Lead Yield: The #1 Sales Metric Your Team Has Been Missing
By Rachel Serpa
Your team is constantly receiving new leads, and as you know, no two of them are exactly the same.
Some are probably inbound and come mostly from your marketing team, while others are outbound and sourced by reps themselves. Some may be from B2B companies and others from B2C. Some are extremely tough closes, yet for others it seems like the stars align and they close exactly as planned for more than anticipated.
But when these leads are just a name in a list of hundreds or even thousands of other businesses, it’s hard to know what you’re going to get. Because of this, reps will often just start at the top of a list and work their way down. Or, they might cherry-pick leads that are similar to those that have been easy closes in the past.
Either way, good leads can slip through the cracks, while bad leads can waste your team’s time. In fact, it’s been proven that reps ignore 50% of marketing leads on average. So how do you know what makes one lead better than another? And how do you help your team prioritize and focus on the leads that will drive the most value for your business?
Say Hello to Lead Yield
Lead Yield is just one example of a Yield Measure – measures that are used to understand how much value you get in return for your investments at each stage of the sales pipeline. With lead yield, companies can:
Strategically invest in growth: Understanding lead yield is a method for directly quantifying the ROI for marketing channels, and supports arguments for growing/cutting programs.
Forecast more accurately: By knowing average deal sizes based on dimensions such as industry and marketing channel, forecasts can be supported by historical data rather than a one-size-fits-all model.
Effectively prioritize efforts: Knowing which types of leads drive the most value for your business enables you to strategically score and prioritize both inbound and outbound leads.
The equation for lead yield is as follows: Sales Revenue / # of Leads Generated. You can see an example of this equation worked out below.
In this scenario, the yield for all leads, or “aggregate lead yield,” is $101.77. This means that, with conversion rates and lead quality held constant, we can forecast $101.77 of revenue for every lead in our pipeline.
Super helpful, right? But we’re just getting started. The real value of lead yield becomes apparent when we begin to segment leads and calculate their yield by dimension.
Lead Yield by Dimension
Think of all the potential factors that can touch and impact each of your deals at any point during their journey through the funnel, from reps, to pricing, to lead source. These are dimensions.
Rather than viewing your sales funnel in aggregate, viewing it by relevant dimensions helps uncover underlying trends, patterns or variables that indicate levers teams can pull to scientifically impact sales.
To understand what sets one lead apart from another and identify the types of leads generating Go to the full article.