B-to-B Lead Generation:

Marketing ROI & Performance

Evaluation Study

A special report from MarketingProfs,

with support from Lenskold Group

Copyright 2008. MarketingProfs Research Insights, MarketingProfs, LLC. All rights reserved.
B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Table of Contents
Executive Summary 2

Introduction & Research Methodology 6

About the Author Lenskold Group 7

Detailed Findings 8
1. Lead Generation Objectives 9

2. Lead Generation Marketing Metrics 12

3. Marketing and Sales Alignment 14

4. Key Correlations to Growth 16

5. Marketing ROI Discipline 20

6. Key Drivers of Effectiveness 26

7. Budget and Goal Alignment 32

8. Comparisons by Company Size 34

9. External Perspectives 35

Participant Profile 38

About MarketingProfs 43

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B-to-B Lead Generation:
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Executive Summary
Lead generation marketing is responsible for that critical connection between the positive
impressions of brand marketing and the results-driven environment of the sales
organization. Lead generation often seems within reach of very quantifiable financial
impact but falls short based on the information void from sales and channel partner
reporting gaps. As seen in this research, quantified impact tends to be split between lead
quantity and lead quality. Closing the insight gap enables marketers to improve their
measured impact and manage both quality and quantity of their lead generation. This
research study explored the practices in place from marketing objectives to lead
definitions, sales alignment, and ultimately the metrics and measurements used.

The return on investment (ROI) of lead generation marketing requires converting leads
generated into incremental sales. Higher sales conversion rates and higher value customers
results in higher ROI, making it clear that lead quality counts. Sure increasing quantity is
important to meet objectives, but it does not necessarily improve ROI. Managing the
effectiveness and efficiency of lead generation marketing requires clearly defined
objectives, better insight, alignment with the sales organization, and the discipline to
measure ROI.

1. Marketers must set objectives, definitions, and metrics that reflect lead quality.
One-third (35%) of the marketers surveyed indicated their primary lead generation
marketing objective is lead quality based on sales conversion rates and an
additional 25% use an objective of lead quality based on sales acceptance.
Combined, 60% of marketers are working toward these two lead quality
objectives compared to the remaining 40% whose objectives are tied to lead
quantity.

The prioritization of quality over quantity slips a bit when we look at how leads
are defined. Over half (52%) of all lead generation marketers surveyed indicated
they use lead definitions that include no qualification, while just 19% define leads
as contacts highly qualified using screening standards of sales organization. In fact,
when looking specifically at the portion of marketers who indicated they operate
with a lead quality objective, one out of four (39%) report using a lead definition
of either any contact name generated by marketing or all inbound responses to
marketing initiatives, both of which are more quantity driven than quality driven
definitions.

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Metrics are an important part of effective lead generation as well. Companies that
report they are outgrowing their competitors were more likely than those reporting
slower growth to use conversion rate and financial performance metrics such as
Lead-to-Purchase Conversion Rate (40% vs. 20%), Cost per Sale (36% vs. 20%),
and Contact-to-Purchase Conversion Rate (24% vs. 15%).

2. Marketing must influence conversion rates to improve lead generation ROI.

While the feedback was indirect, the marketers participating in this survey
provided their view of how the sales organization would rate their lead generation
performance, which provided directional insight into key areas where additional
marketing support can prove to be beneficial.

Marketers expected the sales organization to provide the most negative ratings (1
or 2 on a 5-point scale) on their performance for nurturing contacts stalled or not
qualified by sales (38%), followed by their performance for conditioning leads to
create higher preference and higher purchase conversion rates (35%). There is an
opportunity to increase the ROI of lead generation marketing by getting more
value from leads already generated before spending additional budget to boost the
quantity of leads. In some cases, conditioning leads with additional marketing
touchpoints prior to the handoff to the sales organization provides a better quality
of lead that will have higher conversion rates or purchase higher value solutions. In
other cases, taking unqualified leads back from the sales organization for
additional nurturing allows the company to further leverage the initial investment
to generate those leads and reduces the cost of nurturing by expensive sales
resources.

Our analysis found that companies that reported more effective lead generation
marketing were two to three times as likely to provide positive performance ratings in
terms of conditioning leads as well as supporting the sales group within the sales
pipeline, compared to those with less effective lead generation marketing (see the
charts in Section 6 of the Detailed Findings). Clearly this correlation with increased
effectiveness is a good indicator of the need to concentrate on improving conversion
rates with marketing prior to and during the sales pipeline period.

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3. Better marketing and sales alignment on lead quality is critical for growth.
Marketing and sales alignment related to managing lead quality is a problem area
for lead generation marketers. Roughly half provided negative ratings on their
alignment with sales to jointly analyze win-loss drivers, measure ROI on lead
generation marketing, and provide closed-loop sales tracking of lead performance,
compared to roughly one quarter who indicated positive ratings for these practices.
The insight gained from tracking lead performance and understanding win-loss
drivers is critical for lead generation marketers to improve quality through better
targeting and better messaging.

Alignment between marketing and sales has a strong connection to marketing

effectiveness and reported growth. Companies expecting to outgrow their
competitors were roughly three times more likely to report positive ratings in all of
the areas noted above, as well as alignment through joint planning of lead
generation marketing. The same increase in positive ratings was found for
companies reporting more effective lead generation marketing performance over
companies with less effective marketing. See Section 4 and Section 6, respectively,
for detailed charts.

4. Increased ROI discipline supports lead generation marketing effectiveness.

Lead generation marketers that use marketing ROI and profitability metrics were
much more likely to report having more effective lead generation marketing than
companies using just traditional, non-financial marketing metrics (60% vs. 35%).

