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Story: Building a Lead Gen Plan Based on Individual Quotas

Never Give UpHow do you know,” I asked the marketing manager, “how much money to spend on marketing, and how many inquiries and leads to produce?”

 “I do what we generally did last year, and create as much demand as I can,” was her reply.

“We have a marketing plan,” she continued with some obvious pride. “And we list what we have to do for the year and stick with it.”

“When do you consult with the sales manager about quotas?” I asked.

"Well, kind of...eh, we don’t really I guess.  We know the forecast she has to hit,” she said with some doubt in her voice.  “Why do you ask?”

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

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

Why it's important?

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

“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 gross 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?” She asked in quick succession. 

“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.


The First Month of a New Year is the most Important month of the year.

IStock-533903997The first month and the first quarter of a new year are the most important month and quarter for any company.   I mention this now because now is the time to guarantee Q1 of 2020. 

Start the year with a below-forecast first sales month and the pressure is dramatically increased for the quarter.  If sales fail in the second month, achieving the Q1 forecast just got darn-near impossible. 

Why it Matters

When sales fail in Q1, the pressure builds for Q2 to make up for it.  If the company is still behind at the end of Q2, thinking you can sell more in Q3 to make it up is a pipedream forecasted by desperate sales managers who are close to losing their year, not to mention their job."

Making the First Month of the Quarter is Possible

Making the first month of the quarter is always, in business-to-business, based on two variables:

  1. The size of sales forecast for M1 (month one) and the total first three months of the year (Q1).
  2. Marketing’s ability to get in front of the problem before the first month and first-quarter start.

If the sales forecast for Q1 is not strong (the forecast has been drained by Q4), Marketing will have to step in and create enough demand to guarantee M1, so that there is enough carry-over in the pipeline for M2, and eventually M3 and the quarter. 

Many companies make the mistake of thinking they have drained sales in Q4 and they start with a devil may care attitude of vacation and sales meetings.    While understandable, this is a mistake.  It's a major screw-up. 

To be successful in M1 and Q1, Marketing has to create sufficient demand in Q4 of the previous year that will spill over in unclosed leads which pumps up M1 and the quarter. 

There Are Usually Two Obstacles to Making This Happen

  1. The C-level is usually chasing year-end profits and will often cut marketing spend just when it’s needed most in the last quarter of the year for the new year.  
  2. After an exhausting year, sales management will allow vacations in M1. Plus, there will be sales meetings, new rep training, open territories from those who were fired for not making quota, corporate meetings, and sales reorganizations.  Just what you don’t need.  Of course, many of these things have to happen, but you cannot allow these “corporate things” to affect the front-line people.  Sales must put as much effort into M1 and Q1 as they did in Q4.

Any sales manager worth the title should be able to see what M1 and Q1 are going to yield from the forecast.   He or she can’t count on magic, discounts or goodwill from the prospects.  The only thing they can count on is the honesty of the sales forecast.  If the sales forecast is weak, Marketing must step into Q4 of the previous year to have a good M1 and Q1:

  1. Marketing-qualified leads (MQLs) must begin to surge in M10 of the year, certainly by M11. When MQLs surge by 20%, some will guarantee the last quarter of the year, while carry-over sales that did not close will jump-start M1.
  2. M1 marketing spending on MQLs must continue and not ease off until everyone is satisfied that the sales forecast is properly supported.
  3. Sales management and sales staff must launch M1 with activity equaling that of M12 in the previous year. All hands on deck, no vacations, no two-week sales meetings, no activity that takes away from guaranteeing the month which will virtually guarantee Q1.

MQLs are needed to be sure that better than 50% of what you create and send to Sales has the admitted intention to buy something in the near term (six months or less).   Personally, I like MQLs to be 50% appointments.  Appointments where the prospect has admitted to a need,  has budget (not everyone will admit it) and has the authority to buy will bring home M1, and consequently Q1. MQLs close faster than unqualified leads.  Appointments close faster than MQLs. 

Once Q1 has been delivered, the carry-over will help forecasts for Q2; and so it rolls for the year as long as there is marketing consistency. 

Start well and end well is my motto, and it should be yours. 

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Top 5 Treatments for Sales Fungus

Women Hand EyeSales Fungus, identified as a disease state in March of 2019[i], affects salespeople and sales managers.  It hampers sales performance (quota failure), leading to job losses and hundreds of millions of dollars in lost sales opportunities.

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When Presidents Set Unrealistic Quotas

IStock-527444717Truth be known, most quotas are set by the company president, CFO or sales manager sitting in a room, deciding on what revenue growth they want and backing into the numbers. 

It seldom has anything to do with what's possible, how marketing can help, a sales or marketing plan or whether they should hire new sales reps to bring in the increased volume.   It's pure wishful thinking based on nothing more than they want it to happen. 

The consequences are devastating.

Continue reading "When Presidents Set Unrealistic Quotas " »


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.”

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


Clint Eastwood said it best in the movie, Sudden Impact, “It’s just a question of results"

IStock-533903997

Why it’s Important

"Sales Performance is tied to sales lead performance, which is tied to your marketing budget. Period." 

James Obermayer

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Clint Eastwood said it best in the movie, Sudden Impact, “It’s just a question of results.  Everyone wants results, but nobody wants to do what it takes to get it done!”  

Continue reading "Clint Eastwood said it best in the movie, Sudden Impact, “It’s just a question of results"" »