Manufacturing CEOs, Marketing, and Measuring
As a manufacturing CEO should you concern yourself with industrial marketing or selling or any practices of that nature whatsoever? You might think that as the leading executive in your manufacturing company your primary area of focus should be on strategic matters rather than on the minutiae of the marketing activities in your manufacturing company. I have consulted with a wide variety of manufacturing CEOs with many different personalities, skills, strengths, and weaknesses. Some of them are very introverted, some of them are hyper-extroverts, some of them are hard-driving, and some of them are fairly laid back and happy as long as things continue to tick along.
The one aspect I have seen in every successful manufacturing CEO is that they are interested in every facet of their business. This is not to say they are micro-managers. This is to say that they have a very good understanding of the critical components that lead to success. They have more than a passing knowledge of finance, production, marketing, and selling. They also understand that marketing activities can be measured like any other business process.
Here are two KPIs that need to be known by every manufacturing CEO interested in profitable growth.
The first number manufacturing CEOs need is the cost per marketing qualified lead (MQL). MQLs are leads that meet minimal lead scoring criteria such as: engagement on your website, downloads, company size, job title, location, or industry. At this point these leads have not been scored for budget, authority, need, or timing, This figure represents the marketing costs being incurred by the company to generate leads through a variety of outbound or inbound marketing activities. It tells manufacturing CEOs about the cost-effectiveness of your lead generation tactics and whether changes are in order. For example, if outbound Campaign A brings in 50 MQLs at $5 each and inbound Campaign B brings in 100 MQLs at $2 each then Campaign B is more cost-effective. What manufacturing CEOs need to understand is that this can be a very misleading figure as you need to consider lead quality.
The more critical number manufacturing CEOs need is the cost per lead for sales qualified leads (SQLs). SQLs are the leads that meet your lead scoring criteria as being worthy to be passed to your sales force. Many companies view SQLs as MQLs that have been properly qualified and meet the applicable criteria for budget, authority, need, and timeline. Simply put, if they qualify they’re passed on to the sales force. This rigorous qualification is one of the main functions of Sales Development Representatives. SQLs tell you whether you need to adjust or change aspects of the lead generation portion of your industrial marketing practices.
In the example above the Campaign B leads are $2 each versus the more expensive Campaign A leads, which are $5 each. So this is an easy choice, right? Campaign B is the clear winner. While cost per MQL is important, it’s critical you consider cost per SQL. For example if 90% of the Campaign B leads (at $2 each) are the result of a super-soft lead generation offer and thus unqualified you incur a lot of expense qualifying them and the end result is 10 SQLs. Conversely, if 30% of the Campaign B leads (at $5 each) end up being SQLs the result is 15 SQLs.
The key point is that you get 50% more SQLs in less time at less cost as your marketing staff needs to qualify half as many MQLs. Manufacturing CEOs need to have their marketing departments do as much as possible to lower the ratio of MQLs to SQLs. Clear as mud, right? As with most industrial marketing activities it’s a bit of a balancing act. But quality usually outweighs quantity. Marketing qualified leads that result from super-soft offers or the wrong sources clog you sales funnel. For best results have your marketing staff tighten up your offers and optimize your lead sources.