When setting out on a demand generation or content marketing campaign it’s always important to start with one key question in mind – how will this bring us a return on our investment?
Mapping out a path from budget spent to increased revenue will help keep your campaigns on track and keep other stakeholders engaged (including that hungry Sales team of yours). Profit from a demand generation campaign can be hard to measure, but it’s not impossible.
There might be multiple points of contact with a prospect along the way, including quiet periods where it’s hard to track a potential customer’s activity in your marketing software. It’s important to remember that the B2B customer is nearly 60% of the way through the sales process before they’ll actually perform an action on your site. It’s vital to engage the customer during their research phase, and make sure that enough of these top-of-funnel prospects are on your radar.
If you’re setting up a B2B marketing campaign to generate leads you’ll need to know how much you should spend to ensure you generate enough revenue from the campaign. You need to generate enough marketing qualified leads (MQLs) that you can place into the ‘funnel’ towards conversion.
You also need to keep a healthy number of valuable prospects flowing into the pipeline in order to get enough revenue at the end of the sales cycle.
There’s a handy ‘scribbled on a napkin’ way you can sketch out how many leads you need to exceed your revenue goals. All you need is an idea of:
- average percentage of marketing qualified leads that close into deals
- average transaction value
- target revenue figure
Let’s see how this would work in real life…
Data-driven Marketing Role-Play
—- WARNING – Contains Maths —–
For example, imagine you are the demand generation / marketing manager of a B2B tech firm. You target decision makers within mid-market businesses and want to engage them with content discussing the benefits of your cloud software product.
Your sales team’s new business target for this quarter is £200,000
Your average deal value is £10,000
= 20 deals to hit target.
Now have a look at the data and work out the number of deals that have closed from all the leads you’ve passed to sales over the past year. You can use this to get an average conversion percentage.
Let’s say from a first touch with the right contact at a company that fits your criteria, 15% go right the way through to signed contracts. In that case you’ll need roughly 7 times the number of deals you need to close, in new leads.
20 x 7 = 140 leads.
So if 15% of 140 leads convert at our average transaction value you’ll make £210,000 and go just over target. Budget permitting, you should aim to go comfortably over this lead volume to make sure you hit, or smash, your targets. In the above example 200 leads should do nicely.
To learn more about how mapping ROI fits into the demand generation process read our free whitepaper: