How can knowing your Lead Funnel Maturity help your company to grow?

New business leads flowing into a B2B company can be conceptualized as a lead funnel, with a greater number of leads entering the top of the funnel, getting sifted through the sales process, and a smaller number of closed deals coming out of the bottom of the funnel. 

Optimizing the marketing funnel is key to the success of any web-based or lead-based company.  The challenge with optimizing your funnel is that there are several metrics you can focus on, and experts or in-house stakeholders will tell you that one metric or another is key.  How do you know where to start optimizing your funnel and help your company grow? 

Fortunately, there are some trends at three key stages in a typical B2B lead funnel’s maturity that will point to the answer for your company. 

Introducing Lead Funnel Maturity

I’d like to introduce a concept here: Lead Funnel Maturity.   (See graphic; available separately as PDF)

Lead Funnel Maturity: Typical key metrics by maturity stage.

For B2B companies, it’s really important to know what maturity stage your funnel is in currently, to help isolate your key metrics.

Here’s a video talking about early and mid-stage lead funnels…

1. Early-stage Lead Funnel:  Quantity

In an early-stage lead funnel, your company is trying to get good at getting leads into the business. It’s all about quantity. You are experimenting with new marketing channels (SEM, email, events, content marketing, etc.), defining your lead measurement and testing your budgets. Marketing automation software can help streamline efforts at this stage.

The metrics you should be optimizing for at this stage are:

• # Leads

• Cost per lead (CPL)
  

2. Mid-stage Lead Funnel:  Quality

If your business is good at generating a significant quantity of leads for your sales team, but struggles at measuring the progress between getting the lead and closing a sale, you’re probably at mid-stage maturity. During this stage, you’ll probably use your customer relationship management (CRM) software system to capture the points at which leads are accepted (“qualified”) into the sales process, converted to sales opportunities, and hopefully won as sales for your company. This stage is all about quality.

The metrics you should be optimizing for at this stage include:

• # and % Marketing qualified leads (MQL)

• # and % Sales qualified leads (SQL)

• Opportunities (OPTYs)

• Cost per OPTY

• # Won deals and Revenue
  

3. Late-stage Lead Funnel:  Efficiency

If your business can generate sufficient numbers of leads, can measure the progress of leads through your entire funnel, is closing deals via your lead funnel, and has a sufficient number of opportunities for meaningful analysis, then you have reached the efficiency stage. You can begin to optimize your lead funnel for projectable revenue contribution to the business. 

Metrics you can optimize at this stage include:

• Win %

• Average $/deal

• Average Sales cycle time in Days

• Return on investment (ROI)

Note that lead funnel maturity is not a judgmental term:  early maturity lead funnels are not “bad” and late maturity lead funnels are not “superior,” but they are different, primarily in the key metrics that should be used to improve the effectiveness of the funnel at each stage.

So What Should You Do?

Given this framework, how can you begin to improve the effectiveness of your company’s lead funnel? 

First, get the data your company has about its lead generation efforts, and decide, realistically, what stage your company is at. Then, choose a metric that shows the greatest potential to improve the through-put of your lead funnel at your stage. Set goals for improvement, execute and measure. Get outside help if you need to.