How many sales leads do you need? Christopher Ryan, CEO of Fusion Marketing Partners, says a blog he posted a couple of years ago answering that question continues to be one of the most popular pages on the company’s website. To reach a monthly target for leads, Ryan says you need seven pieces of data:
1. Monthly revenue target – your monthly sales goal from all revenue sources
2. Marketing driven revenue – the portion of the total monthly revenue that marketing is responsible for, not counting cross-sales, up-sales and revenue that comes in (regardless of what marketing does)
3. Average sales price (ASP) – the average revenue contribution from each new sale
4. Number of marketing-driven deals – this is the marketing-driven revenue divided by the ASP
5. Opportunity-to-sale ratio – the percentage of pipeline opportunities that you close
6. Qualified lead-to-opportunity ratio – how many qualified leads it takes to produce one opportunity
7. Inquiry-to-qualified-lead ratio – how many inquiries it takes to produce a qualified lead
Putting data to work
When determining your sales leads quota, Ryan offers these tips:
Do not exaggerate what you can do. In the excitement of the planning session, you may be tempted to pledge to generate more leads than is practical or even possible. Don’t do this! Better to under promise and over deliver.
Document the numbers in a service level agreement (SLA). Numbers written on a whiteboard are not sufficient. You need to codify what you agree to with your sales counterparts and share this document with key executives — especially the CEO and CFO.
Make sure the sales department has skin in the game. If you are on the marketing side, don’t fall into the trap of assuming responsibility for all of the deliverables. You are in this together and the sales function is just as important to a workable revenue growth plan as the marketing function. To produce the best results, you need a team
of equals.
Too many leads can be a problem. Sales managers usually don’t complain about having too many sales leads but in fact, this can be an issue. A flood of leads could mean that otherwise qualified leads fall through the cracks and are not contacted. Also, sales reps can get discouraged when they spend quality selling time on unqualified prospects. Better to ration leads to make sure there is maximum efficiency at every part of the process.
Don’t be a gloater or “gloatee.” If you are the marketing leader and fail to make your numbers — while your counterpart in sales makes his/her numbers — do not be intimidated or play the victim. Likewise, if your department outperforms sales, do everything you can to help them make their numbers next time. Remember, you are in this together.
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