Marketing and sales funnels often leak money. Boston Consulting Group recently released a report that estimates B2B companies waste $2 trillion a year due to poor ad targeting, weak conversion strategies, and other misfires.
Leads are expensive. Depending on your industry, it’s common to spend several hundred dollars for each Marketing Qualified Lead (MQL) — which is generally defined as someone who filled out a form on your website or actively reached out to schedule a call.
Yet according to Salesforce, only 13% of those leads convert into real sales opportunities… and only 6% of those opportunities convert into deals.
1,000 leads x 0.13 (lead to opportunity conversion rate) = 130 opportunities x 0.06 (opportunity win rate) = 8 deals.
That’s a lead-to-close rate of less than 1%.
The best way to improve your ROI and boost growth — even on a lean budget — is to change this math.
Here’s how.
Lead Generation: Reduce Waste and Increase Quality
The first variable is lead generation — especially the cost and quality of leads. The controllable factors are:
- How efficiently your marketing team can target likely buyers
- How qualified those potential buyers are
Controlling Cost
The challenges:
- Only a portion of your potential customers are in-market for a solution at any given time. This pool of buyers typically shrinks during a recession.
- B2B buyers can be difficult to pin down because about 70% of their buying process is done anonymously through online research. With B2B sales processes lasting months, this means buyers are doing extensive research before they actively engage with your brand.
The (flawed) solutions:
- Without a clear picture of which companies are in-market, marketing departments either have to advertise to as many potential buyers as possible (a “spray and pray” approach), or narrow their audience by making educated guesses about the best accounts to target (a “guess and pray” approach).
- “Spray and pray” means you will spend a lot of ad dollars reaching companies that will never buy because they aren’t interested, don’t have available funds, or are already locked into a long-term contract with your competitor.
- “Guess and pray” means you may be targeting the wrong accounts — and failing to target accounts that are ready to buy.
Better solutions:
- An intent data vendor can help you determine which of your ideal customers are ready to purchase.
- By targeting only these in-market prospects, your marketing team can maximize the ROI of ad spends.
Improving Lead Quality
The challenges:
- People hate filling out website forms. Depending on industry, it’s normal for only between 1.5% to 3% of B2B website visitors to fill out a contact form. Ninety-seven percent of the traffic on your site remains anonymous, with users conducting their research without surrendering their info.
- Many form fills don’t even come from potential buyers! One reason only 13% of MQLs turn into sales opportunities is because many of the people filling out webforms are simply looking for basic information that has been placed behind a form.
The (flawed) solutions:
- Marketers often hide valuable information behind webforms as a way to entice (or, if we’re being more skeptical, coerce) visitors into giving up their contact info. Visitors often are looking for key info such as, “What is your product/service? How does it work? How much will it cost? Can it meet my needs?” When you force people to fill out a form before receiving this info, it guarantees that you will receive unqualified leads who are simply looking for basic details. It also ensures that some highly qualified buyers will get frustrated and go elsewhere to search for solutions.
- Sales reps either:
- Are asked to perform brute force outreach in order to find the 13% of leads that are actually worth a conversation. This wastes tremendous amounts of labor, and can also cause sales pipeline breakdowns (discussed below) as sales reps juggle the responsibilities of contacting every single MQL while attempting to maintain detailed and regular communication with their most promising prospects.
- Rely on manual lead scoring that assigns a “heat value” based on a contact’s activities once they have entered the CRM. Unfortunately, lead score formulas are often derived from guesswork and can paint an inaccurate picture of who is ready to buy.
Better solutions:
- You don’t need webforms. Intent data can help you identify all of the potential customers who are in-market to buy. It can also help you recognize level of engagement, and see when multiple members of a buying team are engaging in research — which is a huge signal that a company is heading toward a purchase decision.
- When an ideal customer has multiple buying personas engaged, 6sense will generally flag the account as a 6sense Qualified Lead (6QA). 6QAs convert to opportunities at a 75% higher rate, and into deals at a 40% higher rate, according to a Forrester Research Total Economic Impact (TEI) Study.
Pipeline Win Rates: Reduce Opportunity Loss
Returning to our math — 1,000 leads x 0.13 (lead to opportunity conversion rate) = 130 opportunities x 0.06 (opportunity win rate) = 8 deals — the next variable to consider is your opportunity win rate.
The controllable factors are:
- Lead quality (discussed above)
- Your team’s ability to deliver the right message at the right time to the right candidate
- Your team’s ability to focus efforts on the most likely buyers
Improving Messaging and Timing
The challenges:
- Nearly three-quarters (73%) of B2B buyers want a personalized, B2C-like experience, and have come to expect engagement tailored to their needs, according to a study from Accenture.
