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01/09/2007

IDC CMO Research Study Reveals Significant Gaps in the Lead Management Process, Though Best Practices Are Emerging

FRAMINGHAM, MA – JANUARY 9, 2007 – Across the tech vendor community, approximately 50% of marketing investment is allocated to demand generation and about one-third of that investment is ear-marked to directly support the sales force. New research from IDC shows that, for most vendors, this complex and expensive intersection of marketing and sales remains very much a "work in process." However, IDC observes pockets of excellence that are emerging as executives are starting to come to grips with the escalating costs of selling and marketing in today's tech industry.

According to IDC's CMO Advisory Practice – which undertook a study evaluating which IT vendors have demonstrated best practices in lead management process development and execution – marketing's lead management process at a majority of tech vendors fails to provide even the most basic need of establishing a consistent global definition of a lead. Other failure points include data collection, lead qualification, sales hand-off, lead nurturing, and performance measurement. And only a few of the companies surveyed were able to demonstrate their impact on the sales pipeline.

"Developing and maintaining an efficient and effective lead management process is mandatory for marketing's success in today's technology organization," said Michael Gerard, director of IDC's CMO Advisory Practice. "With the correct people, processes, and infrastructure in place, marketing can better establish its credibility in the organization as well as improve its return on investment. This study provides detailed frameworks, performance metrics, participant anecdotes, and company-specific case studies to guide marketers in improving their lead management process."

Essential guidance offered in this study includes the following key points:

— CMOs must dedicate a lead management individual or team to develop and govern a marketing lead management process across the organization, ideally in collaboration with a similarly tasked sales lead manager. Senior management buy-in and support is required at process development, roll-out, and governance.

— Providing quality leads and establishing the ability to track leads will only be possible once marketers and other system users understand the need for a lead management process and its impact on the success of the marketing function. Many leading sales organizations tie use of their CRM system with compensation; it's time for marketing to follow suit.

— Performance measurement in the lead generation process will enable marketing to quantify its true impact on the sales pipeline (e.g., marketing-generated and marketing-enhanced leads and deals) and lead velocity. This will also enable marketing to establish a direct feedback loop to improve its campaign effectiveness along the entire customer development lifecycle – from awareness through advocacy.

This study, IDC CMO Advisory Best Practices Series: Marketing's Lead Management Process (IDC document #204760), provides a framework for evaluating the current pitfalls in the lead management process, and highlights best practices and key success factors identified from executive interviews with lead management professionals from 16 leading business-to-business, high technology companies. This study also includes applicable findings from two IDC roundtables conducted on lead management practices as well as IDC CMO Advisory Practice's annual benchmarking study. This document is the third in a three-part series of marketing best practice studies for 2006. Prior best practice studies include: CMO Advisory Best Practice Series: New Product Launch Processes at Autodesk and Avaya (IDC #202467) and Tech Marketing Management Best Practices: Performance Measurement for Advertising, Events, and PR (IDC #34983).

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com .

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