"Sales Opportunities" Are an Effective Measure of Marketing Success - and May Help You Ease the Gap Between Sales and Marketing
I have often said that the sales team is the primary customer of the marketing team. The marketing function is primarily focused on creating sales opportunities and improving the probability of sale for the company. This is for good reason. In most companies the pressure for sales results is constant. The entire financial strategy for a company begins and ends with the sales forecast and sales results. That is why so many companies put such a heavy emphasis on leads, using the number of leads as the primary measure for trade show success.
For those reasons, most companies would like to correlate actual sales results with event marketing activity. This is possible for some, but impractical for many. Some companies take orders on the show floor. That situation is easier, the measure of success is the total value of the orders written. For many others, sales occur long after the event is over, and often through one of more layers of channels, making it difficult if not impossible to track. Add to that, a multi-year sales cycle. In the defense industry the sales cycle may be a decade or longer from initial engagement to sale. Also, converting a lead to a sale often requires significant participation by the sales team, presenting the question of how much of the eventual sales value is attributable to having made the initial contact and engagement with a prospect at a trade show?
Of course there is a lot more to be gained at trade events beyond generating leads, however for this discussion we will keep the focus on the link between marketing and sales. At worst this link is perceived as a disconnect. At best, marketing is seen to have a direct influence on the level of sales. For example, a call center might be known as a marketing function, but if they write orders they are a sales function. Therefore, it is worth considering if a trade show effort should be evaluated on the ability to generate bona fide sales opportunities for nurturing and closing by the sales team.
The most basic question that must be answered by the sales team is, "What do we want a qualified visitor to do as a result of engaging with us at an upcoming show?". The answer must be a specific step that is feasible and will involve a targeted individual more deeply in the normal sales cycle and to a point where the certainty of a sale can be estimated. So, it follows that the simplest measure of success might be how many real sales opportunities were generated by activity at this event.
To go a step further, we can place an estimated value upon the sales opportunities generated by gathering some additional input from the sales team. To estimate the value of the sales opportunities (aka leads counts) you will need to know two things:
1) What is the estimated percentage of your committed leads (i.e. people who interact with your staff and make a commitment to a specific follow-up action such as a sales visit) that eventually result in a sale? This may be known internally as the "close ratio" or something similar. Ask sales for this number, and remember it will only apply to real leads that represent a targeted individual who actually takes the next step you specified.
2) What is the average value of a sale that results from a committed lead/visitor from this show? Again, the provider of this information is the sales team. They will also explain how they prefer to view this value. Valuation perspectives might include initial contract value, annual value or a continuous service, lifetime value, etc. Service businesses may use the value of revenue over a period such as a year or more.
In planning for next year’s event cycle, take time to make an appointment with the sales team and jointly define the measures of success for your event marketing program.Effective targeting and attraction are prerequisites to an effective sales activity. These are within the domain of marketing. Engagement is the activity that begins to span the marketing and sales functions. Engagement should result in moving well-targeted individuals directly into an important step in the sales cycle for a company. Prospects reached through marketing activity must commit to a step (action) that the sales people agree is an important step in their process. If this agreement is reached, the proverbial gap between marketing and sales will be erased.
To summarize, here are few suggestions: 1) keep to emphasis on selling. 2) focus your marketing activity on two things a)defining and finding targets and b)engaging and interacting with them in a fashion that results in participation in a specific action that your sales team has defined as the next step. Then, count your success by the number of sales opportunities generated and assess the value of your investment using the estimated value of those opportunities.