Demand Generation

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Funnel Definitions

(Note: On this page, the term “lead” refers to the abstract concept of a lead unless explicitly stated as the concrete “lead object” in CRM.)

  • Lead: A lead is an individual with limited or unknown intent to purchase. Here, leads can be of the following priority levels:
    • High-Priority Lead: This is a person who has expressed direct intent to speak with a sales person either by requesting a demo, pricing, or to speak with sales.
    • Standard-Priority Lead: This is a person who has become known to an organization, typically by downloading content, attending a webinar, being scanned at an event booth, etc.
    • Low-Priority Lead: This is person whose identity and contact information have been obtained from a third party source, typically LinkedIn search or list purchase.

      In addition to having different priority levels, the vast majority of companies have a lead-source field on their lead/contact object. Lead source may have categories (marketing-generated, channel-generated, product-generated, sales-generated, etc.) and sub-categories (demo request, content download, specific channel partner, etc.).
  • Marketing Qualified Lead (MQL): This is a lead, as defined above, who has met a level of quality deemed sufficient to pass to the sales team. Leads become MQLs by achieving a scoring threshold, often implemented in a Marketing Automation Platform (MAP). In a MAP, leads accumulate points based on ICP/firmographics, persona/demographics, and engagement/intent.

    In CRM, MQLs are usually lead objects though they can be contact objects as well.

    For reference, Salesforce Pardot defines MQLs here as leads assigned to sales reps.

    I prefer to only deem a lead an MQL once the person has expressed direct interest in speaking with sales via any channel – inbound, partner, in-app (product-led), or outbound.
  • Sales Accepted Lead (SAL): An MQL can become an SAL in one of two ways. One, a salesperson (xDR or AE) can manually indicate their intent to engage the person for instance by clicking an SAL checkbox on a lead object or contact object in CRM. Two, the salesperson can take an action such as converting a lead object to a contact object in CRM, importing the lead into a sales engagement platform (SEP), or contacting the lead. In CRM, SALs may be lead objects but are more commonly contact objects. Few companies use or track SALs, preferring instead to track the conversion of MQL directly qualified opportunities.

    Though extremely rare, some refer to SALs using the terminology sales engaged lead (SEL).

    I recommend avoiding the use of SALs in CRM. Instead, create a Stage 1 “Qualifying” opportunity once a meeting is scheduled with the person and add the contact to the opportunity. The opportunity remains in Stage 1 until an AE has spoken with the person and determined a qualified opportunity exists.
  • Sales Qualified Lead (SQL): Unfortunately, the term SQL means many different things to many different people. I’ll start by reviewing the variety of interpretations and then share my recommendation.

    One interpretation is that an SQL is the equivalent of what I defined as a high-priority inbound lead – someone who has expressed intent to speak with sales – since this marketing lead is qualified enough to be sales-worthy. A second interpretation is that an SQL is the equivalent of an SAL – an MQL that has been accepted by sales either manually or by taking action in CRM; this interpretation is that sales has further qualified the MQL. A third interpretation is that a SQL is lead/contact object status indicating that a person was ultimately associated with a qualified opportunity. Salesforce Pardot defines SQLs here using a variation of this third interpretation – prospects associated with opportunities thus skipping the need for a status field. A forth interpretation is that a SQL is a qualified opportunity.

    To keep my definitions mutually exclusive, I’m comfortable with the third interpretation of using SQL as a lead/contact object status or as former MQL ultimately associated with a qualified opportunity. Tracking the progression of individuals from Lead to MQL to SAL to SQL is more applicable in a traditional contact-based motion with with a more modern account-based motion.

    Instead of or in addition to using SQL to denote lead/contact status, I recommend advancing a Stage 1 “Qualifying” opportunity to Stage 2 “Developing” once the meeting has been held and the AE determines there is a decent chance of winning business via application of a qualification framework like BANT or MEDDPICC. Stage 2 opportunities in this process flow are qualified and therefore the basis for win rate reporting.

For more information on sales stages in CRM, please see this documentation.

ABM/ABX Quick Start

  1. Define your ICP
  2. Define target account list
  3. Define success metrics, esp. pipeline & bookings from target accounts
  4. Identify key contacts and build dossiers on them
  5. Create personalized messaging/content & communication cadence for each account
  6. Architect and execute multi-touch, multi-channel campaigns inclusive of:
    • exec-to-exec outreach
    • digital targeting/re-targeting on web & social
    • events
    • seek referrals
    • sales outreach (email, phone, social, direct mail)
  7. Measure & optimize

ABM Metrics

  • Target Account Coverage = percent of target accounts engaged by your marketing programs and sales efforts
  • Engaged Accounts = Target accounts showing meaningful interaction (e.g., attending webinars, downloading content, engaging on social media) [# of accounts or % of target accounts]
    • Engaged Accounts is closely related to the harder to measure concept of Marketing Qualified Accounts (MQAs). I don’t love the MQA concept because it removes sales from the measure which goes against the point of ABM.
  • Target account penetration rate = avg. # of engaged contacts within engaged target accounts
  • Target account pipeline (# or $)
    • Target Account Pipeline is closely related to the harder to measure concept of Marketing Qualified Opportunties (MQOs). I don’t love the MQO concept because it removes sales from the measure which goes against the point of ABM.
  • Target account win rate, ASP, & sales cycle
  • Bookings from target accounts
  • GRR & NRR from target accounts

GTM Strategy for B2B Professional Services Firms

  • ICP: Identify your target market industry, company size, geographic location, and other relevant factors.
  • Practice Areas: Be known as the #1 provider in a niche. For instance, ZS Associates is known as THE go-to for healthcare GTM
    • Competitive Analysis: Don’t get too wrapped up in this but know the competition in the niche since it is very hard to replace an incumbent with a dominant brand
    • Customer Analysis: Conduct surveys, interviews, and market analysis to understand the specific challenges and needs of your target audience. You can/should also publish this as content.
  • Branding / Content:
    • Content for PS firms needs to be extra robust, no fluff. This means:
      • TOFU: Deep / valuable “State of …” primary research studies with larger sample sizes. You can/should also turn around and use this data as the basis for custom benchmarking; benchmarking can be used for lead gen as well as project revenue.
      • BOFU: Detailed case studies.
    • Digital marketing is valuable for branding but is less likely to yield truly qualified leads
    • Website: As with any other business, maintain an exceptional web presence that not only makes what you do and who you serve clear but also exposes high value thought-leadership content. Such content is often ungated so consider using visitor identity resolution tools.
  • Channels & Tactics (aka AMB/ABX)
    • Repeat business and client referrals: For PS firms, most business ultimately comes from add-on engagements with existing customers and from word-of-mouth client referrals. To that end, PS firms must go above and beyond to delight customers on every engagement.
      • Conduct periodic “impact assessments” with clients to (a) review the impact of prior work completed (b) identify opportunities for additional projects
      • Cultivate a ‘white-glove’ customer reference program
    • Referral partners, esp. ISVs & “influencers”
    • Direct, personalized, high value outbound from the firm’s principals
      • PS companies need to come in with a strong, prospect-specific point of view. Listen to the following clip by Mark Roberge on his Science of Scaling podcast for an example of a ‘middle-up’ strategy
    • Events:
      • Industry events: Booths & typical sponsorship are rarely successful for PS firms. Instead, you know you’ve ‘arrived’ when you are invited to speak without having to pay to play.
      • 1st party “own” events: Hosting your own intimate events (ex: dinners) will be one of your best channels. See the Event Marketing page for guidance.
  • Talent: Since this overlaps with other categories (Branding, Channels, etc.), I’m separating Talent. The gist is that PS firms need partners to be exceptional at both demand generation and at project execution. On the former, established thought-leaders have a huge advantage.

