This post is for business owners, marketing directors/managers and sales directors/managers.
As a small business owner, you probably have marketing and sales teams? Or maybe you only have one or two sales/marketing employees?
Whatever the number of employees, whether you want to grow or stay the same size, it’s essential for everyone to be clear on a common company goal.
And to achieve your business goals, the most effective approach is to get everyone in sales and marketing to come behind a single revenue goal that is shared between everyone.
One problem here is that sales and marketing employees have a history of competing against each other, so achieving a common goal isn’t that simple.
So how do you create a revenue goal that everyone can follow?
Avoid putting a wall between sales and marketing
In companies across the world, there can be a lot of competition and distrust between sales and marketing, even in a small business.
Maybe it’s not obvious, but beneath the surface it can lurk.
It used to be common to see the sales employees on one side of the office wanting all the credit for the sales, and for the small business owner/Directors to focus revenue goals towards the sales team, and not marketing.
In many UK small businesses, this is still the case.
But there is a powerful alternative.
“The line between sales and marketing has been obliterated.” – Matthew Cook, CEO, Saleshub
If you can get everyone in sales and marketing to pull behind a single revenue goal – it will significantly help to reduce friction and drive revenue – if you do it right.
What is single shared revenue goal? And what are the benefits?
A single shared revenue goal is simply a revenue goal that all members of your team are working towards.
This could be anything from increasing sales by 10%, to hitting a certain number of new customers per month.
Having a single shared goal helps to ensure that everyone is on the same page and working towards the same thing.
One of the biggest benefits of having a single shared goal is that it improves communication within your team. When everyone is working towards the same thing, they are more likely to communicate with each other and share information that could be helpful in achieving the goal. This improved communication leads to a more efficient and effective team overall.
Another benefit of having a single shared goal is that it increases motivation among team members. Everyone knows what they need to do and why it’s important, so they are more likely to be motivated to put in the extra effort to achieve the goal. This increased motivation can lead to better results for your business.
Greater sense of ownership
Finally, having a single shared goal gives team members a greater sense of ownership over their work. They feel like they are part of something bigger and that their work is important in achieving the company’s goals. This sense of ownership can lead to higher levels of engagement and satisfaction among employees
As you can see, there are many benefits to having a single shared revenue goal. If you’re looking for ways to improve communication, motivation, and engagement within your team, implementing a single shared goal is a great place to start.
1. Bring Sales and Marketing Together Behind A Clear Shared Revenue Goal
Whether you’ve got one salesperson or a large sales team; one marketing specialist, or a large marketing team; how can you create a revenue goal that sales and marketing truly work together to reach?
How Do You Calculate Your Single Revenue Goal?
If you’re only just starting out with this and don’t have the figures to hand, try to move forward with your best guesses.
Don’t get bogged down. It’s more important that you move forward with your single revenue goal than getting stuck with perfection.
Then refine it as soon as you can.
The three figures to create your company-wide single revenue goal are:
- The average conversion rate from lead to ‘deal/opportunity’.
- The average conversion rate from ‘deal/opportunity’ to ‘closed/won sale’.
- The ‘average value of a sale’.
Knowing those three figures allows you to calculate how many Marketing Qualified Leads marketing needs to send to sales for them to hit the company-wide revenue goal.
Before I make that clearer, you first need to understand what a Marketing Qualified Lead (MQL) and what a Sales Qualified Lead (SQL) is.
Understanding MQLs and SQLs is important for your sales team because the system can save your salespeople time so they spend more of their time selling to the right people at the right time. At its best, the process of lead scoring and converting MQLs to SQLs gives your sales team more qualified prospects so they’ll have more meaningful conversations.(Hubspot)
Additionally, tracking ‘Marketing Qualified Leads’ and ‘Sales Qualified Leads’ gives your sales and marketing team insight into what’s working:
- what brings leads in?
- how likely are they to convert?
- how often is your sales team closing SQLs?
- Is your sales team having more meaningful conversations?
Sales Qualified Lead vs Marketing Qualified Lead
While a sales qualified lead has been researched and vetted by your marketing team and is ready to talk to your sales team, a marketing qualified lead is a lead who has engaged with your business and could become a customer if nurtured correctly. An MQL becomes an SQL once they’re ready to talk to the sales team. (Hubspot)
What’s a Marketing Qualified Lead!?!
An MQL is a lead that’s more likely to convert into a sale because of the activities that have preceded the sale.
These are activities such as: which web pages a person has visited, what they’ve downloaded, and similar engagement with the business’s content.
If your marketing sends only MQLs to sales then your salespeople’s time will be better spent selling to the higher quality leads, rather than talking to poor quality prospects.
Marketing Qualified Leads will make the selling easier, as opposed to sending all leads to sales.
