Revenue Cycle Analytics — Part Two

We’ll continue our examination of revenue cycle analytics by describing the three categories of revenue stages:

1)    Inventory Stages – These are holding stages where prospective leads accumulate until they are released to later stages. A prospect pool is used to nurture leads until they are ready to be contacted by salespersons. There is no definitive timeline for the opportunities contained in this stage.

2)    Gate Stages – Stages in which leads and accounts undergo a simple qualification check. For instance, you may only be interested in companies that have over $250 million in revenues. In a gate stage, companies that are too small are eliminated.

3)    Service Level Agreement Stages – These define a time period that drives a deadline for evaluating leads in detail. Once again, leads that don’t pass muster are disqualified from further action. Typically, when Marketing qualifies a lead, Sales has a week or two to contact the lead and decide whether to pursue, hold, or disqualify it. Leads that sit in these stages for too long go “stale”, which can cause them to be reassigned to a more responsive sales representative.

There are certain best practices within the revenue stage model that are based on a few basic principles:

• Marketing resources are cheaper than sales resources. Don’t bring in the sales force until a lead is sufficiently ripe for exploitation by Sales. Interaction with Sales should occur relatively late in the lead pipeline, when leads have been well-qualified. Before this point is reached, Marketing can rely on lower-cost channels to help develop relationships.
• Never let a lead “slip through the cracks”. If you make sure you implement service level agreement stages, you are less likely to overlook a lead. Either pursue the lead or recycle it for later attention. Your marketing inventory of leads should be rather short so that prospective customers don’t suffer from neglect.
• A lead’s progress through the pipeline is not linear – backtracking and reclassification can occur before a lead becomes sales-ready. Leads that are detoured can eventually bear fruit if nurtured properly. If you establish a set of quantifiable transition rules, you can map out a path in which sidetracked leads can be recycled.

Transition rules determine when a lead advances to a new stage. For example, an inactive lead may become an active prospect by responding to a new marketing campaign. The bottom line is that each lead must be carefully evaluated and tracked on the chance the lead will eventually become a customer in the current or a future revenue cycle.

Eric Bank