What percentage of net new opportunities should come from marketing activities? And how much should come from sales?
When setting targets for a marketing team, a common question is “How much of our new business should be generated by marketing vs. sales?”. What will surprise some people is that it's not uncommon to only get <10% of new business leads to come from marketing in large, established companies as they service enterprise clients. On the other end of the spectrum close to 50% of new business will have to come from marketing in uncharted segments, by young companies in new product categories.
Here are a few thoughts on the topic.
As often is the case, the answer depends on many factors, like:
- Are you selling to business audiences (B2B), consumers (B2C) or variations like the Public Sector? - I’m limiting my thoughts here to B2B focused go-to-market situations.
- How complex is your client buying behavior? (i.e. how do they buy? How big are the buying teams? How complex are their needs?) - For simplicity sake, I only take into account the size of the customers serviced.
- How mature is the market you are selling to? As a “category” of a product/solution gets created, a market “gets made”. This has major impact on how you think about your sales and marketing approach. It’s very different to sell to early adopters vs. late majority. More on this topic here. - I’ve ignored this variable for the answer in this article.
Where do opportunities come from?
What? The sales team should for example:
- Always be networking - Supported by tools like LinkedIn or more advanced prospecting tools (https://www.outreach.io/, https://www.ringlead.com/, Seamless.ai,https://salesloft.com/ )
- Asking their clients and contacts for Referrals.
- Follow up with previous Customer Relations who often moving to new companies in bigger roles
Account Representatives, Account Executives, Senior Salespeople and similar roles who manage opportunities to closure, should always generate part of their opportunity pipeline themselves. This is not just gravy, it’s to be expected. Salespeople should ask their past customers for introductions and referrals, and should constantly grow and work their network to drum up business.
The new “term” in B2B Marketing is ABM (Account Based Marketing) and includes a focused effort to target specific “dream accounts” (fitting your ICP or Ideal Customer Profile) and find the right people to connect with, build a high value relation through relevant content and nurture them to a hot lead. ABM Includes things like:
- High Quality List building
- Digital- and Human Outreach with Phone/nurture follow-up
- Relevant, engaging content
- Discover Pain and communicate Gain, to drive Suspects to Opportunities.
ABM is usually a combination of outbound Marketing execution, and outreach by so called “BDRs” (Business Development Representatives) who are trained to “knock on doors” and discover pain points and drive the development of the suspects into prospects (or get them to refer them to the right companies and people).
Drive “hand raisers” to fill out a form, or request a demo by optimizing multiple demand generation levers like Organic Search (Content), Paid Search, Social Presence and Ads, Lead Aggregators (Captera, G2 Crowd etc) and Events follow up etc.
Marketing supported by Sales Development Representatives who follow up on inbound requests and secure meetings with the sales team.
The following table shows my experience with lead distribution based on the above assumptions. This is based on a sample set of about 20 B2B SaaS Companies who sold into any of these segments. It’s not a statistically sound piece of research, but should provide some guidance.
The below distribution defines customer segments following Gartner's model:
- Enterprise: >$1B Revenue, 1000+ Employees
- Mid Size Companies: $50M to $1B Revenue, 100-999 Employees
- SMB: <$50M Revenue, <100 Employees