MARKETING & SALES:

The Roadmap to Revenue

The Roadmap to Revenue

and its Tollgates

To build a successful lead process through an organization, marketing and sales need to be on the same page with their lead strategy. A recent Aberdeen Group Study of 199 marketing and sales professionals revealed how companies are doing as it related to converting leads at each stage on the road to revenue.

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ABOUT THE AUTHOR:

Maribeth Ross, Chief Content Officer,
Managing Director,
Marketing Effectiveness & Strategy

The disconnect between value and effectiveness can significantly hamper a company's strategy for marketing and sales, which is built on the ability to model revenue outcome.

THE BACKGROUND

Marketing and sales are in a committed relationship and, like any relationship, there has to be rules in place to keep harmony. Like rules related to the toilet seat and dirty clothes on the floor, the rules between sales and marketing need to be mutually agreed upon in order to set the right expectations and sustain a productive relationship. Countless Aberdeen studies demonstrate the parallel between good sales and marketing collaboration and good performance.

Today's world of the hidden sales cycle creates a need for increased accountability between sales and marketing. The buyer spends more time with marketing now than ever before, placing the burden on marketing to do a good job qualifying them for their engagement with sales. Sales, in turn, has to make good on marketing's work to engage the prospect by creating an opportunity with the prospect. And ultimately, they close the deal which proves a return on the company's investment in both organizations.

As a company considers the buying journey of their prospects and customers, they should be cognizant that there are natural checkpoints along the Roadmap to Revenue to ensure that all the gears in the machine are running as they should.

Get started on your journey along the Roadmap to Revenue.

THE STARTING LINE:

MARKETING DATABASE

The size of the marketing database can be used as an input to an equation, using the conversions of other tollgates, to predict the amount of revenue marketing can help create. Be aware that data quality has a profound impact on the Roadmap to Revenue. Reducing the number of buyers at the starting line due to bad or incomplete data can significantly impact how many make it to the finish line. Aberdeen estimates that the average marketing database has 70% good data. Accommodating for this by inflating your database size may help your output, but it will not take care of the additional risks that exist related to bad data. This accounts for why 66% of Best-in-Class companies employ cleansing and de-duping methods versus 36% of All Others.

BEST-IN-CLASS / INDUSTRY AVERAGE / LAGGARD DEFINED

58%
of respondents are not thrilled with the
quality of the data in their database.

Marketers are having difficulty finding the time to implement complex approaches to lead management along with pressures to “keep the fires burning.”

TOLLGATE ONE:

MARKETING-ENGAGED CONTACT

Often known as a response, our first tollgate deals with the conversion of a contact to a known prospect. At this stage, the contact is not yet sales-ready, but they have demonstrated some level of interest through their actions, such as completion of a registration form. Often joining the Roadmap to Revenue through inbound marketing activities (a very popular on-ramp these days), a marketing-engaged contact has moved from being an unknown website visitor to a known prospect. This evolution is an important one, as it often triggers nurture campaigns intended to move the prospect along in their journey. Widely adopted as a strategy, nurture programs are used by 58% of Best-in-Class, compared to 38% of All Others.

6%
of website visitors convert to a marketing-engaged contact, on average.
BEST-IN
-CLASS
6.7
INDUSTRY
AVERAGE
5.5
LAGGARD
3.1

CONVERSION RATE:

Respondents to our survey indicated an industry average conversion from website visitor to marketing-engaged contact of 5.5%, with Best-in-Class achieving 6.7% and Laggards considerably less, at 3.1%.

TOLLGATE TWO:

MARKETING-QUALIFIED LEAD

One of marketing's most important outputs are qualified leads. These leads, whether qualified by marketing automation or by a dedicated telemarketing resource, are the product of marketing's demand generation work, and are an essential input to the pending sales conversation. The definition of a qualified lead should be agreed upon by both sales and marketing, and incorporate the correct demographic and firmographic profile, contact information, and amount of engagement with marketing. It is from this definition that the marketing team develops its lead scoring model in order to automate the recognition of qualified leads by their marketing automation platform.

of marketing-engaged contacts become
marketing-qualified leads on average

22%
of marketing-engaged contacts become
marketing-qualified leads, on average.
22%
22%
of marketing-engaged contacts become marketing-qualified leads on average
BEST-IN
-CLASS
35.6
INDUSTRY
AVERAGE
22.3
LAGGARD
9.7

CONVERSION RATE:

Industry average conversion from marketing-engaged to marketing-qualified lead in our survey was reported at 22.3%, while Best-in-Class experienced 35.6% conversion, and Laggards reported a 9.7% equivalent.

