Marketers are increasingly held responsible for contributing to revenue. With that, CMOs need to carefully plan realistic and manageable lead generation goals throughout the funnel alongside sales. SBI has mapped out a three-step process and a Lead Generation calculator to help get you started.
Over the past few years, marketers are increasingly held responsible for revenue goals. If you’re like most CMOs, you can identify with at least one of these:
- You’re not sure how to calculate the number of leads you need to generate.
- You rely on attribution models, which the sales team tends to distrust.
- You can only guess at how many campaigns to run. Your entire marketing budget is at risk.
With that, CMOs need to strategize and correctly set lead generation goals throughout the whole funnel alongside their sales team against revenue goals. Calculating lead generation goals start with a straight-forward three-step process and a Lead Generation Calculator.
Step 1. Breaking Down the B2B Funnel
Before you can do the math, you need to master the B2B funnel. SBI has benchmarked leading sales funnel frameworks to come up with the best approach.
Our B2B funnel looks like this (from top to bottom):
- Inquiry
- A visitor fills out a form. Or you know the prospect, who’s returning to your site. Both have your permission to market to them.
- Marketing Captured Lead (MCL)
- The inquiry becomes MCL when you confirm a match with your ideal customer profile (ICP).
- Marketing Qualified Lead (MQL)
- MCL becomes MQL when a prospect meets a predetermined qualifier. The prospect shows the right level of interest online or with a lead development rep (LDR). MQLs warrant one-to-one nurturing.
- Sales Accepted Lead (SAL)
- Best practices call for a Sales Development Rep (SDR) to verify an MQL’s BANT (budget, authority, need, and timing) qualification. This ensures that the MQL is educated and interested enough to set up a phone call to become an SQL.
- Sales Qualified Lead (SQL)
- SAL becomes SQL when he/she has agreed to a meeting with sales. The prospect also meets predetermined qualification criteria.
- Opportunity
- An SQL is turned over to sales to close the deal.
Understanding your leads’ life cycle and ensuring marketing and sales interlock on definitions is half the battle. Now, you’re ready to dive into the lead gen calculator top CMOs use.
Step 2. Mastering the “Lead Waterfall”
To calculate meaningful lead gen goals, look at every stage of the funnel. Both quantity and conversion rate applies. At each stage of the funnel, the following formula should be used:
Required Marketing Contribution ÷ Average Conversion Rate = Number of Deals Needed
This example illustrates the “lead waterfall” concept.
Say your company’s revenue goal is $10 million. Marketing’s expected contribution is 25%, or $2.5 million. Divide $2.5 million by average deal price, which is $100K.
The number of deals needed to meet your goal is 25.
Try this:
We built a Lead Generation Calculator that makes this process easy to do in just a few minutes. This tool can help troubleshoot and set realistic expectations your lead funnel. The calculator also includes general benchmarks to assist with evaluating your numbers.
You can download the Lead Generation Calculator by clicking here.
The process itself, however, is a bit more involved. Before you plug in your own numbers, keep reading.
Step 3. Consider Other Lead Generation Variables
We advise against a do-it-yourself approach. There are multiple variables to think about and contend with, along the way.
The Tyranny of Averages
Conversion rates vary widely by product, division, and industry vertical. Businesses that can report these averages are executing at a high level. If you compare yourself to the best of the best, it’s easy to get discouraged. Don’t.
Your team should view these benchmarks as something to strive for. It’s okay to be scattered at the beginning of the process. Develop a baseline in your first six months, then build goals off your baseline, and aim to improve it over time.
Click Rates vs. Click Paths
Your team has mastered click rates, which still matter significantly. But also focus on optimizing your click paths. You need good visibility as to how your leads are performing. You may discover that your costlier leads convert better.
The (Potentially) Long Road to Success
If you’re building this as an entirely new muscle, you’ll need to bring your whole team (executive and non-executive) on board and potentially work with external help. You face a protracted learning curve and lots of trial and error.
