Marketing's influence on the sales pipeline is an important metric for businesses to track in order to make data-driven decisions about where to allocate their marketing resources. There are a number of ways to measure marketing's influence on the sales pipeline, including tracking conversion rates, lead generation, and closed deals. With sales funnels that involve multiple milestones, such as the first-touch, lead creation, opportunity created, and closed/won stages, it's important to understand the marketing activity that progressed the prospect to a subsequent stage. By understanding which marketing activities influence different stages of the sales pipeline, businesses can optimize their marketing efforts to maximize the greatest return on investment.
How do you calculate marketing's contribution to the business?
Marketing contribution can be measured by analyzing the number or percentage of new customers that are a direct result of marketing activities. These metrics allow you to measure how effective your marketing efforts are in generating new business. Since marketing activities are not all easily trackable, there's a combination of people, process, and technology that need to come together in order to reliably measure the business contribution.
Effective marketers understand and implement granular measurement for each marketing activity that they employ. With the right measurement for each marketing initiative, it becomes simpler to roll up and understand the effectiveness of the entire marketing function. For digital marketing, this would typically include UTM tracking down to the most granular entity, and then tying the marketing investment to leads, opportunities, deals, and revenue.
With respect to technology, accurate revenue attribution provides an essential foundation. These platforms capture data that allows businesses to see which marketing activities are creating and influencing the sales pipeline as well as generating new business.
What percent of sales should come from marketing?
The sales and marketing teams should share the responsibility of generating a full sales pipeline.
In B2B organizations, there are a few parties that should be held accountable for generating sales pipeline. These include:
- Inside Sales - also referred to as BDR's or SDR's
- Marketing
- Channel Partners
For a new business or new territory in an existing business, inside sales and marketing are expected to contribute the majority of sales pipeline, and channel partners are established as the business develops further.
- Inside Sales: 45-50%
- Marketing: 45-50%
- Channel Partners
In an established business or a sales region in an existing business, go to market functions should contribute the following percentages to sales.
- Inside Sales: 40%
- Marketing: 30%
- Channel Partners: 30%
These are approximate guidelines, and there will be differences based on your company and industry-specifics.
What is marketing sourced pipeline?
Marketing-sourced pipeline is sales pipeline generated by activities originated and driven by the marketing department. The leads generated from these activities are considered to be sourced by the marketing department. Activities that can generate marketing-sourced pipeline include one or a combination of the following activities:
- Email campaigns
- Webinars
- White papers or eBooks
- Search engine optimization (SEO)
- Retargeting ads
- Tradeshows and events
- Content marketing, such as blog articles, video, or infographics
- Social media marketing, such as promoting content on Twitter, LinkedIn, or Facebook
The marketing department's success in driving pipeline is often measured by how many leads they generate. While the marketing department is responsible for generating leads, it is the sales team that must qualify these leads and turn them into opportunities. As the lead progresses into an opportunity and a deal, marketing activities can further influence the progression at each stage. Therefore, it is also important to understand how marketing influences sales pipeline metrics.
To calculate marketing sourced pipeline, a first-touch or first click attribution model can be referenced to understand the number of deals attributed to particular marketing channels and activities.
What is marketing influenced pipeline?
Marketing influenced pipeline is a sales pipeline that is generated by activities that are influenced or impacted by marketing activities. The leads might have originated from activities that were conducted outside of the marketing department. As an example, sales activities such as cold calling might have originally sourced a lead, and a subsequent marketing activity such as a lifecycle e-mail could have helped to progress or influence the sale.
There are a number of benefits in measuring marketing influenced pipeline:
- It helps businesses to identify the marketing contribution at different marketing and sales funnel stages
- It provides data that can be used to make informed decisions about marketing budgets, marketing strategies, and marketing tactics
- It enables businesses to track the ROI of their marketing activities.
- It helps businesses to track marketing metrics related to the progress of leads and opportunities through the sales pipeline.
