If there is one thing that is common to marketing managers everywhere, it’s having to continually justify your spending to the executive team. The benefits of marketing are notoriously hard to measure. The good news is that lead scoring is one of the easiest marketing programs to justify!
Lead scoring presents you with two key measurement opportunities:
- Greater Sales Efficiency
- Higher Conversion to Opportunity
Greater Sales Efficiency
This quantitative metric will be best measured over time, but a little qualitative research within the first 30 days of launch will let you know if you’re on the right track. Interview the top salespeople who are using the lead scoring system regularly, and get their candid feedback as to whether they’re finding A and B leads more responsive to their contact attempts. The answer should be yes! If it’s not yes, your demand gen team may need to adjust the scoring model.
To measure sales efficiency quantitatively, track the time from when a lead record is first accepted by Sales (meaning it’s being worked) to the time when an opportunity is created in the CRM. Plot this measurement for some time period prior to the launch of lead scoring so that you have a baseline for comparison. As more and more salespeople adopt the system, you should be seeing a progressive improvement (shortening) of the timeframe from acceptance to opportunity creation.
Higher Conversion to Opportunity
To see if you’re increasing conversions per sales rep, you have to be looking at the number of opportunities that a rep typically creates in a given period of time. (Again, you need to track this data for benchmarks prior to the lead scoring system deployment.) It would seem obvious that if, in a given month, your top rep normally created 15 opportunities, and since lead scoring it’s 25, you are seeing improvement. But it’s not quite that simple; here’s why.
The 80-20 Rule
First, most sales organizations have a few individuals who skew the numbers. The 80-20 rule typically applies: 80% of the opportunities are created by 20% of the sales team. You may find that a particular number of reps generate a lot of the opportunities. So initially, I recommend that you take an average of total opportunities created by the aggregated sales team per month. This approach will give you a general perspective of how your new model is working. But when you’ve got at least a quarter’s worth of behavioral data, you should delve down and look at the numbers for each rep.
Most likely lead scoring will not be immediately and fully adopted by every one of your sales reps; in other words, some of the folks will completely ignore you and your radical newfangled ideas. You can have the world’s best lead scoring system, but without adoption and utilization, you won’t see the benefits in sales efficiency.
Expect to see remarkable improvements in efficiency by a small number of reps who are embracing it, and no change in the efficiency of others who may not be fully convinced of its value. (Showing this data as a graph to the team may spur some enthusiasm! And healthy competition.)
Sometimes Less Is More
Maybe your numbers look quite different. Instead of 15 opportunities, suddenly your top rep is only averaging 9 per month. If you see a drop in the number of opportunities created, don’t freak out and rush down to unplug the system! You’ve probably uncovered a dirty little secret: your opportunity creation process was bad, and allowed many opportunities to be created which shouldn’t have been. A drop in absolute numbers of opportunities isn’t a matter for concern; the endgame is whether Sales is converting more opportunities to won business.
Don’t be surprised to find that the number of created opportunities goes down, but the number converted to wins goes up. Measure on percentage of closed/won business to the opportunities created. If that top rep is now closing 75% rather than 50%, that’s the kind of statistic that really matters. That’s a sign that your folks are spending their time on the right stuff: working fewer opportunities, but doing a better job on the ones they work. And that’s a good definition of “sales efficiency.”
Can’t We All Just Get Along?
Don’t forget, when you’re looking at ROI, to consider the intangible benefits of building and using lead scoring. A less quantitative way to measure its impact on your organization is to look at how it has enhanced and strengthened the relationship between Sales and Marketing. Most of our clients have found that their conversations are more positive and constructive, with less accusation and assigning of blame. We typically see a much greater emphasis on team orientation that extends far beyond the lead scoring project itself, pervading every aspect of the relationship. To my mind, that’s almost the best part of the whole thing.
Next week, we’re moving on to another topic: lead nurturing is our theme for December!