Companies with the discipline to use marketing ROI metrics also show advantages
in other areas related to improving marketing profitability. These companies are
more likely to have their primary lead objective as lead quality based on sales
conversions (41% vs. 29% of traditional metrics users), use lead definitions that
include high qualifications based on the screening standards of the sales
organization, show better marketing and sales alignment ratings, and indicate
much higher use of financial and sales conversion metrics (see Section 5 for
details).

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Looking across these findings, lead generation marketers should consider the
following priorities to improve their overall performance effectiveness.
Invest in improving lead quality inclusive of both incremental value and higher
conversion rates to improve ROI, marketing profitability, and growth.
Work on better alignment with sales, specifically to get closed-loop tracking
and joint assessment of win-loss drivers, which provide the critical insight
necessary for improving lead quality.
Establish lead generation objectives, definitions, and metrics that balance lead
quality and quantity, drive increases in marketing effectiveness, and align
marketing decisions with business objectives.
Look for opportunities for better conditioning of leads prior to passing leads to
sales, better marketing support within the sales pipeline, and better nurturing of
unqualified leads to net higher overall conversion rates from the leads
generated.
Use ROI analyses and measurements to guide increased investment against
high-value, high-potential leads and identify the appropriate budget allocation
between incremental quality and incremental quantity.

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Introduction and Research Methodology

The B2B Lead Generation ROI study was included as a module within the 2008
Marketing ROI & Measurements Study conducted in the first quarter of 2008 with
MarketingProfs members worldwide. Of the 834 marketing practitioners participating in
the online survey worldwide, 311 qualified as representing companies with at least half of
their revenues generated from business customers (B2B) and whose marketing
organization was responsible for generating leads that were either passed to an internal
sales team or external channel partners. Marketing practitioners are defined as those
individuals responding for their own company. Survey participants that indicated they
were external consultants or agencies responding for their client organizations, or
academics and industry experts responding for the general business community were
excluded from this analysis (differences from the reported results are noted within the
detailed findings).

Lead generation is an important role for marketing, especially in the B2B environment.
This special report analyzed lead generation objectives, qualification, sales alignment, and
performance metrics to determine the connection to growth, lead generation effectiveness,
and ROI (Return on Investment) metrics.

The 2008 Marketing ROI & Measurement Study, which has been conducted annually by
Lenskold Group and MarketingProfs for the past four years, continues to examine trends
and progress across the broad range of marketing organizations worldwide. (This report
is also now available at www.lenskold.com.)

Note on survey results: A total of 311 participants qualified for this module of the survey, however,
since responses to every question were not required, participants could choose to skip questions.
Therefore the base of responses varies by question even though all participants were presented with the
opportunity to answer all questions. Dont know responses were removed from the base unless noted.
Analyses were tested at the 95% confidence level unless noted.

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About the Author

This research was developed, analyzed, and drafted into report format by Lenskold
Group. Founded in 1997, the Lenskold Group (www.lenskold.com) provides consulting
services to deliver a comprehensive approach to marketing ROI management, marketing
measurement and analytics, and profitability planning tools. Jim Lenskold, founder and
president of Lenskold Group, has been a contributor of articles, webinars, research
reports, and conference presentations for MarketingProfs since 2004. Jim is author of the
book Marketing ROI, The Path to Campaign, Customer and Corporate Profitability
(McGraw Hill), named one of the five most influential marketing books of 2004 by the
American Marketing Association Foundation. The Lenskold Group serves Fortune 1000
and emerging companies in the US, Canada and Europe. Jim can be reached at
[email protected] or (+1) 732-223-8886.

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DETAILED FINDINGS

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Detailed Findings
This survey explored perceptions, behaviors, and lead generation performance. The
questions were analyzed using comparisons of the respondents reported levels of lead
generation effectiveness, their sales growth relative to direct competitors, their marketing
budget levels, and their use of marketing ROI/profitability metrics, to determine the
correlation between their responses and their performance. This section covers the
significant findings from that analysis.

1. Lead Generation Objectives

Lead quality has a clear advantage over lead quantity as the primary objective with 60%
of lead generation marketers citing quality objectives compared to 40% citing quantity
objectives. More specifically, more than a third (35%) of marketers are working toward
lead quality based on sales conversion rates, which is the choice most aligned to managing
marketing profitability of the four choices presented in the survey, as shown below in
Figure 1. Another 25% reported their primary objective as lead quality based on sales
acceptance. Objectives tied to lead quantity were split between those based on the
quantity of new names generated (23%) and those based on the volume passed to
sales (17%).

Figure 1: Lead Generation Objectives

Which of the following choices best describes your primary objective for lead generation? (n = 265)

17%

35%

Lead quantity volume passed to sales

Lead quantity new names generated
23% Lead quality based on sales acceptance
Lead quality based on sales conversion

25%

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B-to-B Lead Generation:
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Volume of leads is important but generally needs to come second to quality when
managing marketing profitability. Marketing ROI and profitability are driven by
targeting decisions that prioritize prospects based on:

1) Higher value per sale (profit contribution from either incremental transactions
or incremental customers)
2) Higher sales conversion rates

Sales conversion rates increase as low potential prospects are screened out of the sales
cycle (decreasing lead quantity). By removing leads that have little or no probability of
converting to a sale, the cost invested into sales resources is reduced, thereby increasing
ROI and profit contribution. Lead generation marketers can contribute more to the
bottom line by first improving lead quality to increase ROI, and then scaling their success
to higher levels with a greater quantity of those quality leads.

