American business is challenged today to lift its game to new levels of productivity and effectiveness. Improved performance – continuously achieving higher rates of return on investments of capital, time and other measurable corporate assets – must become an obsession for managers seeking to ensure the survival and success of their businesses in an era of intensified global competition, increased customer expectations and uncertain economic growth. Improve the Return on Resource Burn is a thought leadership initiative that studied business performance in one of the most critical areas of endeavor for the modern commercial enterprise, business demand acquisition. Creating and managing the new business pipeline – the process of generating, capturing, qualifying and converting business opportunities – is essential to the growth and profitability of companies across every industry and geographic market. As this study showed, business demand acquisition is a mission-critical process in which companies invest heavily, but generally are dissatisfied with the results. Put positively, it is a business process ripe for performance improvement.
The initial phase of our research was based on a survey of top marketing, sales and business executives, entitled Gauging the Cost of What's Lost, which was conducted in the third quarter of 2004. It measures these executives' attitudes, perceptions and concerns about the effectiveness of their companies in generating prospects, sustaining deal flow and closing business. It looks at investment levels and satisfaction with the return on those investments, and reviews such key performance indicators as time to business closure, lifespan of business leads, and integration of sales and marketing in closing business. The study included the responses of 772 top decision makers, including more than 200 c-level executives, from North American companies ranging in size from a few million dollars to billions of dollars in revenues. Approximately 12.7 percent of respondents represented companies with sales of $250 million or more. Respondents represented virtually every industry and major market segment. The three most represented industries were information technology (15.9 percent), professional services (15.5 percent) and financial services (8.3 percent).
The study was conducted under the auspices of the CMO Council and BPM Forum. With a membership of more than 3,000 top technology marketing executives, the CMO Council is a highly respected international organization dedicated to intellectual capital development, knowledge sharing and advocacy of the CMO function. The BPM Forum is a leading executive organization dedicated to research and advocacy of business performance management practices, processes and systems in global enterprises. To field the study, the CMO Council and BPM Forum teamed with two respected media partners, BusinessWeek and Sales & Marketing Strategies & News.
Based on the combined responses of executives in this survey, it seems clear that business development and acquisition should become a focus of greater measurement and process improvement among top executives. Companies are investing a significant percentage of their revenues in activities directed at business lead generation and closure, but most do not optimize those investments by developing formal processes for qualifying, certifying and validating new business opportunities. By their own admission, North American companies are wasting time, money and valuable business leads - leaving big money on the table every quarter. They are letting valuable business prospects, for which they have spent significant sums, simply evaporate into thin air because they have no process for sustaining and refreshing leads over time. They are making insufficient use of their marketing and sales talent and resources because of ineffective integration between these two camps. And, based on the attitudes of respondents, dramatic returns, as measured by profitability and revenue growth, are possible for companies that make improvements in demand generation and closure processes. We sincerely hope that executives take their own advice and direct greater management attention toward this opportunity and challenge.
For more information contact Eric Goldman at 646.652.5203 or egoldman@globalfluency.com.
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