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State of Inbound 2016 Part 1: Sales & Marketing

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The state of inbound 2016 - Summary - Part 1

Summary by David O'Donnell
Inbound Marketing Director

"Inbound means transforming how we do business to be more helpful, more human, more empathetic. It focuses on the whole process of turning a stranger into a delighted customer.

"Inbound is about matching the way you market and sell with the way people actually want to shop and buy."

HubSpot's eighth annual State of Inbound this year looks at the current state, the future of inbound marketing, and emerging trends and technologies in an increasingly "inbound world".

In the State of Inbound 2016 Part 1, we have a close look at Sales & Marketing trends in 2016.

Today's Marketing and Sales Priorities

  • 74% of companies say converting/leads to customers is their number one priority in the next year
  • 57% said their priority was growing traffic to their website
  • 46% increasing revenue derived from existing customers
  • 42% proving the ROI of marketing activity
  • 32% sales enablement
  • 27% reducing the cost of contacts/leads/customer acquisition

An important takeaway from these stats is that organisations are increasingly vigilant about monetising marketing efforts.

For specific inbound marketing projects, 66% of marketers are focusing on growing SEO, blog content creation, and content distribution. The humble blog continues to be marketers' bread and butter, with 60% prioritising blog content creation.

Inbound marketing top priorities

Despite the fact that Sales is undergoing a radical transformation right now the function's primary directive is the same: "Sell more, better, faster" with 70% of respondents committed to "closing more deals" over the next 12 months.

Inbound marketing top sales priorities

So, what is the current, average lead conversion rate? According to respondents, the average lead-to-customer conversion rate is below 20% for almost half of respondents.

"Social selling" is growing more and more important for salespeople, jumping from 22% in 2015 to 28% in 2016.

Today's Marketing and Sales Challenges

Access to tools to help track campaign results continues to be a primary concern for marketers today with 43% suggesting proving ROI on marketing activity is their biggest challenge.

Inbound marketing top challenges

From a sales point of view, identifying prospects is the "thorny end" of the sales process. The survey attributes this difficulty to a lack of prospect familiarity with the product for sale with 63% of survey takers "somewhat" or "not at all" knowledgeable about their companies before a sales rep makes first contact. Conversely, when the prospect is overly knowledgeable about the company or product, this too makes it difficult. Prospecting is at its optimum when the lead is somewhat/moderately familiar.

The Evolution of Marketing and Sales

Marketing priorities have remained relatively static over the past three years, with conversions and increasing web traffic continuing to hold top spot.

Inbound specific, generating traffic and leads is the biggest challenge in 2016, however, proving ROI continues to be a challenge for marketing in second spot.

When asked what is more difficult to do in sales today, than two or three years ago, respondents say eliciting a response from prospects is the biggest challenge.

A quarter of sales respondents say they also face more complex purchases with multiple decision makers involved in the sale; 14% also say using their sales technologies have become more difficult, reflecting the complexity of sales tools available today and the sheer number of tools some sales representatives have at their disposal.

Inbound marketing is firmly focused on conversion and traffic growth over the next 12 months when compared to outbound marketing approaches. Comparatively, outbound is more inclined to focus on sales enablement than inbound in 2016.

Compared to outbound marketing teams, 24% more inbound organisations will be focusing on content creation and 11% more are prioritising organic reach.

Companies that described themselves as "outbound shops" also seem to have slightly more trouble with proving ROI (49% versus 42%), securing budget (33% versus 26%), and training their team (23% versus 18%) compared to their inbound marketing teams.

Inbound marketing top marketing challenges

Inbound's Role in Marketing Effectiveness

When asked "Do you think your organisation's marketing strategy is effective?" Only 61% of respondents said yes.

Looking at organisational composition, inbound organisations were four times more likely to highly rate their marketing strategies.

Inbound marketing effectiveness

Ineffective teams cited managing their website as a challenge 10% more often than effective teams. It is suggested that perhaps a lack of control or technical limitations to ineffective teams' websites impacts upon lead quality.

In a separate question about the best sources of leads sales teams receive, ineffective marketing teams were twice as likely to admit the best leads were produced by sales compared to effective teams.

Just 17% of effective marketing teams ranked self- sourced sales leads as the highest quality leads for their organisation, compared to 35% of ineffective teams. Many components contribute to a marketing team's failure to provide quality leads to Sales, but with a third of ineffective marketing teams saying they have trouble managing their own website, this barrier contributes to Marketing's failure to provide great leads.

67% of effective marketing teams believe inbound marketing strategies provide the highest quality sales leads.

