Are You Underestimating Marketing’s Influence On Revenue?

Published: September 30, 2016

Kevin JoyceWhat is your mental picture of the marketing/sales funnel? If you see a single funnel with prospects dropping in the top and revenue popping out the bottom, your vision is distorted.

This image clearly underestimates marketing’s influence on the sales funnel:

icon Lead Management 1

Revenue marketers are responsible for creating and nurturing two funnels in the pipeline:

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  1. A funnel for newly acquired leads as they glide down the funnel to Sales Qualified Lead (SQL) stardom and become a sales opportunity with dollars attached.
  2. A funnel for contacts attached to existing accounts in the CRM system, who may have been SQLs before. These contacts may or may not be current customers, but at any moment could be nurtured by marketing to becoming hot leads once again.

The Right Picture

Many companies implement a lead management process and design funnel reporting around only No. 1 above. They completely forget that funnel No. 2 is also a source of SQLs.

A lead management process for No. 1 will have all the typical stage values from “new” to “marketing qualified” and onto “sales qualified.” At this point, the lead in your CRM system is converted into a contact and attached to an account, and marketing gets credit for producing one more SQL. But that is not the end of the story. No. 1 is only the customer acquisition funnel.

LM Image

A missing part in many lead management processes and in funnel metrics is No. 2, the customer expansion funnel. I know that not all contacts are customers, but for simplicity, let’s just call it the customer expansion funnel for now. So what happens if that SQL we just converted ends up being a closed-lost opportunity, or better yet, a closed-won deal? Does marketing move on, never to market to them again? Of course not. But the CRM system does not make it easy to return the contact/account to the lead state, nor would we want to. However, we do want to acknowledge that it is valuable for marketing to continue to nurture these contacts and ultimately to get them ready for sales attention one more time.

When these contacts become ready again for sales interaction because of marketing nurturing programs, marketing deserves credit for this. That means we need some way to tally up the SQLs that are produced monthly in the customer acquisition funnel and in the customer expansion funnel. In technical terms, we want to count how many leads transitioned to SQL status and how many contacts transitioned to SQL status per month.

Measuring The Contact Funnel

To measure the number of SQLs produced from contacts, we have to set up contact status values similar to those we use for leads. We probably don’t need to copy the lead status values of raw, new or engaged contacts, but we will need values such as nurture, MQL, SAL and SQL. We will need to set up reports in a CRM to track the contact status transitions just as we did for the leads. Some organizations like using identical status values for both leads and contacts, but are uncomfortable calling a contact a “Sales Qualified Lead” (SQL). So one way out of this is to drop the “L” from all the status values — MQs, SQs, etc.

Stop Selling Yourself Short

If you are only measuring the customer acquisition funnel then you’re grossly underestimating marketing’s influence on pipeline and revenue. To get an accurate gauge of marketing’s contribution, you must also measure the customer expansion funnel — marketing’s influence on known contacts and customers in your database.

Kevin Joyce, VP of Marketing Strategy for The Pedowitz Group, is a marketing executive with 34 years of experience in high tech. During the past 16 years, he has worked with many companies on their revenue marketing and demand generation strategies, including IBM, Unicru and Rubicon Marketing Group. Connect with Kevin on LinkedIn or via email at

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