TLA 2013: Business Management
The sales process is all about identifying the likeliest prospects and focusing on them, using a method called lead scoring to determine who to focus sales efforts on. Such scoring is based on human assumptions and gut checks by the sales and marketing staff -- an inherently biased method and a self-fulfilling prophecy: What sales says is a hot lead, it makes into a hot lead based on its past experience. But because people have different perspectives and emotions, there is no science to this method.
At virtualization vendor Citrix, Ricco wanted to apply science to the process of lead scoring, to determine objectively where the best prospects were for sales to focus its efforts on. He sponsored and funded a systematic approach to demand generation and predictive analytics. The effort built a finely tuned scoring model based on the marketing industry's knowledge of implicit and explicit variables and cumulative scoring. As a result of this data-driven analysis, Ricco's marketing group reduced the number of leads to sales by 12 percent, increased the number of marketing contacts by 23 percent (meaning more engagement per contact), increased the sales rate (conversion) by 31 percent, and decreased the go-nowhere interactions (deactivation) by 21 percent.
To optimize the scoring model, Ricco's team applied predictive analytics to the marketing database from the last three years and identified 327 potential factors of lead conversion. It then ran logistic regression on a random sample of more than 1 million unique contacts to build a highly predictive model. The final model includes about 60 predictors with their relative strength.
"We can optimize for the volume of leads that marketing should send to sales. We know the capacity of our sales reps, and beyond a certain number of leads it doesn't make sense to burden sales with additional leads. Knowing the number of qualified leads we're generating based on our lead flows enables us to see our staffing requirements and informs us when we need to grow the team," Ricco says.