Why Marketing and Sales Alignment Is Critical

"The handshake between Sales and Marketing tends to produce the most measurable results for a marketing team."

The less aligned Sales and Marketing are, the more negative the outlook.

Marketers in companies with SLAs have more faith in their marketing strategy. Smarketing has been a core tenet of inbound for years and the data shows how critical it is to Marketing's success. Just 22% of respondents have a formal SLA between Marketing and Sales, and a further 44% told us the two organisations were generally aligned.

Inbound marketing philosophy works hand in hand with the concept of smarketing, and the data shows that when the two work in tandem there is a higher chance for success.

Of those with an SLA, 82% said their marketing strategy was effective.

For those who said they were misaligned, only 20% thought their marketing strategy was effective.

According to the survey respondents, the most powerful combination of characteristics for an effective marketing organisation is:

  1. Be inbound
  2. Have an SLA between Sales and Marketing.

Inbound organisations with SLAs are over five times as likely to rate their marketing strategy as effective compared to outbound organisations with misaligned marketing and sales teams.

Inbound marketing characteristics

Effective strategies produce results but the data shows that those who feel confident in their marketing strategy are over two times as likely to get higher budgets for their marketing teams.

We Need To Talk: Marketing and Sales' Disconnect

The data shows marketing and sales teams need to continually communicate and refine their SLA, even if there's already one in place.

  • Marketers (59%) say inbound practices generate the best quality leads.
  • Sales people (38%) say leads directly sourced by Sales are of superior quality.
  • 70% of Sales respondents gave marketing driven leads a 3 out of 5 or less for quality.

When sales professionals were asked where the best leads come from, they rated the ones sourced from Marketing dead last. When these responses were sorted by seniority, it appeared that senior sales leaders value referrals the most. All other groups consistently rated Sales-sourced leads the highest.

The difference in where quality leads comes from is pronounced inbound and outbound marketing teams are compared.

73% of inbound marketers say the best leads originate from inbound practices, compared to just 18% of outbound marketers.

Given the different focuses their differences are expected. Interestingly, 20% of inbound marketers and 33% of outbound marketers admit that the best leads are sourced directly by Sales.

When Sales' ratings of leads against Marketing and Sales alignment are broken down, it seems that sales organisations with SLAs are more likely to rate leads from Marketing higher.

When Sales and Marketing have agreements in place that a) defines a good marketing lead and b) guarantees a work rate from Sales, the two groups work best together.

Inbound marketing importance of communication

"There's room for improvement on Marketing-sourced leads, but Marketing won't know what needs to be fixed unless there's a feedback mechanism built into the Marketing and Sales relationship.

"Whether it's truly the case that Marketing is failing to deliver enough quality leads to Sales or not, marketers should be aware of salespeople's low opinion of their work, and take action accordingly."

The Undeniable Connection Between ROI and Budget

Being able to prove ROI is crucial to a marketing team's success and continues to be a top challenge for marketers today. Teams that can calculate ROI are 1.6 times as likely to receive higher budgets.

Marketing teams that can calculate ROI have 72% more confidence in their marketing strategy. Those who don't calculate ROI are much more mixed in their assessment.

Inbound marketing calculate ROI

When asked what drove marketing budget allocation, teams that calculated ROI (58%) cited past success with inbound. Those who didn't calculate ROI said economic conditions had the most impact on budget.

As marketing becomes more metrics driven, those who don't measure ROI risk losing out on budget.

The State of Sales Technology

Lack of integration is at the heart of dissatisfaction in 2016: the survey data says it is time for sales and marketing tech vendors to have an integration conversation. "Lack of integration" and "manual data entry" tied as respondents' number one CRM challenge.

Inbound marketing existing CRM

Only 21% of salespeople said they considered their CRM software's integration capabilities with marketing software or other tools to be high quality.

Silver lining being that year on year it appears there has been improving CRM adoption with 46% of those surveyed using CRM to store lead data today.

Shockingly, 29% of salespeople are spending an hour or more on data entry every day. (And the more time sellers spend on data entry, the less time they have to sell!) So there is still room for more improvement on CRM adoption moving forward.


In our next post we'll continue with the State of Inbound Part 2: Inbound Marketing. Stay tuned!

See also State of Inbound Part 3: The Future of Marketing.

Credit: All images from HubSpot's State of Inbound 2016 report.

Marketing Automation Demystified

For more information contact:

David O'Donnell

Equilibrium | Inbound Marketing Director
(08) 9218 8622
david@equ.com.au
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