| Jan 27, 2022

Closing the Gap Between Creating Leads and Generating Revenue

Reconciling lead source generation with revenue generation starts here.
By Tom Martin |

<1 minutes

What do you do when Marketing hits their lead goals, but Sales misses their revenue benchmarks? Who’s at fault? The answer isn’t as simple as blaming one department or the other, nor is the problem uncommon. In fact, according to one recent report, 79% of marketing leads never convert to sales — a statistic that may come as a shock to some but will be unsurprising to most.

Marketing executives are responsible for the money they’re spending, not only delivering leads but ultimately delivering revenue by aligning sales and marketing. It’s essential to assess why marketing leads aren’t converting to sales. However, by deferring to junior metrics like lead volume, teams from even the strongest companies risk falling into some of the most common pitfalls in cultivating growth.

Identifying the Problem — When Leads Don’t Match Revenue

Picture a marketing team that has no trouble generating leads. As the end of a quarter approaches, the marketing team might spend money on a program that generates 50,000 leads to meet their quarterly lead generation goal. Meanwhile, none of these leads close deals when they reach Sales.

It’s a classic case where Marketing meets the mark on leads, but Sales misses the mark on revenue. While Marketing is green, the company is red, having seen no return on the marketing team’s efforts. Nobody can definitively state where things went wrong, and as finger-pointing ensues, so does the classic animosity between Marketing and Sales.

Tracking marketing expenses and leads is important, but when Marketing is measured on lead volume alone, there’s a disconnect in seeing what generates revenue. When companies start creating pathways for the marketing team to follow their work through the funnel, identifying whether leads actually generate revenue starts to become a multi-department issue. The marketing team can then adjust their spend and invest in the avenues that set the sales team up for success.

Measuring Attribution from Start to Finish

Effectively aligning departments on the marketing spend that cultivates real deals is critical to creating the pathways for effective sales funnels. However, companies don’t often have a long enough horizon on their marketing spend to track their leads and measure their return. In the timeline of a deal, the marketing spend regularly generates a lead that doesn’t close for months or quarters in the future.

Effectively tracking return on investment through the gap — and doing research to understand how to close it — comes down to having a longer horizon. To effectively start measuring attribution (where a closed-won deal actually came from), companies can begin by identifying the cycle time of a deal and understand where and how to factor in marketing spend.

Without measuring attribution, it’s challenging to work toward concrete solutions for closing deals. Without a long-term horizon, it’s difficult to identify the problems that need solving in the first place. Data is essential to restrategize effectively, but there’s no room for change without investing the time to collect it properly.


Unified Metrics — Measuring Marketing and Sales Together

It’s normal for Marketing to measure themselves on leads and cost per lead, and it’s normal for Sales to measure themselves on pipeline conversion and revenue generated. However, relying on metrics like these, in each separate department, won’t help assess how to generate consistent growth over the long term. Creating the infrastructure to reconcile lead source generation with revenue generation comes down to unified metrics between sales and marketing.

Revenue generation and return on investment are the senior metrics that guide effective sales and marketing strategy. Shifting toward these senior metrics for both teams helps determine every lead’s actual value, whether in Marketing or Sales. Focusing your strategy on sharing senior metrics creates a foundation for critical communications and collaboration between departments.

Utilizing these methods to align departments won’t deliver instant results — again, leads generated in Marketing might not close in Sales for multiple quarters. However, they empower companies to implement research-informed strategies that will start boosting sales and strengthen the dynamic between Marketing and Sales.

Making Space and Closing Deals

Missing revenue targets is just one sign of a more significant problem that can best be solved by identifying and treating the cause rather than its symptoms. Focusing on lead volume over revenue generation is a misstep many companies make, and every business will be presented with its own unique set of challenges in this arena.

It’s hard to say who plays what part in closing deals without creating space for effectively measuring attribution through the sales pipeline. While there is no one-size-fits-all solution applicable to everyone, looking at the right information in the right way is a great place to start.

Tom Martin
Executive Author

CRO, Conductor

Tom Martin is the Chief Revenue Officer at Conductor. He works in collaboration with the entire executive team to drive and deliver the revenue results for the company. view profile


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