Tuesday, May 26, 2009

Demand Metrics: There's more to it than that

In early April I began my internship at Agito for the final leg of my Corporate Communications and Public Relations post-grad program at Centennial College. I’ve been assisting Barry with public relations efforts and content writing for Agito clients. In that time my work has varied from writing online news releases, website content and primers for Search Engine Marketing (SEM) and Online News Releases.

During my time here, I’ve read a lot about SEM as it relates to online lead generation for business-to-business (B2B). One example would be Demand Creation: Five Metrics That Matter, a Sirius Decisions research brief. (An overview can be found on the Canadian Marketing Association blog.) I’ve found through speaking with Keith, that Sirius’ metrics for converting a sale are pretty similar to how Agito measures its lead generation.

In the paper, Sirius splits the process into a simple “Demand Metrics Waterfall”. The graphic looks very simple and straightforward, and in my conversations with Keith about it, he said he found it quite accurate, though with one caveat. Agito goes deeper by breaking down Inquiries into two parts – conversions and prospects.

Here are the five metrics Sirius believes are most important to a company:

Keith made it clear to me that Agito pays special attention to how conversions are measured. Many pay-per-click (PPC) management companies only measure conversions. It’s important for clients to know that while x amount of conversions are coming in, the true number should be broken down even further.

The chart below shows how Agito varies from Sirius:

To start, Conversions are not the same as a prospect, lead or inquiry. They’re simply the submission of a form (ex. contacts, tests and queries, regardless if they’re valid or not) and they’re measured with Google Adwords and Analytics.

For example, the conversion metric on its own can be broken down into three categories.

Invalid Submission
An example of an invalid submission would be “tire kickers” or people who submit with fake e-mail addresses (i.e. mickey@disney.com).

Breaking down a non-prospect:

  • Test/Information – Web designers or developers of the website could be filling out forms for Quality Assurance (QA).
  • Non-sales related – Someone fills out the ‘contact us’ form to get in touch with an employee, ask about the company’s stock prices, etc.
A prospect has these three qualities:

  • Not necessarily sales related – Someone who downloads a whitepaper or views a webinar. If that person only leaves their e-mail address, the only way to know if it was a lead or not would be to nurture it.
  • Valid contact – Someone who enters a valid name, e-mail and phone number into a form.
  • Not a test or internal – The corresponding e-mail is from an outside source and is deemed to not be spam.
Determining which prospects are worth confirming is done by taking the data collected from Google, and using the Bettermail lead source tracking functionality to break it down further. Here, it’s determined if it’s a valid contact, a non-test or internal and if its sales related. Confirming a prospect as a legitimate sale opportunity means going through the sorted data and determining if that prospect is satisfactory enough to be passed on to Sales.

The next step in Agito’s metric list is Lead. In this step there is a method used to see if a client is on the right path to completing a sale.

Keith believes using the BANT (Budget, Authority, Need, Time frame) method helps determine which prospects are ‘hot’ and how to respond effectively. Leads are highly dependent on the potential client meeting the criteria asked in the BANT questions. For example, do they have…

… a pre-defined Budget to solve her problem?
… the necessary Authority to make the decision?
… the Need for the product or solution?
… a specific Time frame to make a decision?

The next step – opportunity – requires having the BANT questions answered satisfactorily for the sale to be forecast.

Finally, if your company offers the best product or solution, and all the metrics have been met, there’s no reason why the sale shouldn’t be finalized.

I’ve found both viewpoints to be pretty useful to making a sale. I like Keith’s additions because it explicitly shows the details of what’s behind two important steps. That being said however, the “Demand Metrics Waterfall” Sirius Decisions has come up with is a great overview for the most important metrics a company should follow.