Answering the question, “How many MQLs do we need?”

A data driven marketing plan needs to start by answering the question, “How many MQLs do we need?”

Although it can be calculated with straightforward arithmetic, ambiguity around some of the details has thwarted many a marketing team, so let’s walk through it.

Here’s the assumptions that you’ll need – for each product line x country or geographic region.

  • Revenue Target – If it’s a high growth business, you could calculate each month with the appropriate # of leading months based on the average sales cycle. Alternatively if you are planning this annually you could take the monthly average over a 12-month plan.
  • Makeup of Business By – Here’s where this can either get complex or stay simple. Marketing and Sales will want to agree where the source of business is expected to come from these sources, or all that apply to your go-to-market strategy:
  • Net New Customers (Inbound / Marketing Programs)
  • Net New Customers (Outbound) …. Worth splitting out for two reasons – conversion rates and deal size will likely vary, and the responsibility for generating the business will likely vary vs. Inbound/Marketing Programs.
  • Existing Customers
  • Cross Sell (e.g. from other product lines)
  • Partner Driven Deals

For each of the above you will want to then have these assumptions:

  • Average order value (based on how the above number split this will then allow you to calculate # of wins you need over the time frame)
  • Win Rate (this will then allow you to calculate # of opportunities you need)
  • MQL-to-Opportunity conversion rate (this will then allow  you to calculate the number of MQLs)

The next step is then taking your MQL target and building a bottoms-up MQL plan.