Interview with Gartner’s Chris Fletcher

Chris Fletcher from GartnerChris Fletcher is the Gartner Analyst who wrote the recent Magic Quadrant for CRM Lead Management. He is part of Gartner’s CRM and E-Commerce research team and publishes research on CRM and e-commerce segments, including lead management, B2B and B2C e-commerce, e-commerce subscription/billing/payments, and partner/channel management. We caught up with Chris to get his response to some questions we have about the recent Magic Quadrant for CRM Lead Management.

What does the term CRM Lead Management mean?

The formal definition Gartner provides for CRM Lead Management is at the top of this year’s Magic Quadrant for CRM Lead Management:

Lead management integrates business process and technology to close the loop between marketing and direct or indirect sales channels, and to drive higher-value opportunities through improved demand creation, execution and opportunity management. Lead management processes take in unqualified leads from a variety of lead generation sources, including Web registration pages and campaigns, direct mail campaigns, digital marketing channels and sources, email marketing, multichannel campaigns, database marketing and third-party leased lists, social CRM and social networking sites, and tradeshows and other events (such as webinars, or customer or prospect events).  The outputs of lead management processes — qualified, scored, nurtured, augmented and prioritized selling opportunities — are handed off to direct sales and/or channel sales organizations.

The less formal definition I give clients is simpler: Lead Management, done correctly, provides qualified, augmented, scored selling opportunities to your direct sales and channel sales organizations, increasing top-line revenue and decreasing the time required to turn leads into cash (aka the “lead to cash ratio”).   

It is also worth noting that this year is the first time Gartner has ever published a Magic Quadrant for CRM Lead Management. 

 

Why does Gartner call it CRM Lead Management when LM is a process versus a technology?  Why not a separate Marketing Automation Quadrant?

I agree that Lead Management is a process, and not a technology: in fact, if you take a look at Gartner’s definition of CRM and Marketing Automation, we always stress to our clients that technology alone will not solve your problems: technology is a tool that enables CRM processes.

The question on why Marketing Automation doesn’t have its own Magic Quadrant is kind of a trick question.  There is no Magic Quadrant for CRM, and no Magic Quadrant for Marketing Automation either: there are instead almost 20 individual Magic Quadrants focusing on distinct segments of CRM.  Good examples of this include the Magic Quadrant for Marketing Resource Management, the Magic Quadrant for Multi-Channel Campaign Management, for E-Commerce, for Integrated Marketing Management, and the Magic Quadrant for Sales Force Automation, to name a few.   For an interesting perspective on the depth Gartner brings to this segment take a look at a Gartner note titled “The Elusive CRM Magic Quadrant” – it’s elusive because there isn’t one.

By the way, it is probably worth noting that “CRM” was the #1 search term clients used on Gartner.com in 2011.


Does Gartner view CRM and MA as the same?  It would seem yes if you are pairing SFDC and Eloqua/Marketo in the same Quadrant.

CRM is the top-level category: Within CRM Gartner includes Marketing Automation, Sales Force Automation, Customer Support and Service, E-Commerce, and Social CRM – among others.

Your question on including Salesforce.com and Eloqua/Marketo in the same MQ is a good one: Both Eloqua and Marketo were Leaders in this year’s MQ for Lead Management, based on their vision and on their ability to execute in this segment.  Salesforce.com (and it should be noted, Oracle/Siebel and Microsoft Dynamics CRM) appeared in the Quadrant because their products provided basic (at least in our opinion) lead management functionality (albeit as an integrated feature/function set within their CRM applications)  and met the technology criteria. 

 

Why was minimum vendor revenue raised to $20M? Doesn’t this exclude some good solutions?

This is one of the qualification criteria that I struggled with, frankly, and still think about even now that the MQ has published.  Short answer to your question: Yes, there are some very good lead management solutions out there from vendors that have not yet developed a revenue stream of over $20 M.  And yes, for a SaaS vendor, where the revenue stream is spread out over several years, as opposed to a licensed solution that enables the vendor to recognize the revenue immediately, this represents an even higher hurdle. 

On the other hand, Gartner clients are investing not only in a technology but also in a company.  Part of that investment rests on the viability of the vendor and their ability to survive over the next several years, and their ability to generate some minimum floor of revenue is one indication – definitely not the only, but one of the indicators – that shows viability. 

 

What is the biggest trend you see in marketing automation today?

I see two trends: one is innovation, and the other is maturity.  Innovation, because I see technology vendors that are able to react quickly to changes in the market, incorporate new functionality, and deliver it to their customers quickly and efficiently, often by leveraging the Cloud. 

I also see a growing level of maturity as marketing professionals learn what works for their company and their industry, and are able to evolve and change their lead management processes in near-time and provide better overall value to their firm.  As a proof point, take a look at the 2012 Hype Cycle for CRM Marketing Applications (due to be published in July) and look at the advancement that Lead Management has made as a category.  It’s very encouraging, and right now it’s a great segment to be covering as an analyst.

 

Comments

  1. says

    Regarding Chris Fletcher’s comments here – I find them both right on and a bit disturbing …
    Disturbing? How so? In regards to the threshold set at $20M as well as his answer to the question about this. [And oh, BTW, Marketing Automation is not my line of work]

    Gartner has a fiduciary responsibility to evaluate and report on the best technology solutions and to comment on the vision the solution provider(s) has for their growth in a specific market. The fact that Chris and the team have set a high threshold only indicates how out of balance and skewed Gartner tends to be toward larger vendor solutions; nothing ever changes!

    To say that “…Part of that investment rests on the viability of the vendor and their ability to survive over the next several years, and their ability to generate some minimum floor of revenue is one indication – definitely not the only, but one of the indicators – that shows viability.” is a fair statement but is that Gartner’s role? Gartner is conceding that by virtue of being included in an MQ or being excluded from an MQ that Gartner is professing to be a financial auditor in some respects. If you go by what is said here, Gartner is “indicating” they have done a complete audit of the companies represented in the MQ and the represented companies are financially sound … what happens when they turn out to be wrong?

    Isn’t up to the end-user buyer to perform their own due diligence regarding financial viability after they have been presented with an unbiased, third party evaluation of successful and leading technologies? Is Eloqua financially stable from the stand point of revenue? Balance sheet?The fact that they just went public? What measure will Gartner profess to be using in order to claim a company in the MQ is financially viable?

    Chris – regroup please and look at the technologies first and foremost and determine what is value going to deliver bottom line to the buyer, with the greatest efficiency, and let the buyer complete the equation. If a small company has a very innovative solution but no way to execute on it, then count them out for sure. On the other hand if a small company with a great competitive product, is growing, has a customer base that is extremely happy (particularly if they had switched from a previous vendors solution) and a vision that is very forward leaning, with an innovative team – count them in regardless of your ridiculous threshold – ! What happened to the Cool Vendors list – did you decide to leap frog that step and just create a high threshold MQ for this market?

    Enough said.
    DTW

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