There is a disconnect between establishing lead generation objectives and the definitions
used for leads generated, as the lead definitions reported are less quality-focused than the
objectives reported. Overall, 52% use lead definitions that include no screening for
quality, with 28% using any contact name identified or generated by marketing and
24% using all inbound responses to marketing. The remaining 48% included some
level of qualification in their definition. Eighteen percent (18%) partially qualify leads
with scoring questions and 10% partially qualify leads through an outbound screening
call. Just 19% define leads as contacts highly qualified using the screening standards of
the sales organization.

Figure 2: Lead Definitions

Which of the following statements best describes how marketing defines a lead that will be passed
to a sales team? (n = 272)
19%
Any contact name identified or generated by
28% marketing

All inbound responses to marketing initiatives

Contacts partially qualified using scoring questions

10%
captured within the inbound response

Contacts partially qualified through an outbound

screening call

Contacts highly qualified using the screening

18% standards of the sales organization
24%

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B-to-B Lead Generation:
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A deeper analysis better illustrates the gap between having lead quality objectives and
using lead quality definitions. To effectively work toward a primary objective of lead
quality, leads must be properly defined to set expectations between the marketing and
sales organizations. Of those choosing lead quality as their primary objective, only 61%
indicate having some level of quality screening in their lead definition (the combined
responses of 25% highly qualified, 12% partially qualified with outbound screening call
and 24% partially qualified using scoring questions as detailed below). The balance of
those choosing lead quality (39% in total) define leads as either any contact name
generated (20%) or all inbound responses to marketing (19%).

Figure 3: Lead Definition Based on Lead Generation Objective

Which of the following statements best describes how marketing defines a lead that will be passed
to a sales team? (n = 56, 84, 79, and 117; see Figure 1 for the question defining the segments)

Lead Definition

Contacts highly qualified using the screening 25%

standards of the sales organization 8%

Contacts partially qualified through an outbound 12%

screening call 7%
Contacts partially qualified using scoring 24%
questions captured within the inbound response 9%

All inbound responses to marketing initiatives 20%

38%

Any contact name identified or generated by 19%

marketing 39%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Marketers with a Lead Quantity Objective Marketers with a Lead Quality Objective

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2. Lead Generation Marketing Metrics

Marketers manage their performance with multiple metrics, as they should, but there are
no clear standards for lead generation metrics. Of the list of lead generation metrics we
asked survey participants to rate, no one single metric was used to track marketings
success by more than half of the group. The highest incidence of use was with Quantity of
New Leads, at 49%. Conversely, it is quite surprising that roughly half of all lead
generation marketing organizations do not track such a basic metric as Quantity of New
Leads.

The Lead-to-Purchase Conversion Rate was used much more often than Contact-to-
Purchase Conversion Rates (37% vs. 18%). Both are good measures of quality based on
the connection to a purchase. The higher incidence of Lead-to-Purchase Conversion Rate
is not a surprise since this tends to be more easily tracked within a single sales system
where the Contact-to-Purchase Conversion Rate is likely to require a connection between
marketing and sales databases.

The financially-oriented metrics that scored higher on this list included Cost per
Marketing Lead (34%), Cost per Sale (29%) and Revenue per Sale (32%). These are quite
a bit higher than the more ROI-aligned metrics of Profit per Sale (14%) and Lifetime
Value (9%) which require more data and analysis to track.

Figure 4: Lead Generation Metrics

Which of the following metrics are used to track marketings lead generation success? (n = 295)

Quantity of new leads 49%

Lead-to-purchase conversion rate 37%
Cost per marketing lead 34%
Revenue per sale from marketing-generated leads 32%
Cost per sale (for marketing-generated leads) 29%
Marketing lead pipeline (or opportunity) value 26%
% of leads accepted by Sales 24%
Quantity of first time buyers from marketing-generated leads 23%
Contact-to-purchase conversion rate 18%
Sales cycle length (i.e., lead-to-close time) 16%
Profit per sale from marketing-generated leads 14%
Lifetime value of marketing-generated leads 9%

0% 10% 20% 30% 40% 50% 60%

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Cost per Marketing Lead and Cost per Sale are both good metrics to help keep costs in
line with value. As marketers become more focused on lead quality in terms of both
conversion potential and total customer value, these metrics will need to be used with
caution and not be set as marketing objectives. For example, experiencing an increase
in Cost per Lead and Cost per Sale concurrent with generating better quality leads is often
justified and beneficial to the company. ROI analysis can be used to identify the
relationship between cost per lead and lead quality to support making greater investments
for greater quality.

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3. Marketing Performance and Sales Alignment

We captured marketers opinions of how sales would rate marketing and on how well
marketing and sales are aligned using a 5-point rating scale, from 1 for very poor to
5 for excellent. Our analysis, shown below in Figures 5 and 6, compares the top two
ratings (4 and 5), the bottom two ratings (1 and 2), and the gap between them (% with
top two ratings minus the % with bottom two ratings) for each statement. The gap
measure of positive ratings above negative ratings is a good indicator of where the
perceptions are strongest or weakest for the population surveyed.

The most favorable ratings were provided for quality of leads generated where positive
ratings exceeded negative ratings by 14% (35% positive vs. 21% negative). Other areas
where the positive responses outweighed the negative responses included supporting the
sales group with purchase conversion rates (35% vs. 23%) and generating lead quantity
(33% vs. 27%).

Over one-third of lead generation marketers indicated that the sales organization would
assess marketing performance negatively for nurturing stalled or unqualified contacts
(38%) and for conditioning leads to create higher preference and higher purchase
conversion rates (35%).

