I recently had a chat with one business owner and founder.
I asked him a simple question: “what is your revenue target for the next three months?” He answered, “I don’t have any goals”.
A big hush fell on me. This is not an uncommon scenario though.
Several entrepreneurs and business owners are often overwhelmed with so many responsibilities that the craft of building their pipeline consistently is almost always an afterthought.
Before I share with you how to consider setting lead generation goals, there’s one thing about sales in general that I want to clarify.
Managing B2B Lead Generation Activity
In sales, there is always a pressure to close more deals. The irony about closing deals is that it is an outcome – a result, that cannot be managed.
I still do not understand why entrepreneurs, sales leaders, and founders continue to coach and often bash their team about business results. It doesn’t make any sense.
In one of his influential article in the Harvard Business Review, Jason Jordan highlights the three most important metrics:
- Business Results: examples are revenue and market share, that represent the culmination of an entire organization’s efforts.
According to Jason, Business Results are not manageable. I cannot ask my sales rep to increase my market share by 15%. Well, I could. But that would be stupid.
Jason put is best:“If sales managers could directly manage revenue, then every sales force in the world would exceed its target.”
- Sales Objectives: these are the specific targets that an organization asks a sales force to reach, like winning certain customers or selling certain products.
For example, let’s get 10 new customers this quarter.Unsurprisingly, achieving this type of goal is not independent of your actions; it requires buyers to participate – to buy. And b2b buyers are constantly getting smarter and adamant.
- Sales Activities: these are the numbers sales managers collect and measure. Examples: number of sales calls, number of emails sent, or percentage of account plans completed.
In Praise of Sales Activity
Turns out that Sales Activities are really the only goals that salespeople, entrepreneurs and business owners alike can execute on, measure and manage.
Think about it. You can make more calls. You can send more emails. Right now. But you cannot get more market share – right now.
So when setting lead generation goals, it is helpful to focus on Sales Activities – the stuff you can execute on today, measure it and ultimately manage.
B2B Lead Generation Goals
To help set realistic b2b lead generation goals, there are 5 important variables to consider.
We typically use an outbound sales process to drive revenue so most of what I will share in this section is related to outbound outreach.
Typically, I like to reverse engineer these variables, working it backward to determine the goals. Use these variables as a framework.
Of course, it will vary based on your company type. But it will help illustrate my point about setting sales activity goals.
The 5 variables are:
|Revenue||What is the $ target for new customers the quarter or year?|
|Conversations||How many qualified conversations are needed?|
|Meetings||How many meetings are needed to have enough qualified conversations?|
|Interested||How many interested people do you need to have from your outreach?|
|Outreach||How many people do you need to reach out to and follow up with (email, calls, social)|
You’ll realize that the only metric you have a reasonable control over is the Outreach. You cannot compel people to be interested.
Of course, based on the results you’ve had with similar personas or customers, you will have a degree of confidence that the people you’re reaching out to will be interested.
But you cannot control timing, their budget, or other account level variable that may influence their interest.
Goals in Action
Assuming you have a revenue target of let’s say $60,000 next quarter. How do you work it backward?
For this example, let’s assume we have a few conversion benchmarks.
Let’s say out of every X amount of people we reach out to 20% of them express interest.
Out of that number, 80% of them move to some form of meetings.
And out of that meeting, 50% are qualified (e.g. have the budget, authority, need and time) and you typically have a 20% close rate on all qualified deals.
Through reverse engineering, I’ll know that to get 3 new customers, I’ll ultimately need to reach out to 100 new potential customers.
Setting goals that can be executed, measured and controlled
So let’s tie it all together. If the average deal size of your service or product of $20,000.
And the goal you have is to generate $60,000 by the end of the quarter, a realistic way to approach it is to work the goal back to the number of potential customers you’ll need to reach out to.
Assuming your conversion are right, you are then able to focus on your outreach, and trust the process to lead you to the goal.
If you don’t have solid conversions, look at your past 12 – 18 months sales processes and determine reasonable benchmarks that make senses for your unique industry. It’s a good starting point.
Let me know what you are using and what is working for you. If you’re using other approaches that are also working for you, feel free to share them in the comment section below.
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