Live From DMA2010: How to Double Conversion Rates With Effective Lead Nurturing
Five is the magic number for Palo Alto, Calif.-based HP Software, says Rod Lehman, the company's senior director of Americas marketing. That's how many touches consumers may require before converting, he told an intimate group of DMA2010 attendees during the session, "Effective Lead Nurturing: The Key to Doubling Conversion Rates."
During the lunchtime gathering, about a dozen marketers listened to Lehman's reasoning behind the "law of diminishing returns" of customer touches. With most converting on the first touch, from there his department determines how best to nurture leads to turn them into sales.
While inbound leads, which are all opt-in, bring in a smaller percentage of revenue than the customers who, for instance, directly call sales representatives to make larger purchases, Lehman says the new leads can turn into significant sales given the right nurturing. He says leads nurtured with marketing insight are more likely to buy. "For marketing-touched opportunities, the close rate is 50 percent higher in my division."
It's best, he says, to nurture the leads companies already have rather than to keep adding to the top of the funnel without insight. One of the most important clues to how consumers will behave is to employ lead scoring, which HP Software is already doing—to show sales its value—and which will have more teeth behind it around Nov. 1, Lehman says. That's the date when he expects to chop off the bottom 20 percent of incoming leads—at the moment 98 percent go directly to sales—and allow marketing to nurture those leads until they're able to mature. "[That's] so we can do fewer, but more qualified, leads."
Session attendee Dave Spector, senior vice president of global marketing for Swiss-based IT automation software provider Kaseya, agrees that lead scoring is a great help in allowing his company to have the right conversation at the right time with the right customer.