End of another quarter and the marketing team has crushed their Marketing Qualified Lead (MQL) target- Boom! They’ve spent all their budget and bought in the MQLs they were tasked with, they are on a high! There’s nothing better than hitting your KPI target, right? Wrong.
The Sales team missed their target (by a lot!) and is furious marketing has the audacity to celebrate when none of their marketing leads led to anything of value. Marketing and sales go their separate ways, until next quarter’s review.
Does this sound familiar?
Marketing has continued to morph into a pivotal role in contributing to revenue like never before. This transformation can be attributed to various factors, including the increase in digital platforms, data analytics, and shifting buyer behaviors. As a result, CEOs and the leadership team now place new and heightened expectations on marketing teams to not only create brand awareness but also to actively drive and measure revenue growth but they are set up to fail before they even start. And no, it’s not them… it’s you.
Marketing is set a target to hit MQLs by the leadership team, and right there lies the problem. MQLs do not drive revenue, they do not close deals and they certainly don’t set up sales for success. If you’ve been measuring your marketing team on MQLs, it's time to stop and read on.
Reimagine your sales and marketing functions. Yes, sure, they have different purposes but they have the same goal, to close business. Start with the number of clients or the $ you want to finish the quarter with, now let’s work backward. What’s the conversion rate from a qualified opportunity to closed won, then what’s the conversion rate to opp, demos held, and demos booked? This will provide you with a framework to base your KPIs for both sales and marketing. Marketing will be tasked to bring x% of the demos/calls you need to be booked to hit your closed won target, and the rest will be for sales to bring in.
This framework should be built out for the next 12 months and broken down per quarter to help teams understand what they are working towards. Once marketing has its demo/call booked target set, it's up to them to work out how they get there.
Now a word of caution here, MQLS aren’t bad. Yes, I know what I said earlier, MQLs don’t equal revenue and I still stand by that they shouldn’t be the goal. However, marketing may decide to put energy and dollars into creating MQLs in order to hit their target of demos booked.
Let me explain… When MQLs are generated with this new goal in mind, marketing needs to then take additional steps by creating nurturing campaigns to develop those leads further and move them to a place where they are ready to book a demo. These extra phases that marketing has to develop, motivate them to generate quality MQLs (in the first place) that are likely to convert to a demo booked. These MQLs probably won’t convert in the same quarter but may convert in the following quarter to help them hit that next quarter’s target. The new way of thinking will push marketing teams to think not just about this quarter but also about the next quarter. And this is when the magic starts to happen.
You are forcing your teams to think past the quarter they are in. They are now going to have to take a step back and start thinking more about their audience, their pain points, and what will motivate the prospects to buy. This is a much more strategic approach than just running ads, posting on social and paying for leads through content syndication. This new approach is inspiring your marketing team to think creatively, rather than just executing and spending money as they always have.
Now that marketing is focused on the same goal as sales, you have a happier sales team, who feel supported by marketing and aligned to bring in demos! Both teams are speaking the same language.
Let's take this new goal, one step further. Soon sales and marketing will realize that if they close larger deals, they will need to close fewer deals, and therefore bring in fewer demos, and this is when you start to see them work together to bring in larger deals. You will also see a shift in their joint weekly calls, where they talk about improving the conversion rates to help convert more demos into won deals. With this new joint purpose, you will see an increase in not only performance but also collaboration on perfecting the demo call and supporting material to move demos taken into the opportunity stage and so on. Do you see the ripple effect you can cause, by just changing the goal? It's amazing to see it in action.
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