Demand Generation Vs. Lead Generation: 6 Questions You Need To Ask

By Aaron Mandelbaum

Quite often when lead generation appears to be the identified source problem, the root cause is actually the generation of demand. Understanding how you are generating demand, and at what rate the inquiries that your demand generation activity is converting, is essential.

If we work backwards from the end sales goals of a $100M quota of net new business, and apply a 20% opportunity to close rate, with an average deal size of $100k, you will need to generate 5,000 opportunities in order to achieve quota.

1. Do you know what your opportunity to close conversion rate is?

Now, lets say that your lead to opportunity conversion rate is 20%. In order to generate the 5,000 opportunities that you need to make your quota, you must generate 25,000 leads.

2. Do you know what your lead to opportunity conversion rate is?

Now, lets say that your inquiry to lead conversion rate is 20%. In order to generate the 25,000 leads that you will need to achieve your quota, 125,000 inquiries will need to be generated as well.

3. Do you know what your inquiry to lead conversion rate is?

Once you have determined the number of inquiries you will need to acheive your forecasted quota, (#4) what are the sources that you are going to receive these inquiries from and where are your marketing dollars being spent?

• Cold Calling
• Email Marketing
• LinkedIn
• PPC Advertising
• Blog
• Organic traffic to your website
• Twitter
• Facebook
• Webinars
• Tradeshows

5. At what rate are each of your lead sources converting?

6. How many inquiries are being generated per marketing dollar spent?

When you can answer those 6 key questions you will have a much better understanding of what current state looks like within your Demand Generation activities, as well as your Lead Source Effectiveness

The realized results can impact the level of quota attainment, sales compensation plans, and not to mention a more accurate spend of marketing dollars that will lead to a far greater return on every dollar being spent.

Fix your perceived Lead Generation problem by implementing a sound Demand Generation strategy and accurate assessment of your Lead Source Effectiveness.