Figure 5: Sales Organizations View of Marketing Performance

In your opinion, how would the sales organization rate marketing on the following using a scale
from 1 for very poor to 5 for excellent? (n = 252)

Top 2 Ratings Bottom 2 Ratings Gap

Quality of the leads generated 35% 21% 14%

Supporting the sales group within the sales

35% 23% 11%
pipeline to increase purchase conversion rates

Quantity of leads generated 33% 27% 6%

Conditioning leads to create higher preference

27% 35% -8%
and higher purchase conversion rates

Nurturing contacts that are stalled or not qualified

27% 38% -11%
by Sales

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When asked to rate the alignment between marketing and sales, the only response that
had more positive ratings than negative was joint planning between marketing and sales
(38% vs. 34%), shown in Figure 6 below. For the remaining three areas assessed, more
negative than positive ratings were provided. The least favorable aspect of sales and
marketing alignment was in jointly analyzing the win-loss drivers to identify areas of
marketing improvement (26% positive vs. 47% negative). Measuring the ROI of lead
generation marketing was rated low by 48% compared to 27% positive, and providing
closed-loop sales tracking back to marketing was close to the same (47% vs. 27%).

Figure 6: Sales and Marketing Alignment

How would you rate the alignment of marketing and sales on the following aspects of lead
generation using a scale from 1 for very poor to 5 for excellent? (n = 257)

Top 2 Ratings Bottom 2 Ratings Gap

Engaging in joint planning of lead generation

38% 34% 4%
marketing
Providing closed-loop sales tracking of lead
27% 47% -20%
performance back to marketing

Measuring the ROI of lead generation marketing 27% 48% -21%

Jointly analyzing the win-loss drivers to identify

26% 47% -22%
areas of marketing improvement

This analysis shows that there are significant opportunities to improve the alignment
between marketing and sales by nurturing leads, conditioning leads, and managing
effectiveness (e.g., closed loop tracking, ROI measures, and joint win-loss analysis). With
better analysis and insight, especially from closed-loop tracking, marketing can align its
efforts with sales to effectively and efficiently manage prospects through the entire buying
cycle. In fact, marketers reporting their lead generation is more effective than competitors
show much higher scores on both alignment and sales perceptions of marketing as
presented in the section that follows.

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4. Key Correlations to Growth

More than half (57%) of those surveyed expect to outgrow their primary competitors in
the upcoming year. Just 8% expect their growth to lag behind their competitors (see
Figure 7). A comparison of the greater growth companies with the slower growth
companies showed differences that highlight the correlation between lead generation
practices and growth. The sample size for the slower growth segment was small but the
differences noted are at the 95% confidence level.

Figure 7: Expected Growth

How would you describe your firms expected growth in the upcoming year relative to your
primary competitors? (n = 311)

Much slower
growth , 1%
Somewhat slower
growth , 7%
Much greater
growth , 18%
About the same
growth , 35%

Somewhat greater
growth , 39%

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B-to-B Lead Generation:
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Companies with more effective lead generation were more likely to be outgrowing their
competitors. A combined 58% of companies outgrowing competitors described their lead
generation performance as much more or somewhat more effective than competitors
compared to just 20% of those whose growth was lagging behind competitors (see Figure
8).

Figure 8: Expected Growth and Lead Generation Effectiveness

Would you say your company's lead generation marketing performance relative to your direct
competitors is much more effective, somewhat more effective, about the same, somewhat less
effective or much less effective? (n = 194 and 35; see Figure 7 for the question defining the
segments)

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

19%
Much more effective 9%

39%
Somewhat more effective 11%

23%
About the same
23%

15%
Somewhat less effective 31%

4%
Much less effective 26%

Greater Growth Slower Growth

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The differences in positive ratings were quite pronounced for the different forms of
marketing and sales alignment. Companies with greater growth were much more likely to
engage in joint planning (46% positive ratings vs. 18% for slower growth companies).
More than one in three marketers representing companies with above average growth
provided high rating scores for closed loop tracking, joint analysis of win-loss drivers, and
measuring ROI for lead generation programs (see Figure 9), more than double the positive
ratings from marketers representing slower growth companies.

Figure 9: Marketing and Sales Alignment of Greater Growth vs. Slower Growth Companies
How would you rate the alignment of marketing and sales on the following aspects of lead
generation using a scale from 1 for very poor to 5 for excellent? (n = 196 and 34; see Figure
7 for the question defining the segments)

Top 2 Ratings

Greater Growth Slower Growth

Engaging in joint planning of lead generation marketing 46% 18%

Providing closed-loop sales tracking of lead performance

37% 18%
back to marketing

Jointly analyzing the win-loss drivers to identify areas of

36% 15%
marketing improvement

Measuring the ROI of lead generation marketing 34% 15%

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While there was not a significant difference between higher growth and slower growth
companies in their selection of lead generation objectives or lead definitions, there were
significant differences in the use of the metrics Lead-to-Purchase Conversion Rate and
Cost per Sale. These metrics are shown in Figure 10.

Figure 10: Lead Generation Metrics by Greater Growth vs. Slower Growth Companies
Which of the following metrics are used to track marketings lead generation success? Check all
that apply. (see Figure 7 for the question defining the segments)

% Using Metrics

Greater Growth Slower Growth

Lead-to-purchase conversion rate 40% 20%

Cost per marketing lead 39% 33%

Cost per sale (for marketing-generated leads) 36% 20%

Contact-to-purchase conversion rate 24% 15%

Quantity of first time buyers from marketing-generated leads 22% 13%

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5. Marketing ROI Discipline

Marketers were asked if their firm calculates marketing profitability, ROI or similar
financial measures to assess marketing effectiveness. Lead Generation marketers provided
responses consistent (i.e., no significant difference) with the general population of
marketing practitioners from the main marketing ROI research study*, with just over one
in four marketers using marketing ROI / profitability metrics.

