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Is this a Fairy Tale? A Marketing Manager Builds Demand Gen Based on Sales Quotas?

IStock-802452108 (1)“Do you know,” I asked the marketing manager, “how much money to spend on demand generation, and how many leads to create?”

With a shrug she said, “I do what we did last year.  We have a marketing plan,” she continued. “We review last year's spend and and make adjustments, usually on a budget the CFO gives us.”

“Do you consult with sales management about quotas?” I asked.

“Well kind of, because we know the sales he has to hit,” she said with hesitation and doubt in her voice.  “Why?”

“If you know the sales forecast for the year, you also have access to quarterly and monthly forecasts, as well as the salespeople’s individual forecasts.  With this information, you’ll know how many inquiries and leads you have to create per salesperson based on the average closing rate per product.”

"Oh," she said. 

Why it’s important?

“So what you’re implying is that I should create the number of leads each rep will need to make quota based on their closing ratio?”

Sales Lead Management Association

“Yes, but you needn’t go all the way to the rep level on their closing ratio,” I said.  “You can take the average closing rate of the company as a start.  If the company closes 25% of the leads you give them, you’ll have to give them 3-4 times the number of leads as a minimum to make quota.  Doing it by rep is possible but that is the next step when you’ve mastered the first step.” 

“But,” she stammered with obvious frustration.  “I don’t control follow-up; these guys don’t follow-up what I give them anyway.”

“So, do you give up,” I asked?  “The initial follow-up can be done with your marketing automation system.  Then you have to convince the salespeople by reporting from the CRM system that it is in their best interest to follow up every lead.”  

“But…but, the sales manager isn’t any better than the reps,” she sputtered with a biting, angry tone to her voice.

“You’re justified in being upset,” I said. “But you can’t give up.  Meet with the sales manager and explain that you’ll be creating demand based on his forecasted sales and the closing rate of the sales leads.  100% follow-up is in his and their best interest.  As they get better at follow-up, you’ll get better in generating superior-quality sales leads.”

“Do they respond?  Will they do it? Does this work?  How long does it take?”

“For many sales managers this is a new concept. What do you have to lose?” I asked.  “Your salespeople aren’t making quota now.  Give them more qualified leads and increase follow-up and sales will increase.  It won’t take longer than a quarter or two for them to understand the connection.”

And she did.  Shifting to a marketing plan projection of sales inquiries based on average closing ratios gave her a number to shoot for in the plan.  Follow-up started with the marketing automation system and finished with a campaign of follow-up improvement by salespeople.

It worked.    Always does.

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