How does a Marketing Qualified Lead move to become a Sales Qualified Lead?
You’re looking for the MQL to become engaged before they become an SQL.
This could come in the form of engagement on your site. Let’s say a lead is engaging on your website, opening your emails, or downloading your lead magnets. That means that they’re interested in what you have to say.
It comes down to how much they engage with you and the type of engagement.
How do you use ‘Qualified Leads’ in your small business?
Using ‘Qualified Leads’ in your marketing and sales is easier if you have the right customer relationship management software (CRM) to manage your leads and sales.
For smaller businesses, CRMs like Pipedrive and the UK’s Capsule CRM have proven very popular, but over the last 10 years Hubspot CRM has really taken off with ambitious small business owners who want to take their sales and marketing to the next level.
Granted, some of the features will cost you a bit per month, but if your business is setup well, and you have leads cominng in, then it’s an investment that could give you big returns.
BUT you have to use Hubspot properly.
Hubspot suggests you give each potential buyer the following lifecycle stages depending on where they are in the buyer’s journey.
What are your lifecycle stages?
The default Lifecycle Stage property in Hubspot (which you can assign to a contact) contains the following stages as options, and their definitions:
- Subscriber: a contact who has opted in to hear more from you by signing up for your blog or newsletter.
- Lead: a contact who has converted on your website or through some other interaction with your organization beyond a subscription sign up.
- Marketing Qualified Lead: a contact that your marketing team has qualified as ready for the sales team.
- Sales Qualified Lead: a contact that your sales team has qualified as a potential customer.
- Opportunity: a contact who is associated with a deal (e.g., they’re involved in a potential deal with your organization).
- Customer: a contact with at least one closed deal.
- Evangelist: a customer who has advocated for your organization.
- Other: a wildcard stage that can be used when a contact does not fit any of the above stages.
When you view a person/contact in Hubspot, it allows you to change their lifecycle stage, as you can see below:
You could change the lifecycle stage manually in Hubspot by finding the above dropdown in the contact’s profile. Or, with some more advanced versions of Hubspot, if a website visitor for example, downloads your buyer’s guide using a Hubspot form, you can set it up to change the lifecycle stage automatically.
You may be able to achieve similar things on other CRMs, but Hubspot really takes your power to another level, and in some cases makes it easier with its automation.
How do you get the values to calculate your revenue goal?
Hubspot allows you to run simple reports to see how many leads are moving from being a Marketing Qualified Lead to a Sales Qualified Lead, as you can see below.
This report is called “Contact Lifecycle Stage Funnel”.
Remember the three figures to create your company-wide single revenue goal:
- The average conversion rate from lead to ‘deal/opportunity’.
- The average conversion rate from ‘deal/opportunity’ to ‘closed/won sale’.
- The ‘average value of a sale’.
You can use the data in the report below to get:
- average conversion rate from lead to ‘deal/opportunity’
- average conversion rate from ‘deal/opportunity’ to ‘closed/won sale’ (customer).
LEAD SCORING: Who’s just browsing and who’s actually interested?
The process of moving a potential buyer from an MQL to an SQL can vary depending on the company, but often begins with a process called lead scoring.
Lead scoring is the process of assigning values, often in the form of numerical “points,” to each lead you generate for the business.
Lead scoring is a way to save salespeople time so they spend more time talking to leads that actually want to talk to them and are interested in your product or service.
You can score your leads based on multiple attributes, including the professional information they’ve submitted to you and how they’ve engaged with your website and brand across the internet.
This process helps sales and marketing teams prioritise leads, respond to them appropriately, and increase the rate at which those leads become customers.
The more your marketing is integrated with Hubspot’s software, the easier it is to score your leads.
When most people start implementing inbound marketing, they’re primarily worried about getting enough new leads in the funnel.
But once you have a lot of leads, you need to figure out who’s really interested in your product and who’s just starting to look around.
That’s where lead scoring comes in.
And lead scoring can be automated and refine with machine learning. So it doesn’t have to be scarey! But you do need a system like Hubspot.
How do you score leads?
If you’re a small business, you as the business owner and maybe fellow directors will determine which actions qualify a prospect as ready to move on to the sales process.
You’ll determine what the ideal lead looks like and decide how much weight a particular action carries.
One of the most common ways to create points to score leads is using data from past leads to determine what is worth more points.
- How? First, you’ll take a look at your contacts who became customers to see what they have in common.
- Next, you’ll look at the attributes of your contacts who didn’t become customers.
- Once you’ve looked at the historical data from both sides, you can decide which attributes should be weighted heavily based on how likely they are to indicate someone’s a good fit for your product/service.
For example, these actions could be booking a meeting, taking part in a demo, or responding to an email. Then, you could assign higher point values to booking a meeting rather than responding to an email.