Figure 11: Use of Marketing ROI / Profitability Metrics B2B Lead Gen vs. All Marketers
Does your firm calculate marketing profitability, ROI (return on investment) or a similar financial
measure to assess marketing effectiveness? (n = 303 and 676)

Yes, we calculate ROI, net present value (NPV), or other 27%

profitability metrics for at least some of our marketing
campaigns/investments. 26%

Somewhat, we calculate some financial metrics such as 33%

cost per lead and cost per sale but not profitability
metrics such as ROI and NPV. 34%

No, we use traditional marketing metrics but not financial 40%

metrics.
40%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

B2B Lead Gen Marketers General Marketers

*Source: Lenskold Group / Marketing Profs as reported in the

2008 Marketing ROI and Measurements Study.

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A comparison between B2B lead generation marketing organizations that have adopted
marketing ROI and profitability metrics and those that continue to use only traditional,
non-financial marketing metrics showed significant differences. These correlations of
behaviors suggest that certain lead generation practices are more aligned to the
accountability and discipline of measuring and managing marketing ROI.

First, users of marketing ROI metrics tend to have somewhat or much more effective lead
generation marketing (60%), compared to those companies that use only traditional
metrics (35%). See Figure 12.

Figure 12: Lead Gen Marketing Effectiveness Users of ROI Metrics vs. Traditional Metrics
Would you say your companys lead generation marketing performance relative to your direct
competitors is: (n = 99 and 124; see Figure 11 for the question defining the segments)

8%
Much more effective 20%

Somewhat more effective 27%

40%

30%
About the same 22%

27%
Somewhat less effective 15%

9%
Much less effective 2%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Use ROI Metrics Traditional Metrics Only

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As shown in Figure 13, companies with the discipline to use marketing ROI metrics are
more likely to have their primary lead objective as lead quality based on sales conversion
(41% vs. 29% of traditional metrics users) while companies using traditional metrics
target lead quantity based on volume of new names generated (32% vs. 20% of
marketing ROI metrics users).

Figure 13: Lead Objective - Users of ROI Metrics vs. Traditional Metrics
Which of the following choices best describes your primary objective for lead generation? Choose
one. (n = 98 and 127; see Figure 11 for the question defining the segments)

Lead quality based on 29%

sales conversion 41%

Lead quality based 25%

on sales acceptance 23%

Lead quantity new 32%

names generated 20%

Lead quantity volume 13%

passed to sales 15%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Use ROI Metrics Traditional Metrics Only

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In addition, marketing organizations using marketing ROI metrics were more likely to
define leads passed to sales as contacts highly qualified using the screening standards of
the sales organization (25% vs. 14% of traditional metrics users). The companies using
only traditional metrics were more inclined to define leads as any contact name identified
by marketing (36% compared to 24% among users of ROI metrics). See Figure 14.

Figure 14: Lead Definition Users of ROI Metrics vs. Traditional Metrics
Which of the following statements best describes how marketing defines a lead that will be passed
to a sales team? (n = 99 and 136; see Figure 11 for the question defining the segments)

14%
25%

Contacts partially qualified through an outbound 4%

7%
screening call

14%
Contacts partially qualified using scoring 17%
questions captured within the inbound response
32%
All inbound responses to marketing initiatives 26%

Any contact name identified or generated by 36%

24%
marketing

0% 5% 10% 15% 20% 25% 30% 35% 40%

Use ROI Metrics Traditional Metrics Only

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Users of ROI metrics report higher use of all lead generation performance indicators than
those who are using only traditional metrics. With marketing ROI and profitability
metrics in place, lead generation metrics followed suit in terms of supporting good
financial and performance insight. In particular, Lead-to-Purchase Conversion Rates, Cost
per Marketing Lead and Cost per Sale metrics topped the list for marketing ROI users
(44%, 43%, and 41%, respectively).

Figure 15: Lead Generation Metrics Users of ROI Metrics vs. Traditional Metrics
Which of the following metrics are used to track marketings lead generation success? (n = 111
and 146; see Figure 11 for the question defining the segments)

% Using Metrics

Traditional Metrics
Use ROI Metrics
Only

Lead-to-purchase conversion rate 44% 21%

Cost per marketing lead 43% 16%

Cost per sale (for marketing-generated leads) 41% 16%

Revenue per sale from marketing-generated leads 38% 24%

Marketing lead pipeline (or opportunity) value 30% 18%

Profit per sale from marketing-generated leads 18% 9%

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Reported ratings on sales and marketing alignment were particularly strong for those
using marketing ROI metrics compared to those using only traditional, non-financial
marketing metrics (see Figure 16 below). Close to half of ROI metrics users offered high
ratings for each of the four aspects of alignment, including joint planning, closed-loop
tracking, analyzing win-loss drivers, and, of course, measuring the ROI of lead generation
marketing (51%, 49%, 44%, and 51%, respectively). By comparison, marketers using
only traditional metrics provided much lower positive ratings in the range of 10% to 17%
for these metrics with the exception of joint planning which was rated positive by 31%.

Figure 16: Aspects of Marketing and Sales Alignment Users of ROI Metrics vs. Traditional Metrics
Which of the following metrics are used to track marketings lead generation success? (n = 96 and
129; see Figure 11 for the question defining the segments)

Top 2 Ratings
Traditional Metrics
Use ROI Metrics
Only

Measuring the ROI of lead generation marketing 51% 10%

Engaging in joint planning of lead generation

51% 31%
marketing

Providing closed-loop sales tracking of lead

49% 13%
performance back to marketing

Jointly analyzing the win-loss drivers to identify areas

44% 17%
of marketing improvement

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

6. Key Drivers of Effectiveness

Marketers generally have confidence about their overall performance. When marketers
were asked to rate their performance relative to their competitors, 42% reported their
performance as more effective, 31% reported their performance as about the same, and
26% reported it as less effective. See Figure 17.

