and testing, and interactive media planning. Students learn to use the fundamental principles of direct marketing to create hi-tech campaigns using the latest technology. In this newly revised second edition, the text has been updated to reflect the most recent innovations in online advertising and customer interaction. Among these additions are sections on blogging, social networks, and search engine advertising. The Foundations of Direct & Interactive Marketing (D&IM); Integrated Marketing Communication (IMC): The Message & Media Decisions in Direct & Interactive Marketing; Response, Measurement & Metrics of Direct & Interactive Marketing; Applications & Future Directions of Direct & Interactive Marketing A career in marketing today increasingly requires direct marketing and online marketing skills. Spiller/Baier prepares students with everything they need in order to plan and execute interactive and direct marketing campaigns using today’s latest technology.

Cost Reduction Analysis: Tools and Strategies $43.39 As every organization has learned from today’s global economic climate, an ongoing commitment to cost reduction and control in both good times and bad is a surefire way to weather inevitable economic turmoil. It’s true: being proactive and implementing practical cost control measures now will lessen your company’s likelihood of having to take drastic actions later—actions that can imperil its direction and future.Written by renowned accounting expert Steven Bragg, Cost Reduction Analysis: Tools and Strategies clearly lays out the tools for determining which costs your company should cut without impacting its ability to deliver goods and services. This practical book walks you through:Specific cost reduction opportunities in sales/marketing, product design, production, payroll, and benefitsMethods for improving the procurement process to reduce operational costsA broad array of techniques for reducing a company’s investment in inventoryThe best forms of analysis to follow when deciding whether to invest in a fixed assetWhy all cost reduction decisions should be based on how they impact the productivity of throughput analysisLiberally sprinkled with concept-clarifying examples as well as a variety of metrics specifically designed to help you monitor your firm’s cost reduction progress, Cost Reduction Analysis: Tools and Strategies is your ideal sourcebook for maximizing profits through a successful system of cost reduction.

Cost Reduction Analysis: Tools and Strategies $75 As every organization has learned from today’s global economic climate, an ongoing commitment to cost reduction and control in both good times and bad is a surefire way to weather inevitable economic turmoil. It’s true: being proactive and implementing practical cost control measures now will lessen your company’s likelihood of having to take drastic actions later—actions that can imperil its direction and future.Written by renowned accounting expert Steven Bragg, Cost Reduction Analysis: Tools and Strategies clearly lays out the tools for determining which costs your company should cut without impacting its ability to deliver goods and services. This practical book walks you through:Specific cost reduction opportunities in sales/marketing, product design, production, payroll, and benefitsMethods for improving the procurement process to reduce operational costsA broad array of techniques for reducing a company’s investment in inventoryThe best forms of analysis to follow when deciding whether to invest in a fixed assetWhy all cost reduction decisions should be based on how they impact the productivity of throughput analysisLiberally sprinkled with concept-clarifying examples as well as a variety of metrics specifically designed to help you monitor your firm’s cost reduction progress, Cost Reduction Analysis: Tools and Strategies is your ideal sourcebook for maximizing profits through a successful system of cost reduction.

Creating a Strategic Marketing Plan for Your Company: Leading CMOS on Articulating a Vision, Evaluating Financial Metrics, and Ensuring Brand Success $12.06 Used

Creating a Strategic Marketing Plan for Your Company: Leading CMOS on Articulating a Vision, Evaluating Financial Metrics, and Ensuring Brand Success $11.96 Used

Customer Equity: Building and Managing Relationships as Valuable Assets $0.99 What’s a customer worth? The company that can answer this question precisely is the company with an edge in the customer-based, technology- and information-intensive economy of today. But how can an asset as intangible as customer value be measured? This timely book provides a solution: a fully developed, highly practical new marketing system for measuring and managing customer value as a financial asset-a system uniquely suited to today’s rapidly changing, increasingly digital marketplace.How has the management-or mismanagement-of customer assets played into the successes, failures, at-risk status, or Cinderella stories of GM, Amazon, AOL Time Warner, FedEx, the U. S. Armed Forces, Oprah, Bluefly.com, and Harley Davidson? Drawing on these and other examples, the authors explain the strategies and tactics that make customer equity management work. They outline customer equity’s three core strategies-customer acquisition, customer retention, and add-on selling-and the balance among them, and explain how the customer life cycle affects strategy and the marketing mix. Detailed, how-to chapters follow, clearly mapping out methods and practices for organizational restructuring, customer equity measurement, customer equity accounting, database management, and data analysis. Along with strategic and tactical guidance, Customer Equity provides precise metrics for evaluating a business more effectively and improving performance- the “activity-based management” of a company’s marketplace. The authors present a new framework for structuring go-to-market activities that links those activities to useful metrics and allows better-informed marketing decisions. Marking a decisive move away from the traditional focus on mass marketing and brand equity, Customer Equity equips companies with the knowledge to manage customer portfolios across segments and over time, and gives marketers the means to lengthen customer life cycles, tailor the marketing mix,

Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing $24.65 New – Customer Relationship Intelligence brings a fresh, new perspective to sales and marketing: new relationship metrics and a breakthrough, actionable framework for real-time management, tied to profit. It is about teamwork and collaboration. It is about executing strategy. It is about retention, profit, and competitive advantage. Now companies can realize the gold in customer relationships and overcome risk and uncertainty in sales and marketing to: [ Unlock the sustainable competitive advant

Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing $18.37 New – Customer Relationship Intelligence brings a fresh, new perspective to sales and marketing: new relationship metrics and a breakthrough, actionable framework for real-time management, tied to profit. It is about teamwork and collaboration. It is about executing strategy. It is about retention, profit, and competitive advantage. Now companies can realize the gold in customer relationships and overcome risk and uncertainty in sales and marketing to: [ Unlock the sustainable competitive advant

Customer Satisfaction Research Management: A Comprehensive Guide to Integrating Customer Loyalty and Satisfaction Metrics in the Management of Complex Organizations $66 Successful organizations have shifted from being product-based organizations to customer-based organizations, and customer satisfaction management (CSM) is an integral aspect of this new way of thinking. Successfully measuring customer satisfaction can be complicated and very detailed, requiring a great deal of in depth research and analysis. Customer Satisfaction Research Management is intended for advanced service quality managers and marketing researchers involved in the management of customer satisfaction programs. This is the third book in a series by author Derek Allen, focusing on customer satisfaction measurement, analysis, and implementation. Allen begins with the assumption that the reader has at least a minimal familiarity with the psychometric aspects of customer satisfaction measurement, statistical analysis, and linkage research that attempts to establish a causal relationship between customer attitudes and business outcomes. He then builds on this base to first discuss the theoretical relationship between customer satisfaction and financial performance, and then to dive deep into specific applications of customer satisfaction programs. Some of the areas covered include dealing with the challenges of conducting global customer satisfaction measurement programs, linking performance metrics to management compensation systems and financial outcomes, and results deployment.