- It can be used to identify potential bottlenecks in the sales pipeline and to accelerate the average sales cycle
- By understanding how marketing influences sales pipeline progression, businesses can optimize their efforts for maximum ROI. Measuring marketing influenced pipeline provides data that can be used to optimize marketing activities. Additionally, it can help businesses identify potential bottlenecks in the sales pipeline and accelerate the average sales cycle.
How can businesses measure marketing influence on the sales pipeline?
To calculate marketing's influence on the sales pipeline, businesses first need to track the leads that come in from each marketing activity. This requires setting up multi-touch tracking infrastructure, which assigns a unique identifier (UUID) to each visitor. Once multi-touch tracking infrastructure has been setup, businesses need to combine buyer journey data with data from other sources such as marketing automation platforms, CRMs, web tracking, and surveys. Multi-touch attribution platforms can handle this data-intensive endeavor and businesses can make informed decisions about where to allocate their marketing resources to achieve the greatest return on investment (ROI).
When measuring marketing influence, it's important to consider the funnel stage. Here are definitions for marketing influenced opportunities, pipeline, and revenue:
- Marketing-Influenced Opportunities: Count of sales opportunities with any marketing touch after the opportunity creation date
- Marketing-Influenced Pipeline (MIP): Sum of pipeline value for sales opportunities with any marketing touch after the opportunity creation date
- Marketing-Influenced Revenue (MIR): Sum of closed/won deal value for net new customers with any marketing touch after the opportunity creation date
By tracking MIP and MIR, businesses can make data-driven decisions about where to allocate their marketing resources in order to generate the greatest return on investment (ROI). Additionally, you can use this metric to compare the performance of different marketing channels.
Can sales and marketing teams leverage marketing influence to shorten sales cycles?
Yes, by analyzing marketing influence, sales and marketing teams can understand how marketing touches after the opportunity creation date impact the average time to close. This marketing influence analysis should provide an understanding as to which channels result in the shortest sales cycles. Marketing teams can then decide to shift budget and optimize unit costs towards these shorter sales cycle channels.
Can sales and marketing teams leverage marketing influence to impact pipeline velocity?
Pipeline velocity is a metric that measures the rate at which opportunities progress through your sales pipeline. The faster the velocity, the sooner deals close and revenue is generated.
There are a number of factors that affect pipeline velocity, but one of the most important is marketing's influence on the pipeline. By understanding how marketing influences the sales pipeline, businesses can make data-driven decisions about where to allocate their marketing resources in order to generate the greatest return on investment (ROI).
There are two main ways that marketers can influence pipeline velocity:
- By generating qualified leads that sales is able to close, and
- By nurturing leads through the various stages of the buyer's journey
The first and most essential step in improving pipeline velocity is to raise the average percentage of qualified leads.. This can be done through a variety of marketing activities, such as steering budget towards channels with the highest marketing ROI, creative and targeting optimization, website optimization, and content marketing. Once leads are generated, it is important to nurture them through the buyer's journey with targeted content and personalized communications.
By understanding how marketing influences the sales pipeline, businesses can make data-driven decisions about where to allocate their marketing resources in order to generate the greatest return on investment (ROI). Marketing activity after the opportunity creation date can have a significant impact on how quickly a deal makes it through the pipeline. By tracking MIP (Marketing-Influenced Pipeline) and MIR (Marketing-Influenced Revenue), businesses can determine which marketing channels result in the fastest deals through the sales pipeline. Armed with this information, sales and marketing teams can focus their efforts on these higher-velocity channels to get deals closed more quickly.
To leverage marketing influence in order to improve pipeline velocity and go to market strategy, marketers should consider a build vs buy decision to analyze marketing activity beyond first and last touch tracking models. For marketers looking to understand marketing influence and how it can improve sales velocity, revenue attribution platforms that provide this capability are worth considering.
Conclusion
Measuring marketing's influence on the sales pipeline provides an opportunity for businesses and marketing teams to improve marketing ROI, shorten sales cycles, and accelerate pipeline velocity. When done right, measuring marketing's influence on the sales pipeline empowers businesses to strengthen their marketing campaigns and initiatives while also improving the bottom line.