In a recent article for BtoB Magazine, John Neeson of marketing and sales consultancy Sirius Decisions provides some planning benchmarks that are often sought by clients but tough to come by, namely:
what percentage of revenue should be directly attributable to marketing?
and
what should my close ratio (qualified leads to closed deals) be?
We often get asked the second question by start-up clients who don’t yet have the track record or sample size to establish a firm metric, or by clients whose long sales cycles prevent them from realizing short-term ROI on marketing programs and thus need to plug a reasonable assumption into their planning and budgeting calculations.
The true data? Neeson says that for typical $1 Billion+ software companies, the average number of deals in the pipeline directly attributable to marketing-related efforts is 18%. In my experience, when you ask most marketing managers what’s expected of them, the answer is typically closer to 50%.
As to close ratios, Neeson says that the average is 30.74% for companies of revenues greater than $1 Billion, and 26.90% for all companies. More importantly, he says, “Where marketing can increase sales, however, is by increasing the number of qualified leads in the sales pipeline.” In other words, make marketing accountable for leads, not sales.
Speaking of benchmarks, MarketingSherpa just published their latest “Business Technology Marketing Benchmark Guide.” At $297 and a whopping 287 pages, it’s not a light read, but as someone who devoured it (highlighter in hand) on a recent two hour flight, there’s plenty here to make it extremely worthwhile for the marketing manager looking for ways to measure his/her programs and strategies against industry standards.
Some of the more interesting statistics gleaned from surveys of more than 1,000 BtoB marketers and 4,000 business technology buyers:
* Large companies spend an average 3.8% of revenue on marketing, whilst medium and small organizations spend 7.1% and 10.7% respectively (does your budget meet the grade?)
* 78% of technology buyers have listened to technology-related podcasts more than once (compared to only 12% of online consumers who have ever downloaded a podcast, i.e. don’t be so quick to dismiss podcasts as a viable content vehicle for B2B)
* 80% of technology decision-makers said their organization searched for and found technology solutions when making a purchase, not the other way around (yet another argument for an integrated push/pull marketing strategy)
* 44% of business professionals use their personal email address when registering business content (underlining why it’s important not to immediately dismiss those “hotmail” and “gmail” leads)
And more besides. You can download a free executive summary of the report here. To buy the complete report, click on the “Sherpa Store” link located at the bottom of each page.