I'm asked quite often what one metric is the most important in defining marketing's success, and I believe it would have to be the number of opportunities created for the sales organization. Of course, the number of new leads is important, as well as marketing qualified leads, and we can't forget the pot of gold at the end...sales. However, the marketing department's #1 customer is sales, which makes providing sales-ready opportunities marketing's #1 goal. This drives all other work by marketing, and is the best way to prove marketing's worth to the entire organization.
As reiterated by John Coe, founder of the Sales & Marketing Institute in a recent blog post, "the major benefit (of the sales and marketing relationship) is the delivery of higher quality (not quantity) sales leads. Unless marketing communicates the benefit to sales, little or no feedback will be the result."
Outlined below are a few questions that should be answered to help marketing gain a greater understanding of the sales process:
- Begin with the end in mind...how many sales are required, based on average sales price of your products, in order to meet your goals?
- How many opportunities must be generated in order to meet those sales?
- How many of those opportunities are to be delivered by marketing, versus sales finding them through their own prospecting activities?
These are the golden numbers broken into months, that you should be targeting. Simple example:
Revenue Target = 12,000,000
Average Price = 10,000
New Sales Needed = 1,200
Close Rate = 50%
Opportunities Needed = 2,400
Marketing Contribution = 50%
Total Marketing Opportunities to be delivered = 1,200
Opportunities per Month = 100
Now keep in mind, this is not just total leads generated. No, no, no, these are opportunities in the sales pipeline, or as SiriusDecisions describes them, Sales Qualified Leads.
Of course, the next step is to be able to measure the number generated on an ongoing basis so as to track progress. But with just this goal comes focus. As well, it will highlight to the sales organization that marketing means business, and that we are willing to put some skin in the game to help achieve their sales targets.
It even feels like we should have some of our comp tied to these goals. For those in marketing that are starting to squirm, you should take a hard look at what goals you are trying to accomplish for your organization. If your activities aren't working toward delivering measurable opportunities for sales, they could quickly be on the chopping block. Remember, CFOs are looking for ways to optimize their expenditures.