Figure 17: Lead Generation Effectiveness

Would you say your company's lead generation marketing performance relative to your direct
competitors is much more effective, somewhat more effective, about the same, somewhat less
effective or much less effective? (n = 243)

6% 12%

20% Much more effective

Somewhat more effective
About the same
30% Somewhat less effective
Much less effective

31%

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Yet there are significant differences in outlook between more effective performers and less
effective performers in the specific aspects of marketings performance. Those who report
they are more effective have a more positive view of how the sales organization would
rate marketings performance and the alignment of sales and marketing. In addition,
comparing those who rate their marketing effective to those who rate their marketing less
effective shows higher positive ratings for quality of leads (56% vs. 20%) and for
conditioning leads to create higher preference and conversion rates (46% vs. 13%) as
shown in Figure 18.

Figure 18: Sales Organizations View of Marketing Performance for More Effective vs. Less Effective
Lead Gen Performers
In your opinion, how would the sales organization rate marketing on the following using a scale
from 1 for very poor to 5 for excellent? (n = 89 and 56; see Figure 17 for the question
defining the segments)

Positive Ratings (top 2 on 5-point scale)

0% 10% 20% 30% 40% 50% 60%

Quality of the leads generated 56%

20%
Conditioning leads to create higher preference and 46%
higher purchase conversion rate 13%

Supporting the sales group within the sales pipeline 51%

to increase purchase conversion rates 22%

Quantity of leads generated 48%

21%

Nurturing contacts that are stalled or not qualified 34%

by Sales 25%

More Effective Lead Gen Marketing Less Effective Lead Gen Marketing

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Alignment from the up front joint planning of lead generation marketing to the back end
closed-loop tracking and ROI measurements is much stronger among those marketers
who perceive their marketing to be more effective than their competitors than among
those who perceive their marketing as less effective than competitors. See Figure 19
below.

Figure 19: Sales and Marketing Alignment for More Effective vs. Less Effective Lead Gen Performers
How would you rate the alignment of marketing and sales on the following aspects of lead
generation using a scale from 1 for very poor to 5 for excellent? (n = 92 and 57; see Figure
17 for the question defining the segments)

Positive Ratings (top 2 on 5-point scale)

0% 10% 20% 30% 40% 50% 60%

54%
Engaging in joint planning of lead generation marketing
23%

Providing closed-loop sales tracking of lead performance 41%

back to marketing 13%

39%
Measuring the ROI of lead generation marketing
13%

Jointly analyzing the win-loss drivers to identify areas of 34%

marketing improvement 21%

More Effective Lead Gen Marketing Less Effective Lead Gen Marketing

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B-to-B Lead Generation:
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As noted earlier, the use of marketing ROI and profitability metrics was consistent
between B2B lead generation marketers and the general audience of marketing
professionals, running at roughly one-in-four (26% and 27%, respectively as shown in
Figure 11). However, of the B2B lead generation marketers that report that they are more
effective than their competitors, 39% were using ROI and profitability metrics compared
to just 18% of the less effective performers. See Figure 20.

Figure 20: Use of Marketing ROI and Profitability Metrics for More Effective vs. Less Effective Lead
Gen Performers
Does your firm calculate marketing profitability, ROI (return on investment) or a similar financial
measure to assess marketing effectiveness? (n = 102 and 62; see Figure 17 for the question
defining the segments)

Yes, we calculate ROI, net present value (NPV), or other 18%

profitability metrics for at least some of our marketing
campaigns/investments. 39%

Somewhat, we calculate some financial metrics such as 31%

cost per lead and cost per sale but not profitability
metrics such as ROI and NPV. 31%

No, we use traditional marketing metrics but not financial 52%

metrics.
29%

0% 10% 20% 30% 40% 50% 60%

More Effective Lead Gen Marketing Less Effective Lead Gen Marketing

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B-to-B Lead Generation:
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On average, marketers reporting that they are more effective than their competitors also
indicate having larger marketing budgets than those with the less effective marketing. Of
those companies describing their lead generation as less effective than competitors, there
was a clear skew toward smaller marketing budgets. Of those indicating their
performance was less effective than competitors, 76% had less than $1 million in
combined marketing, advertising, and sales spending compared to 51% of those
describing their lead generation as more effective than competitors, as shown in Figure
21.

Figure 21: Marketing Spend for More Effective vs. Less Effective Lead Gen Performers
Approximately how much did your company spend on marketing, advertising and sales activities
in 2007? (n = 85 and 50; see Figure 17 for the question defining the segments)

0%
US$50 million or more
6%

US$5 million to under 8%

US$50 million 13%

US$1 million to under 16%

US$5 million 31%

Less than US$1 million 76%

51%

0% 10% 20% 30% 40% 50% 60% 70% 80%

More Effective Lead Gen Marketing Less Effective Lead Gen Marketing

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

More important than the total size of the budget is whether the budget is at or above a
level necessary to achieve their goals. Only 24% of companies that have less effective lead
generation programs report having sufficient budget while 65% indicated their budget
was below the level necessary to achieve their goals. This is quite different than the 57%
of those with more effective lead generation who indicate their budget is enough to
achieve their goals. Less effective performers were also more likely to report that there
was no connection between their budget level and goals (12% vs. 1% of the more
effective performers). See Figure 22.

Of course, marketers may be victims of the catch-22 that executives would be more
likely to increase the budget for lead generation marketing initiatives if they knew these
initiatives could be effective, however, companies without enough budget to achieve their
goals may never have the opportunity to demonstrate the potential to deliver effective
marketing.