GTM Strategy for Highly Technical Solutions (incl. DevOps)

  • Marketing
    • Branding:
      • Adopt a posture that emphasizes functionality, reliability, integration, security, etc. over flashy/visionary marketing
      • Focus on technical content marketing (SEO) to drive word-of-mouth
    • Demand Gen:
      • Engage the open-source community
      • Participate in technical/developer communities and events. For example, respond to user technical questions in StackOverflow (or the equivalent for your solution). If/when large enough, run your own forum though that is less common these days.
      • Foster user advocacy (ask: “How can I make it ‘cool’ to be a ninja-warrior user of my product in the way companies like Tableau have done?’)
      • Use paid channels only selectively (StackOverflow or similar rather than LinkedIn, Facebook, etc.)
      • Technical users tend not to respond to cold outbound prospecting
  • Sales
    • Demos are necessary but not sufficient. Give user buyers hands-on access to the product.
      • Lower ASP solutions: In-depth demo/overview videos; PLG – free-trials/freemium models; self-service purchasing & upgrades
      • Higher ASP solutions: Demos led by sales engineers; PoCs
  • Product/Pricing/Other
    • Offer robust self-service onboarding
    • Provide extensive documentation (with code examples or similar)
    • Integrate seamlessly with existing tools/platforms in your solution ecosystem
    • Provide robust APIs (where applicable)
    • Gravitate toward usage-based pricing (though for many technical solutions like CAD/CAM, seat-based pricing is still preferred)
    • Provide regular updates & patches

B2B SaaS Funnel Benchmarks

  • Email Marketing:
    • Open rate: 44% (source)
    • Email click-through rate: 3.67% (source)
    • Reply rate (source)
      • Overall: 3.7%
      • Positive reply rate: 1.7%
  • Demo Form (source: ChiliPiper 2024; unpublished study n=2,948,453)
    • Demo form complete-to-MQL = 87%
    • MQL from demo form-to-meeting booked = 65%
  • Visitor-to-Lead (inbound)
  • Lead-to-MQL (inbound)
  • MQL-to-SQL/SQO
    • Insight Partners (by ASP)
      • 26.5% for < 5K
      • 12.5% for 5-25K
      • 8.9% for 26-74K
      • 4.9% for 75K+
    • 12% (source)
      • 43.75% MQL-to-SAL
      • 63.33% SAL-to-SQL
      • 43.44% SAL-to-SQO
    • 13% (source)
    • 16% (source)
      • 38% MQL-to-SQL
      • 42% SQL-to-SQO
    • 20% (source)
    • 20% with range 13% to 46% (source)
      • 44% MQL-to-Meeting
      • 73% Meeting-to-SAL
      • 63% SAL-to-SQO
    • 21% (source; 44% x 48%)
      • 44% MQL-to-SQL
      • 48% SQL-to-SQO
  • SQL/SQO-to-Closed Won
    • Insight Partners by ASP:
      • 70.9% for < 5K
      • 18.6% for 5-25K
      • 15.8% for 26-74K
      • 3.1% for 75K+
    • 6% (source)
    • 21% with range 15% to 32% (source)
    • 31.25% (source)
    • 32% (source)
    • 37% (source)
    • 56% (source)

Inbound Lead Routing

(ToH to Gerry Praysman for his assistance with this.)

Sales-Marketing Service Level Agreement (SLA)

Marketing Responsibilities

  1. MQL Scoring Criteria & Thresholds
    • Firmographic fit: Company size, industry, etc.
    • Demographic fit: Job level, job role, etc.
    • Behavioral/Engagement: 1st party (demo request, content downloads, webinars, etc.); 2nd party (partners); 3rd party (review site visit)
  2. Volume commitment

Sales Responsibilities

  1. Follow up timeline
    • Ex: 24 or 48 hours
  2. Conversion commitment
    • Ex: 50%+ converted to SQL/SAL
  3. Feedback on all DQ’d MQLs
  4. Process for recycling leads into marketing nurture

KPIs

  • MQL to SQL conversion rate
  • SQL/SAL to SAO conversion rate
  • MQL-to-SQL/SAL response time
    SQL/SAL-to-1st touch time
  • win rate & bookings from MQLs
  • LTV/CAC from MQLs

Marketing Agencies

(*) = recommended

Demand Gen Software Vendors (incl. ABM)

(*) recommeded

Direct Mail Providers

Marketing Recruiting Agencies

(*) = recommended

  • (*) Artisinal
  • (*) Cole
  • (*) Daversa
  • (*) Husk
  • (*) RevelOpne
  • (*) True

Referral Software

1 The author of this blog is employed by Insight Partners who has invested in 6Sense

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