U.S. COMPANIES SEVERELY MISMANAGING NEW BUSINESS OPPORTUNITIES, CMO COUNCIL/BPM FORUM SURVEY FINDS
Marketing and C-Level Executives Are Dissatisfied with the Way They Generate New Business Yet More than Half Lack Formal Process to Correct the Problem
PALO ALTO, Calif., November 22, 2004-U.S. companies may be suffering huge losses in revenue due to mismanagement of new business development activities, according to an online survey fielded by two leading executive organizations. Many of the corporate officers polled believe revenues at their companies could increase by more than 20 percent through the adoption of improved prospect harvesting practices.
Entitled "Gauging the Cost of What’s Lost," the study suggests that while companies may be good at generating large volumes of business leads, most prospects languish because sales is too frequently focused on only closing the most promising and qualified short-term opportunities. According to business acquisition experts, an estimated 80 percent of leads are typically lost, ignored or discarded, compromising top-line revenue growth. Some 73 percent of respondents in this survey say their company has no process for re-qualifying and revisiting business leads.
The study is based on a third-quarter, 2004 online survey of nearly 800 respondents in which CEOs, CFOs, COOs and Division or Group Executives represent 47 percent of the respondents, while nearly 20 percent represent CMOs and Senior VPs or VPs of Sales. Approximately 13 percent of the respondents represent companies with more than $250 million in annualized revenue. The study was fielded by the Chief Marketing Officer (CMO) Council, whose members include more than 1,000 top decision makers at high-technology companies, and the Business Performance Management (BPM) Forum, an elite group of 500 senior managers dedicated to furthering operational visibility and financial accountability at global corporations.
Also among the survey findings:
In "Gauging the Cost of What’s Lost," nine out of ten survey participants said new customer acquisition is important to business growth. Yet, approximately 44 percent of all respondents are unsatisfied with the way their companies go after new business. Nearly three-quarters of respondents believe they could increase revenue at least 10 percent with better business development practices; 37 percent say they could increase the top line by more than 20 percent.
- While 53% of respondents believe the sales and marketing functions have a close and collaborative relationship, only 7% feel the two groups work together very effectively to harvest business prospects.
- 56% of the respondents don’t have a formal process for generating, qualifying, certifying and validating new business opportunities.
- 56% of respondents convert less than 10% of their business prospects into deals; approximately 30% covert less than 5%.
- Most respondents are not satisfied with their conversion rates; only 5% are very satisfied.
- Nearly half of the respondents say it takes at least six months to close a deal.
"New business acquisition and conversion is challenged in today’s commercial enterprise, and the problem is significantly impacting top-line performance," said Donovan Neale-May, Executive Director of the CMO Council and founder of the BPM Forum. "Marketing today is utilizing new digital channels of interaction to gain customer access and response, but current qualification and filtering systems are unable to handle the influx of leads. Companies have to devote much more attention to how they target, capture, qualify, manage and track pipeline opportunities within their organizations."
To undertake the research, the CMO Council and the BPM Forum joined forces with BusinessWeek Research Services and Sales and Marketing Strategies & News magazine. As the online survey was conducted, it was accompanied by one-on-one interviews with senior marketing executives at several major companies. The full report, with detailed findings from the survey as well as a full analysis, will be made available this week for download at www.cmocouncil.org and www.bpmforum.org.
About the BPM Forum
The BPM Forum is an organization advancing the understanding of business performance management techniques, technologies, and processes in global enterprises with more than $400 billion in combined annual revenues. The not-for-profit organization brings together over 220 influential business line managers and senior executives overseeing enterprise finance, operations, and technology. Forum members will join in the pursuit of innovations in business performance management, a term that describes the methodologies, metrics, processes and systems used to monitor and manage a companyâs business performance. Driven by demands for improved operational accountability and corporate governance, the BPM Forum will research and promote cutting-edge methods to strengthen financial management disciplines, and drive performance improvements across large organizations. For more information or to nominate a member, please visit http://www.bpmforum.org
About the CMO Council
The CMO Council is a private, non-profit organization dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior marketing and brand decision-makers in the global technology industry. Based in Silicon Valley, the Council works to further the stature, credibility, influence, and understanding of the strategic marketing function among business executives, opinion leaders and critical stakeholders in the technology sector. Nearly 1,000 technology companies are currently represented on the CMO Council, accounting for well over $500 billion in aggregated annual revenues. These include top decision-makers controlling more than $40 billion in global marketing expenditures for many of the world’s foremost computer systems, software, networking, communications, consumer electronics, component, distribution, and consulting brands. www.cmocouncil.org.
The world’s most widely read business magazine, BusinessWeek is a vital resource for nearly 5.6 million readers worldwide who require insightful coverage and commentary to stay ahead of their competition. www.businessweek.com
About Sales and Marketing Strategies & News
Sales and Marketing Strategies & News delivers information to decision-makers who control sales, marketing, automation, e-commerce, incentive, promotion, and advertising functions. The readership consists of executives in corporate management positions as well as in sales, marketing, advertising, sales promotion, travel, training and meetings management. www.salesandmarketing.com