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How to measure lead effectiveness
Some businesses change their tactics with the same amount of science as they used to choose them in the first place - none. Others get themselves into such a state about how to decide whether to change or not, that they analyse themselves to death.
So what makes sense to measure - and why?
The answers lie in the detail - but only a little way in.
Measure interest: What percentage of those who you first invited to act, took the first step?
This first step is a great indicator of whether the topic holds interest for this audience. Be careful though, this first statistic is influenced by many factors: list quality, the tactic you chose (email, phone, letter, etc.), and how you executed.
Measure Marketing-qualified leads (MQLs): What percentage of those who expressed interest appear to be worth passing to Sales?
Regardless of the intermediate steps (click-streams through your web, downloads, seminar attendances, fax-backs, survey responses or whatever), this is a crucial measure of how effectively you selected and executed your marketing tactics on the day.
Measure Sales-qualified leads (SQLs): What percentage of the leads Marketing thought to be good was accepted by Sales?
Loads has been written on the black hole between Marketing and Sales (watch this space, we're big on this one), but this is a great indicator of the degree to which Marketing and Sales are on the same page.
Beware though: a poor score might indicate poorly qualified leads, or a lazy sales force, or both. You will need to dig into why the score is bad, but only do this if the score indicates this is warranted.
Measure first meeting: What percentage of your SQLs resulted in a meeting (or similar concrete Sales action)?
Marketing's objective should be to get Sales in front of the customer. If both Marketing and Sales have qualified well, then odds are that an inability to convert this to a meeting is a sign that the sales force is ineffective, slow or lazy. This sounds harsh, but leads expire quickly and if Sales doesn't get to the first base quickly, then the chance of ever getting a meeting diminishes rapidly.
Measure proposals: What percentage of your first meetings resulted in an offer being made?
Sales needs to make an offer that can be accepted or rejected. If they are unable to extract a clear need they must withdraw, but if meetings are not converting to offers at a high rate, then how can prospects buy?
Measure closed deals: What percentage of your offers were accepted?
This is an indicator both of the effectiveness of Sales, and whether Marketing was fishing in the right pond in the first place.
How to collect these measures depends on your business, your market and the tactics you chose. But here are a few points to note in collecting good data:
Measure Lag as well as Leakage - how long did it take buyers to move from one step to the next (Lag), and how many failed to move within this period (Leakage)?
Remove spikes - adjusting for seasonality is good if you have enough data, and rolling averages help smooth out one-off causes such as bad timing.
Always agree your definition of an MQL with Sales before you start - there are tears in this one...