By Stephanie Carrillo, Senior Marketing Consultant at Heinz Marketing

It is typical for companies to be given a marketing budget before setting sales goals for the year. According to the article B2B Budget Benchmarks: how much should you be spending on average 9-10% of the company’s annual revenue is allocated towards marketing efforts. But often, when I work with clients, I see a big disconnect between the sales goal and the ability to drive enough lead volume to meet the sales goal with the marketing budget allocated.


To avoid missing your sales goals, Marketing Managers must track your baseline benchmarks across marketing channels and measure the percentage of leads moving to the next stage in your lead and opportunity stages.  At a minimum, I recommend monitoring lead>opportunity and opportunity>close won rate.   If your organization is not tracking your funnel metrics, I recommend investing in a marketing automation platform, where you can develop your lead and opportunity stages and track your marketing efforts.  I find Hubspot offers the most robust reporting for marketers over other platforms.

Forecasting Sales Leads

One can approach forecasting in several different ways; I like to start by understanding how many leads I must drive to meet my goal, and then evaluate my marketing mix to determine any gaps.

Let us start by doing some necessary calculations to determine how many leads your marketing campaign must generate. Take your benchmarks from the lead stages to determine the number of leads needed at each step of the funnel to meet your goal. If you do not have a way to track past performance, at Heinz Marketing, we use a conservative average to start: 5% lead to opportunity and 20% opportunity to closed-won. However, to sharpen your forecast, using your data is preferred.

In this example, the marketing goal is to drive 100 new sales this year. Based on my calculation, I will need to generate 10,000 leads.

Example Lead Forecast

Forecasting Marketing Channel Mix

Once I know my lead volume, I then start to look at my current marketing mix and channel benchmarks to determine if my budget can support the lead volume needed to achieve my goals.  To level-set, I never start this exercise by thinking I am going to improve my campaign performance by XYZ; I look at it straight on with the assumption of the status quo. I then build out my forecast based on several scenarios; in those scenarios, I can build out situations where I add new targets for channel improvements, such as CTR or conversion improvement, or build new scripts that add or remove marketing channels.

Based on the benchmarks I outlined in my previous blog post, you should know the channel share of leads driven for each channel and the average cost-per-lead for those channels. Based on your benchmark information and other standard metrics, you can reverse engineer and forecast the budget needed to generate the lead volume. Often, it is not until this step; marketing has a real understanding if they can meet sales goals. Nevertheless, many companies are short staffed and benchmarking, and forecasting is often a missed step, due to more immediate priorities.

Step 1:  Determine lead volume by channel

  • Total leads Needed X Channel Share %
  • 10,000 X 31% = 3,194 Paid Search leads

Step 2: Determine ad spend based on the cost-per-lead benchmark

  • Cost-per-lead for channel X forecasted number of leads for channel
  • $200 X 3,194= $638,888.89 ad spend for Paid Search

Step 3: Total the ad spend across all channels to determine if you have enough budget to meet your sales goals.

Setting Marketing Expectations with Leadership

Based on your results, you will want to share this information with leadership. If your data shows that you can deliver on sales goals based on historical performance, it will put everyone at ease. But if your data shows a significant deficit, you must share the discrepancy early on to level-set expectations.

When your forecast is falling short, then you need to identify what channels are not efficient and determine if adjustments to the marketing mix can make up for the shortfalls. Go back to your benchmarks to find areas to improve and research new channels. Use an excel document to create multiple scenarios to see where you can adjust and make up the lead volume.

Above all, when speaking with leadership, always arm yourself with information. If sales goals are out of reach, show them why, and then show them the different scenarios and what you recommend for improving the outlook or where to find a middle ground for setting new goals to align with the budget allocated properly. Always arm yourself with data and use the data to paint the picture of where you are at, and what you think needs to be done to get your organization closer to making the goals leadership has set.

Good luck and let me know if you find this information helpful!