Marketing-for-Leads Guide: Step 3 – How much revenue needs to come from marketing’s leads?

Step 3: Determine the percentage of your company’s new business revenue that needs to come from marketing-generated leads.

This step in developing your marketing-for-leads plan focuses on determining how many leads your marketing programs need to generate so that the company can meet its sales revenue goals.

"Why Bother With a Marketing Plan? We’ve Got a Sales Team."

Some people may get involved in an old argument, "Why do we need marketing? We have a robust sales force that is capable of bringing in sales. Why bother with a complicated marketing plan?" The fact is, even with a capable, motivated sales team—which includes a combination of salespeople, distributors, resellers and reps—you are generating less sales revenue than you could be if you relied on the efforts of the marketing team to find new business opportunities. In addition, if you depend only on the sales team, your cost of selling is probably higher than it needs to be.

In any business-to-business sales situation, salespeople typically find, on their own, about 40 percent of the new business opportunities needed to meet their company’s sales revenue goal. They develop sales opportunities through referrals, additional projects from past customers, potential customers they meet at networking events and past customers who have moved to new companies.

All of that works well for generating sales up to a point. Salespeople working on their own don’t generally reach the other 60 percent of sales potential for some very good reasons:

• Salespeople’s quotas and compensation programs reward them for bringing in short-term sales—this week, this month, this quarter. Therefore, they have little incentive to work the longer-term opportunities.
• Most people generally hate the rejection that results from cold calling. Salespeople are no different. They prefer to spend time with prospects that are ready to buy now, even though in reality those buyers represent only a fraction of sales opportunities.
• Salespeople tend to spend most of their time with current customers.

So how can marketing for leads be used to identify the other 60 percent of sales opportunities and make the sales team more efficient overall? Lead-generation tactics such as direct mail, telemarketing and events are ideal for finding qualified sales leads so that salespeople can spend each sales call where it is most likely to generate revenue. Online marketing via websites that cater to your target audience is another cost-effective way to generate leads.

What is the cost of a business-to-business sales call?

The average business-to-business sales call cost $329 in 2001, according to Cahners Research. This figure is based on responses from 23,341 businesses. Additional key findings of Cahners’ study include the following facts:

1. A typical business-to-business sale that exceeds $35,000 takes an average of 5.12 sales calls to close.
2. Less than 20 percent of sales efforts focus on prospective new clients.
3. The average number of sales calls taken by customers over the phone is 4.61 per week.
4. On average, customers have only 1.81 in-person meetings per week with salespeople.
5. Seventy-five percent of the companies studied say that making a sale valued at more than $35,000 requires a combination of direct and indirect sales efforts.

With the cost of a business-to-business sales call rising each year, companies cannot ignore the price tag associated with calling on prospects. By using the most efficient techniques to generate leads and investing in personal sales calls only when they have a greater potential to bring you closer to a closed sale, you automatically lower the cost of sales. The role of marketing for leads is to identify and nurture leads, moving them along to a point where the cost of a personal sales call, or a series of sales calls, becomes an investment in an actual sale.