Hot Takes

What’s a good framework to define what a good deal/lead is?

Marketing Revenue Sales

One of the conversations I’ve had more frequently in my professional journey is “how do you define what’s a good lead/deal”?

It’s really interesting to observe that most companies struggle in this area, they don’t really have a mental framework for it, tend to use anecdotal information until very late in their lifecycle stage and as a consequence create friction/misalignment that could be very much avoided and that ends up slowing growth down instead, in some cases putting the company as a whole at existential risk even.

The organizations that try and solve this, most of the time apply a qualitative approach that over time evolves into a quantitative one.

Here’s the twist tho: the best ones? They usually do both.

The qualitative angle of the framework is really a 2X2 matrix where on one axis you have “fit” as a criterion (as defined by the match with your current definition of ‘Ideal Customer Profile’ or ICP), while on the other axis you have “activity” as a criterion (as defined by the increasing activity on your online properties). That will define four macro quadrants.

Each quadrant can then be quantitatively measured across four dimensions themselves based on:

  1. Volume
  2. Value
  3. Velocity
  4. Conversion

Here’s the kicker: getting 25% more leads is not necessarily interesting if they close twice as slow, at 30% lower ACV/ARPA, or with a 50% worse conversion rate.