TOLLGATE THREE:

SALES-ACTIONED LEAD

While the number of leads generated for sales is important, so too is the quality of those leads. The third tollgate in the Roadmap to Revenue measures the quality of the qualified leads sent by marketing by allowing sales to determine whether or not the lead meets the standards for sales action. The definition of a sales-actioned lead should be agreed upon by both sales and marketing, and should be a confirmation of the qualified lead status (the correct demographic and firmographic profile, complete contact information and amount of engagement with marketing).

Some companies choose to make this determination through a sales development rep that places the initial call to secure an appointment for field sales or an external channel partner. Whether this is conducted by either of these or by the sales rep themselves, there should be agreed upon reasons for disqualifying a lead at this stage. Contacts that are not yet ready to speak with a sales rep should be returned to be nurtured by marketing, rather than simply discarded as “bad leads.”

The creation of an opportunity by sales signifies the addition of the associated dollars to the sales pipeline. This is a serious commitment to the company that should have a definition associated with it.
The creation of an opportunity by sales signifies the addition of the associated dollars to the sales pipeline. This is a serious commitment to the company that should have a definition associated with it.
BEST-IN
-CLASS
53.4
INDUSTRY
AVERAGE
36.2
LAGGARD
10.6

CONVERSION RATE:

The conversion from marketing-qualified leads to sales-actioned leads is an important measure of marketing lead quality. There was a 36.2% industry average conversion of qualified leads to actioned leads, with Best-in-Class achieving 53.4%, and Laggards considerably less at 10.6%.

TOLLGATE FOUR:

SALES OPPORTUNITY

The creation of an opportunity by sales signifies the addition of the associated dollars to the sales pipeline. This is a serious commitment to the company that is important enough to have a definition associated with it. Requirements for opportunities often include confirmation of budget, authority, need and timing (referred to as BANT criteria), but companies should work to establish opportunity requirements that work for their own sales process and environment. This definition should be published, and all opportunities should be expected to meet the defined criteria.

33%

of marketing-engaged contacts become marketing-qualified leads on average

33%
of marketing-engaged contacts become marketing-qualified leads on average
BEST-IN
-CLASS
56.8
INDUSTRY
AVERAGE
32.8
LAGGARD
9.8

CONVERSION RATE:

The conversion from sales-actioned lead to sales opportunity begins to tell the story about sales' ability to convert qualified leads into pipeline for the company. Respondents to our survey indicated an average conversion of sales-actioned leads to sales opportunity of 32.8%, with Best-in-Class achieving 56.8% and Laggards considerably less at 9.8%.

TOLLGATE FIVE:

CLOSED DEAL

Signifying an important point in the Roadmap to Revenue, tollgate five is the decision point. While a closed deal can signify success or failure, it can also indicate a buyer's choice to take a longer journey. As such, a closed deal should also capture the disposition; closed-won, closed-lost, or return to nurture.

A closed-won deal signifies success for both sales and marketing. Like sales opportunites, a closed-won deal should have a definition of what's considered “closed-won.” In some organizations, a deal can be marked as closed-won when a purchase order is received. In other organizations, an opportunity can only be considered closed when a countersigned contract has been executed. As such, it is important to establish a clear definition and a tracking process for closed deals.

Conversion from opportunity to close-won was measured in a recent Aberdeen survey, conducted in March 2013 with 169 sales professionals. Details on this study can be found in Peter Ostrow's recent report, 
Breaking the Laws of Physics: Shortening the Last Sales Mile through Workflow Automation.

TIP TO REMEMBER:
A closed deal should also capture the disposition; closed-won, closed-lost, or return to nurture.

TIP TO REMEMBER:
A closed deal should also capture the disposition; closed-won, closed-lost, or return to nurture

BEST-IN
-CLASS
45
INDUSTRY
AVERAGE
29
LAGGARD
21

CONVERSION RATE:

Industry average sales teams achieve a 29% conversion from opportunity to close-won, while Best-in-Class leads with 45%, and Laggards come in at 21%.

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