Figure 22: Sufficiently Funded Marketing for More Effective vs. Less Effective Lead Gen Performers
Which statement best describes how well your marketing budget aligns to your goals? (n = 93 and
57; see Figure 17 for the question defining the segments)

45% 40%
40%
35% 32%
29%
30% 25%
25%
20% 17% 18%

15% 11% 12%

10%
10%
4%
5% 2% 1%
0%
Far more than Slightly more About the right Slightly below Far below the No connection
enough to than enough to level to the right level right level to between our
achieve our achieve our achieve our to achieve our achieve our budget level
goals goals goals goals goals and goals

More Effective Lead Gen Marketing Less Effective Lead Gen Marketing

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

7. Budget & Goal Alignment

The correlation between lead generation effectiveness and having enough budget to
achieve marketing goals was established in the previous section (i.e., more effective
marketers have larger budgets). In a deeper analysis of companies with or without
sufficient budget, a few noteworthy differences emerged.

All of the ratings that marketers expected the sales organization to provide in terms of
marketing performance were much higher for companies with sufficient budget compared
to those without sufficient budget (see Figure 23 below).

Figure 23: Sufficient Budget Influence on Sales Organization Ratings

In your opinion, how would the sales organization rate marketing on the following using a scale
from 1 for very poor to 5 for excellent? (n = 134 and 167; see Figure 22 for the question
defining the segments)

Top 2 Ratings
Budget At or Above Budget Below
Right Level Right Level
Quality of the leads generated 47% 30%

Quantity of leads generated 45% 26%

Supporting the sales group within the sales pipeline to

44% 30%
increase purchase conversion rates

Conditioning leads to create higher preference and

39% 19%
higher purchase conversion rates
Nurturing contacts that are stalled or not qualified by
33% 21%
Sales

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Marketers perceptions of sales and marketing alignment were also much more positive
for those reporting a sufficient marketing budget, as shown in Figure 24.

There are a number of reasons why a lack of appropriate budget can result in lower
ratings for both sales view of marketing performance and alignment between marketing
and sales. First, under-funding of marketing in a B2B company can easily be a reflection
of the executive views of marketing importance. For others, insufficient funding will limit
the quality of leads, the ability of marketing to effectively improve sales conversion rates,
and the ability to invest in measurements.

Figure 24: Sufficient Budget Influence on Sales & Marketing Alignment

How would you rate the alignment of marketing and sales on the following aspects of lead
generation using a scale from 1 for very poor to 5 for excellent? (n = 134 and 173; see Figure
22 for the question defining the segments)

Top 2 Ratings
Budget At or Above Budget Below
Right Level Right Level

Engaging in joint planning of lead generation marketing 50% 32%

Measuring the ROI of lead generation marketing 38% 22%

Providing closed-loop sales tracking of lead

38% 24%
performance back to marketing
Jointly analyzing the win-loss drivers to identify areas of
37% 21%
marketing improvement

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

8. Comparisons by Company Size

While there were very few major differences in lead generation practices based on
company size, there are some differences worth noting. For this analysis, company size
was based on revenue. Each of the three revenue segments represented close to a third of
those surveyed with 29% reporting less than $5 million in revenue, 33% reporting
revenue between $5 million and $50 million, and 31% indicating a revenue level above
$50 million (all US dollars; 7% indicated Dont Know).

First of all, larger companies that did have lead generation programs were slightly more
likely to pass these leads to just an internal sales organization than smaller companies.
Three out of four (73%) report passing their leads just to internal sales while the balance
primarily went to a combination of internal sales and external channel partners (24%).
Smaller companies were slightly more likely to pass leads to external partners (13% vs.
5% for mid-size companies and 3% for larger companies as shown in Figure 25).

Figure 25: Recipients of Marketing Leads By Company Size

Does your marketing organization generate leads that are passed on to a sales organization,
external channel partners, or both? (n = 108, 116, and 107 which excludes participants without
lead generation)

80% 73%
67%
70%
61%
60%
50%
40%
26% 28% 24%
30%
20% 13%
10% 5% 3%
0%
Yes, passed to our sales Yes, passed to external Yes, passed to both our
organization channel partners sales organization and
external channel partners

Less than US$5 million US$5 million to under US$50 million US$50 million or over

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Looking at the difference in lead quantity and lead quality objectives by company size,
Figure 26 shows mid-size and smaller companies with a favorable shift toward lead
quality compared to larger companies (64% and 60% compared to 53% for larger
companies). This chart combines responses for the two lead quality objectives (quality
based on sales acceptance and sales conversion) and the two lead quantity objectives
(volume passed to sales and new names generated). See Figure 26.

Figure 26: Lead Quality vs. Lead Quantity Objectives by Company Size
Which of the following choices best describes your primary objective for lead generation? (n = 98,
106, and 96)

53%
Marketers with a Lead
64%
Quality Objective
60%

47%
Marketers with a Lead
36%
Quantity Objective
40%

0% 10% 20% 30% 40% 50% 60% 70%

Less than US$5 million US$5 million to under US$50 million US$50 million or over

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Marketers expectations of how sales would rate their performance showed several
differences as reported in Figure 27. The ratings were based on a 5-point scale with 1
meaning poor and 5 meaning excellent.

Smaller and mid-size companies were more likely to report positive ratings (4 or 5) than
larger companies in terms of lead quality (37% and 36% vs. 28%).
Larger and mid-size companies had the advantage in terms of positive ratings for quantity
of leads (32% and 36% vs. 28%)

Respondents from mid-size companies expected sales to evaluate marketing

performance on supporting the sales group within the sales pipeline to be more
positive than smaller and larger companies (41% vs. 33% and 29%).
Mid-size companies also stood above the others in terms of positive ratings on
conditioning leads to create higher preference and higher purchase conversion rates
(30% vs. 23% of smaller companies and 22% of larger companies).
Nurturing stalled and unqualified leads received more positive ratings from the
mid-size companies as well as smaller companies (30% and 25%, respectively),
while this received the least favorable ratings for larger companies (18%).