- Personalized messaging builds trust, wins customers, and increases loyalty, but it can be difficult to deliver consistently and at scale.
- Since B2B buyers have long buyer journeys, serious buyers are likely to interact with a wide variety of your brand’s marketing assets (ads, emails, website landing pages, and chatbots to name a few). The tools don’t always act in sync, which can lead to inconsistent messaging that undermines the trust your team is working to build.
- Sales marketing and outreach can fall flat when the message doesn’t match the customer’s buying stage.
The (flawed) solution:
- Rigid marketing and sales funnels that make assumptions about what prospects need, rather than using real-time data.
- Manual data consolidation. Since many marketing tools do not automatically communicate with one another, data is siloed. Revenue teams often tackle this problem by downloading, reconciling, and re-uploading spreadsheets to share data between platforms. It’s a tedious and error-prone process. Poor data hygiene alone is estimated to cost companies 12% of their potential revenue.
- Marketing campaigns are often tailored to specific types of accounts, but don’t account for the needs of different buying personas. A CFO has very different needs than a social media marketing manager. If you try to talk to them both the same way, your messages will fall flat.
Better solutions:
- Intent data paired with artificial intelligence can identify the likely buying stage of the accounts researching your brand. This allows you to deliver messaging that is appropriate to their stage in the buyer journey.
- Companies can break down their data silos by using a Customer Data Platform (CDP). A CDP collects data from various tech tools, consolidates it into a unified customer record, and then pushes the data back out to the other tools. This allows every campaign and every tactic to be informed by continuously updated data.
- The CDP can create dynamic audience segments based on observed activity. This allows you to quickly start serving ads that are hyper-targeted based on your prospects’ interests and research.
- Dynamic audience segments can also be used for website personalization, which allows your site to show the most impactful content to each individual visitor.
Keeping Sales Focused on the Biggest Revenue Opportunities
The challenge:
- To get the best results, sales reps should respond to each lead within 5 minutes, treat each lead like a potential deal, and still devote focus and attention to top prospects who are progressing toward a deal.
- The above is virtually impossible, which is why only 27% of sales leads are ever contacted by sales. It’s not that sales reps aren’t trying. It’s simply that when leads don’t respond to initial outreach, it’s easy for them to wind up on a permanent backburner as reps field new leads and try to provide a great experience to likely buyers.
The (flawed) solutions:
- Revenue teams sometimes use junior members of the sales team to do a lot of grunt work, handling the initial outreach and follow up and attempting to qualify prospects before handing the best leads off to senior salespeople. The problem is labor cost. During a strong economy, it can make sense to pay someone to sift. If enough companies are buying, you can afford the inefficiency. But as buying pools shrink during an economic downturn, this approach requires even more sifting — and ROI can quickly break down.
- Sales teams often rely on educated guesses about which opportunities are most likely to sign deals, how much revenue those deals might represent, and which accounts should get their attention first.
Better solutions:
- AI-empowered tools like Saleswhale can use conversational email to respond to leads — including leads that may not have received enough followup. Saleswhale can initiate conversations, book appointments, and pass along qualified prospects to sales reps. This helps catch the 73% of leads that are underworked by the average B2B sales team, surfacing deals that otherwise would have been missed.
- AI trained on B2B deal data can spot patterns prospects share with current and past customers. Those patterns can help you identify accounts that are most likely to buy — and most likely to generate significant revenue. These are the accounts sales reps should prioritize. Forrester Research’s Total Economic Impact (TEI) Study of 6sense found that 6QAs — the leads that 6sense identified as most promising for clients — closed at twice the average deal value compared to clients’ other customers.
It’s Time to Maximize Your Investment
Let’s take one last look at our math. Of course, results will vary. Of course, you should plug in your own assumptions.
But let’s play with these variables. Here, again, are the industry standards according to Salesforce:
1,000 leads x 0.13 (lead to opportunity conversion rate) = 130 opportunities x 0.06 (opportunity win rate) = 8 deals
If you increase the lead to opportunity conversion rate 75%, the opportunity win rate by 40%, and average deal value by double — the numbers provided by Forrester for how 6sense influences customers’ pipeline — here’s the new math:
- 1,000 leads x 0.22 = 220 opportunities
- 220 opportunities x 0.084 = 18.5 deals
- 18.5 deals x double the average deal value = Over 4x revenue, without a single additional lead
This is the power of B2B-focused intent data and artificial intelligence. Your team no longer has to make educated guesses. They can instead rely on data, and can confidently allocate resources — time and money — to drive results.
