The Impact of Inbound Marketing on the Demand Creation Waterfall
We've conducted benchmark studies of conversion rates within the demand waterfall for many years; we update this data as market and organizational dynamics change. Historically, the characteristics that have separated best-in-class from average performers have included optimized processes and the use of automation technology; as inbound marketing becomes more important, it too will emerge as a distinguishing characteristic.
The main shift that organizations will discover as they track more inbound activity is how little they know about individuals at initial inquiry stage, prolonging what was previously a short, one-touch step. In a typical outbound inquiry process, an email is sent to a list inviting recipients to take some action (e.g. download white paper, register for a Webcast). The goal is to get the prospect to click a link within the email and fill out a form to receive the content, thus launching the journey to marketing qualified lead (MQL). In the inbound paradigm, an individual might visit the Web site and download ungated content that doesn’t require registration, or interact with company employees through social accounts, all without being identified. In each case, there is a limited amount of information that can be gathered about the individual, which delays the start of the MQL journey. Through cookies and reverse IP lookups, a prospect record can be created that contains a certain amount of potential demographic, firmagraphic and activity data, but this data will only get identification so far. There might be an existing record for this individual within the database, but until they can be matched, two streams of data (one identified, one anonymous) must be maintained. Although a single field of matching information (e.g. a Twitter handle) could be enough to match these records, given the amount of contact data that most companies maintain and the standardized identification criteria that marketing automation platforms typically allow (e.g. email address), this matching can often only be achieved through data management software or an external provider.
The ability to drive more inbound inquiries requires not only rethinking marketing strategy and tactics, but also embracing the reality that early waterfall stages can’t be accurately measured until after deals close. Whether or not organizations proactively adopt a more integrated campaign approach, inbound marketing will blur the delineation between stages at the top of the waterfall. Reputation programs will blend more with demand creation programs meant to drive inquiries; together, they will generate hand-raisers at the waterfall top. At the same time, the MQL stage is becoming compressed for many companies due to inbound responses, because such individuals often quickly self-qualify based on their actions.