The Complete Guide to B2B Marketing: New Tactics, Tools, and Techniques to Compete in the Digital Economy by Kim Ann King

Author:Kim Ann King
Language: eng
Format: mobi, epub
Publisher: Pearson Education
Published: 2015-03-22T14:00:00+00:00

4. These SALs are then further vetted, at which point one of three things can happen: (1) They lead nowhere and get tossed back to marketing, (2) they turn into sales-qualified leads (SQLs) that stay in sales to be worked, or, even better, (3) they turn into sales-qualified opportunities (SQOs), which then lead to closed business.

This is just one example of a lead management model, and there are many others. For example, you could segment your funnel by probability of closing (5–100%), or what stage they are at in the buyer journey (Awareness, Research, Evaluation, Decision), or whether they are top of the funnel, middle of the funnel, or bottom of the funnel. It does not matter how you describe your sales cycle as long as you have developed relevant criteria for each stage and a process for moving leads toward close.

How do you know how many leads will convert? It depends on your lead-to-close rate. Typically, a quarter of all B2B leads are not even qualified and never will be—for example, companies that don’t fit your buyer profile and will never purchase your product, even if they are interested in it. You’ll have a lot of inquiries, but not a lot of MQLs—in my experience, only about 3% to 10% of leads/inquiries are ever qualified enough (via score and grade) to pass to sales; how many of those turn into actual new business depends on your close rate. Based on SiriusDecisions’ research, a B2B company needs to generate 351 inquiries to acquire one new customer. If you don’t know your own company’s lead-to-close rate, use that as an assumption for the first year and see how well you perform against it as a benchmark.

I recently sat down with Keith Cooper, Executive Chairman of SiteSpect’s Board of Directors, who explained the fine art of revenue forecasting. Typically your company’s bookings are described as total contract value (the monetary value of a deal over time) and annual contract value (the monetary value of the deal in this fiscal year). Revenue, on the other hand, is the actual money you’ve received in-house. So, if you book ten two-year deals worth $500,000 each, you have brought in a total of $5 million in total contract value and $2.5 million in annual contract value. Deals closed earlier in the year are more likely to deliver revenue in that year; however, if none of your new deals pays an invoice this year, that’s zero dollars in revenue received. See how complicated this can get?

So that’s lead quantity and how it relates to revenue forecasting. Let’s talk about lead quality. The process for answering the question of what is a qualified lead requires an active and ongoing conversation and alignment with your sales team. You will need to establish what kind of score (level of activity) and grade (company fit) the lead has. As we read in Chapter 5, “Marketing Automation,” you’ll want to pass leads only to sales that show a high level of interest (high score) and a good fit (high grades).

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