I am a fan of Marketo. I think they are providing outstanding ideas and methods regarding new business development. In this post, I am simplifying what they wrote in their blog post of July 12, 2010.
Marketo uses a “revenue stage model” that formally defines the new customer acquisition process, starting with awareness and moving through marketing and sales, to closed business and beyond.
A “Revenue Stage Model” is a step by step process that a future customer must go through. There are three stages in this journey:
- Inventory Stages: where leads reside until they are ready to move to another stage. There is no time limit on an inventory stage. Examples include: the “prospect pool”, where leads are nurtured until sales-ready, or the “active opportunity”, where leads are interacting with us, but they have not indicated they want to proceed..
- Gate Stages: are qualification checks. After the prospect has indicated they want to proceed, we must approve such. For example, we want leads from companies with more than $100 million in revenue. At this stage, if the company has the desired revenue, the lead moves on, if not, it moves to the disqualified stage.
- SLA Stages: SLA stands for “service level agreement.” (I would label this a “Contact stage”): to be used when there is a defined maximum time in which a lead needs to be evaluated. For example, when a lead is determined to be “sales ready,” it could move into a “marketing qualified lead” stage where an assigned sales rep has 14 days to contact the lead and decide whether to  accept the lead,  disqualify it or  recycle it back for further nurturing. (After the 14 days, it becomes “stale” – which triggers an alert for sales management, or reassigning the lead to a different sales rep.)
A revenue stage model is based on three fundamental principles:
1. Sales resources are relatively expensive. To provide the highest value, sales should not engage with prospects until prospects are ready to engage. Sales interactions occur late in the pipeline, once leads are well qualified and the prospects are ready. (Use lower cost channels, such as marketing, to develop relationships prior to.)
2. Leave no lead behind. Keep leads flowing forward, or backward to marketing. Don’t let them sit idle. (And there is a process for the disqualified lead, too!)
3. A prospect’s journey from initial awareness to customer is often non-linear. Sometimes leads that are originally deemed “sales ready” are not. These leads should be recycled back to marketing for more nurturing.
Stay tuned for a look into Marketo’s own revenue model. Until then, check out Marketo’s SlideShare for Revenue Cycle Analytics presentation.