So, what type of behavior can move a prospect along? It could come in the form of engagement on your site. Let’s say a lead is engaging on your website, opening your emails, or downloading your lead magnets. That means that they’re interested in what you have to say.
Depending on how much they engage with you and the type of engagement, they might be ready to move from MQL to SQL. An MQL becomes an SQL once they’re ready to talk to the sales team.
For lead scoring you’re likely to need the more advanced (and more expesnive version) of Hubspot. But remember, if you do it right and you’ve already got a good number of leads coming in, it could be a great investment.
Is It Enough To Just Send ‘Marketing Qualified Leads’?
I talked earlier about having a clear goal in your agreement of a specific number of marketing qualified leads sent to sales from marketing per month.
But be careful. That approach can have big dangers.
- Let’s say that marketing simply have to provide 100x MQLs a month to the sales team.
- When marketing meets that goal, they’re ecstatic.
- But sales are less than happy.
- A chunk of those leads could easily be nowhere near good enough for sales – even if they’re marketing qualified.
Marketing have been more focused on the number of leads rather than the quality. They may be happy with 100 people who downloaded an ebook, but the sales team would not be happy with that.
Without that goal focus on lead quality, sales will still get a large number of poor quality leads.
How To Create a Company-Wide Revenue Goal That Focuses On LEAD QUALITY
The best way to set goals for marketing is to provide a goal like: “Send £xxxx worth of leads per month to Sales”.
And you do that by knowing what different types of leads are worth.
For example, let’s say you know that 1% of the time that someone downloads an ebook on your website, they eventually convert to a customer and spend on average £1000.
So the eBook lead is worth £10 (1% of £1000).
We know that no two leads are the same. So in this example let’s see what other types of leads are worth.
Let’s say that you know the sales conversion rate of someone who attends a demo or showroom is 10% (for the sake of this example) and on average they spend £1000. So the showroom lead is worth £100.
You can now give marketing an extremely useful and accurate goal.
You know how much revenue you need in a month to meet your company’s goals and you figure out how many leads a month you need to hit that goal.
Instead of asking marketing to generate 800 leads per month, you tell marketing your target is £10,000 of lead value per month. That can be made up of 1000 eBook leads (£10,000 worth of leads), or 100x showroom appointments (£10,000 worth of leads). Or a mix of both.
You get the result that everyone wants:
Marketing get the credit they deserve for getting that higher value lead, or a lower value lead. Versus the previous situation where they may have met their goal when they got 800 ebook leads, but your sales team were given poor leads.
“Having a unified goal is great, but you need a system of accountability to make sure marketing and sales are both pulling their weight.” – Hubspot
What Would The Agreement Look Like?
To hold sales and marketing accountable you need them to sign up to a service-level agreement (SLA).
As a small business, that might sound overly complex, but it’s every simple.
It’s widely agreed that you need three figures to create your SLA.
The agreement between sales and marketing might read something like:
Every month the marketing team will deliver £10,000 in lead value to sales, and the sales team will contact every marketing qualified lead within 24 hours of receiving it.
Setting goals like this for marketing could provide a significant revenue increase for your business.
For the first time, your marketing will be on a revenue target, just like sales.
This is significant for accountability and for achieving your company-wide goals.
- How to make the selling easier and boost revenue with Sales Enablement
- How to increase website lead response times
Don’t Let Perfection Hold You Back
Some of the figures and maths we’ve used might seem complex (please ask if you need help with this), but don’t chase for perfection now. That can come later when you have more data in your hands.
For now, have the conversations you need with sales and marketing to get to the next step.
Whether you have one marketing specialist or a team; one salesperson or a sales team, once you have a hang of it sales will enjoy a steadier stream of higher quality leads, and marketing will have more flexibility about the types of leads they provide.
Once you have the goal in place, marketing and sales working towards the same company-wide goals will significantly increase your chances of hitting your revenue goals.
It won’t be plain sailing, but you need to do the difficult things to make the selling easier.
Stop treating marketing and sales as different groups in your business. The traditional boundaries between marketing and sales have been obliterated. Now is the time to get everyone working together towards a company-wide shared revenue goal to boost sales and revenue.
Make the selling easier in your company and start the conversation.
Create a Sales Enablement Strategy.
If you need help please get in touch via email or give me a call on 01926 356300
I’ll be happy to answer your Sales Enablement questions as well as help you with your website and digital marketing.
Extensive research and material from Hubspot CRM was used for the writing of this article.
My name’s Mark Reynolds, the owner at ProfitReach, I hope you enjoyed my article. I’ve been helping small business owners get more customers since 2002. Every month I work with ambitious individual UK entrepreneurs/small business owners like you to help generate a more consistent and predictable flow of customers. Find out how here.