How to Avoid Bad Sales Outcomes from Good Marketing Programs

Disclaimer: I'm conflicted when it comes to giving fellow marketing people advice. On one hand, it feeds my ego. On the other hand, we all compete with each other and frankly my company pays me for IP and execution — not to share good IP. But, I love demand generation, the challenges and complexity it brings.

Spreadsheets are only as good as the garbage you put in them.

spreadsheets and data

You've got your spreadsheet or app with funnel conversion metrics that tell you how many leads, MQLs, meetings, opps you need to get to your pipeline and revenue targets. If you don't, um.... maybe you should.

Some marketing organizations have little view or interest in the revenue side. I've been part of a few companies where marketing's standard line was "we hit our lead targets." I don't quite understand how passionate, driven marketers would stop there. Why wouldn't they be massively interested in understanding the revenue implications, tuning to improve outcomes. It's also fair to say, you can drive a good lead to a bad sales process and end up with nothing. Accurate pipeline and revenue attribution is a meaty, hard task, worthy of an entire two-day conference.

Getting real about marketing's financial contribution to the company's bottom line means also confronting hard issues. Your sales counterparts do this all the time (they live and die by the very public number). Now, some of you might read this and say "duhh, I'm way past that." If you are, rock on, stop reading and send me some kind of “you're an idiot" note. If not, get rocking.

Here are 3 big questions that I rarely want to hear the answer to, but I have to:

  1. Do sales and marketing have a common definition of an opportunity/hand-off point?
  2. Have leads and MQLs gone up while conversion rates have gone down?
  3. Is the makeup of your lead sources changing?

1. Common Definition of an Opportunity

If you don't have both a common definition an opportunity (or the point a lead can move to an opp or SQL) and enforcement of adhesion to that definition, then you have too much variability. Variability grows as the sales force expands. And, variability means unreliability. I've had this exact conversation with sales leaders and they get it. Sales leaders HATE variability and lack of predictability. As a marketer, it will be nearly impossible to impose your will (however right) on the sales force. Instead, you need to get executive buy-in through the vision of improved accuracy and as a result, improved execution to plan.

Frankly, if sales is unable to commit to a common and enforced definition, then it's very hard to commit on a pipeline target.

2. MQLs up, conversions down

I see this a lot and it can lead to an absolute mess if the concept of "serviced lead" (ones where SLAs were met) is not created. It's a truly slippery slope that looks something like this — 1,000 MQLs are created, but you have capacity to do quality follow-up on 800. The conversion rate on these leads drop. If you push 1,000 leads into a lead follow-up group (SDR, inside sales, etc.) that can only realistically handle 800, you typically see across-the-board reduction in lead follow-up quality in an effort to hit SLAs and keep their manager off their... um, butts. So, everyone is pissed. Leads weren't serviced or serviced badly, conversion rate falls, pipe targets miss and program ROI looks bad. But wait, since conversion fell, let's re-factor that into future plans. Now more leads need to be produced leading to the cycle of doom — crappy lead conversion rates and big spend generating them.

So, being realistic on lead follow-up SLAs and understanding the conversion rate on "serviced leads" significantly improves the reliability of conversion rates. The rates you can plan on in the future.

Note — I don't want to discount that market conditions, competitors, product issues and more can (and will) influence conversion rates.

3. Makeup of your leads

It's really important to understand and breakout conversion rates by lead channel. Don't blend them. Who doesn't love amazing conversion rates on inbound leads and subsequent deal close rate. While it feels good, it does more harm than good to get caught up in the hype and over-factor them into your math. Break them out, way out. As any business scales, they must temper expectations on "contact me"-type leads. An inbound lead asking for a price quote is going to convert and close not only at a way higher rate, but also faster. Plan ahead — start generating a realistic forecast graph on these leads, the pipeline expected and find the magical and scary moment that these type of leads don't get you to your number. Don't let anyone convince you that simply because quotas go up, so will revenue from this source. It's like me wishing in high school that short men would become en vogue.

Note — "contact me" leads are a great leading indicator of pipe and revenue conversion trends. If those are waning, then you'll see the same thing on other programs.

Each company’s variables will differ (variable variables). Maybe your ASP (average selling price) will go up and that will fill the pipeline gap with the same lead volume. Maybe channel partners will fill that gap. Perhaps your company only gets more popular and "price quote" leads just keep rocking. Those are all great, but your chances of failing are much lower when you plan more conservatively — you plan for the harder fought battle and the easy deals are icing on the cake, not the cake.

Either way, it's an important practice to identify when that gap might occur. It will mean that you need to start timing new programs and processes with sales well ahead of that. It could be investing in an outbound lead-gen team, hitting more events and/or cranking up third-party lead programs.

At the end of the day, you need reliable insights to stoke some flames, put out others or light new ones.

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