Figure 27: Positive Ratings on Sales View of Marketing By Company Size

In your opinion, how would the sales organization rate marketing on the following using a scale
from 1 for very poor to 5 for excellent? (n = 101, 111, and 94)

Top 2 Ratings
Less than US$5 million US$50
US$5 to under million or
million US$50 million over
Quality of the leads generated 37% 36% 28%
Supporting the sales group within the sales pipeline to
33% 41% 29%
increase purchase conversion rates
Nurturing contacts that are stalled or not qualified by
30% 25% 18%
Sales
Quantity of leads generated 28% 36% 32%
Conditioning leads to create higher preference and
23% 30% 22%
higher purchase conversion rates

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Ratings on the alignment between marketing and sales, using the same 5-point rating
scale as noted above, showed that the smaller organizations clearly have an advantage
over the larger companies. The biggest differences, where the positive ratings declined
with company size, were in jointly analyzing win-loss drivers (36% smaller, 26% mid-
size, and 15% larger) and in providing closed-loop tracking (32%, 28% and 17%,
respectively). See Figure 28.

Mid-size companies, followed closely by smaller companies, had the advantage in terms
of engaging in joint planning of lead generation marketing (41% mid-size and 37%
smaller compared to 32% larger) and in measuring the ROI of lead generation marketing
(30% mid-size and 28% smaller vs. 20% larger).

Figure 28: Positive Ratings on Marketing and Sales Alignment By Company Size
How would you rate the alignment of marketing and sales on the following aspects of lead
generation using a scale from 1 for very poor to 5 for excellent? (n = 102, 114, and 95)

Top 2 Ratings

Less than US$5 million to

US$50 million
US$5 under US$50
or over
million million
Engaging in joint planning of lead generation
37% 41% 32%
marketing
Jointly analyzing the win-loss drivers to identify
36% 26% 15%
areas of marketing improvement
Providing closed-loop sales tracking of lead
32% 28% 17%
performance back to marketing
Measuring the ROI of lead generation marketing 28% 30% 20%

Marketers in smaller and mid-size companies that are competing with larger companies
must seek to leverage these advantages to make their marketing budget more effective and
efficient (our analysis shows no statistical difference in effectiveness and efficiency exists
today). Larger companies must work hard to improve this alignment as they strive to
increase their competitiveness.

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

9. External Perspectives
The survey results throughout this report include marketing practitioners and did not
include the responses of external agencies/consultants responding on behalf of their
clients, or academics and industry experts responding for the industry as a whole. Their
opinions were very consistent with marketing practitioners but we were avoiding those
slight cases of a bias that may come from an external perspective.

In comparing these three groups, there were no differences of any significance or

relevance. A few interesting differences to note:

When asked to describe their marketing performance, 56% of marketing practitioners

indicated high effectiveness (either highly effective and efficient, or highly effective but
not efficient). External agencies/consultants were more positive (65% combined
ratings of highly effective) and academics/industry experts were less positive (46%
combined ratings of highly effective).

Agencies were slightly more favorable in the ratings that they expected the sales
organization to provide on marketing performance.

The academic group was less likely to indicate that marketers are using lead quality
objectives or lead definitions with quality screening.

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

PARTICIPANT PROFILE

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Participant Profile
The following charts show the profile of the B2B marketers with lead generation
marketing responsibilities responding to the survey.

Figure 29: Region

In which geographic region is your business based? (n = 272)

Africa, 3%
Central & South Asia,
Other (specify), 4% 4%
East Asia & Pacific,
12%

Europe and Eurasia,

16%

United States & Latin America, 1%

Canada, 58%

Middle East, 2%

Figure 30: Company Size based on Annual Revenue

Approximately how much revenue did your business generate last year (for government and non-
profit groups, please use your expense budget)? (n = 272)

US$5 million to under

US$50 million, 33%
US$50 million or over,
31%

Dont Know, 7%
Less than US$5 million,
29%

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Figure 31: Approach to Selling

Which of the following best describes your companys primary approach to selling? (n = 271)

Sell through in- Sell through direct

person/direct sales, marketing or telesales,
56% 16%

Sell through channel

partners, independent
reps, OEMs, etc., 12%

Sell through our retail

channels, 5%

Other (specify), 4% Sell through external

distributors and/or
retail channels, 7%

Figure 32: Role of Marketing

Which of the following best describes your marketing organizations role within the company?
(n = 272)

Marketing manages
branding and demand
generation and either Marketing manages
an internal or external branding only, 21%
sales force or channel
closes sales, 48%

Marketing manages
demand generation only
Marketing manages (brand managed at
branding, demand corporate level), 12%
generation (including
lead generation), and Dont know, 1%
closing sales, 18%

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Figure 33: Marketing Budget

Approximately how much did your company spend on marketing, advertising and sales activities
in 2007? (n = 272)

Dont know, 12%

US$50 million or more,

3%

US$5 million to under

US$50 million, 11%
Less than US$1 million,
51%

US$1 million to under

US$5 million, 24%

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B-to-B Lead Generation:
Marketing ROI & Performance Evaluation Study

Contact Information

MarketingProfs Research Insights

MarketingProfs, LLC

[email protected]

Copyright 2008. MarketingProfs Research Insights,

MarketingProfs, LLC. All rights reserved.

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