About six months ago, our sales and marketing teams at AdStage formed a strategic "smarketing" unit. It all began with a separate Slack channel and grew into a bi-weekly offline meeting where we discussed incoming leads, content, and events. We wanted to collaborate closer to acquire better-qualified leads and sell more and faster.

This "smarketing" project had us bump heads with sales quite a bit. We disagreed on ways to automate the follow-up drip campaigns and even how we should pronounce the word "smarketing." (SHmarketing is no longer an option.)

But as we explored the boundaries of our sales-marketing relationship, we found that we must align our objectives and how we measured our performance. Below, we've gathered ten lead generation metrics that both marketing and sales must know and understand to work as a team.

What it means: % of revenue in the sales pipeline (opportunities) that came from marketing efforts.

This metric tracks how many opportunities the marketing department contributes to the pipeline. It’s a good measure of the marketing team’s success. If marketing is responsible for most of the sales pipeline, it might also suggest that your outbound prospecting is underperforming.

2. Marketing % of contribution to closed revenue

What it means: % of revenue in closed-won deals that originated from marketing efforts.

This metric show the effectiveness of the marketing team’s efforts, and how it impacts the company’s revenue (vs. opportunities). It’s particularly relevant today when CMOs are under a lot of pressure to prove the ROI for marketing expenses. To assign revenue dollars to marketing touches, businesses must connect sales and marketing data with closed-loop reporting.

3. Quantity of Sales Qualified Leads (SQLs)

What it means: the number of SQLs sent over to your sales team.

Sales Qualified Leads (SQLs) are prospective customers that are deemed worthy of a follow-up by the sales team. These are prospects who might have engaged with your deeper-funnel content or requested a demo. Depending on the company, the qualification criteria may include company size, budget, or the contact’s seniority level in the company.

4. Quality of Sales Qualified Leads (SQLs)

What it means: % of SQLs not rejected by sales.

High quality leads speed up your sales cycle and improve the bottom line. That means your sales reps will spend less time on each contact, reducing the total cost per lead while increasing revenue. Depending on your business, lead quality can be determined by budget size, need, interest and expectations, or potential deal size.

5. Cost per lead

What it means: total campaign costs/quantity of leads.

The cost per lead metric reflects the cost efficiency of your lead generation program. Cost per lead data helps understand how much money the marketing team currently spends on acquiring new leads. Marketers use this metric to monitor campaigns, plan new ones, and calculate your return on marketing investment.

6. MQL to SQL

What it means: Conversion from Marketing Qualified Leads to Sales Qualified Leads.

This metric shows the rate at which marketing qualified leads (MQLs) convert into sales qualified leads (SQLs). An MQL is a lead that your marketing team considers likely to turn into sale. They may have requested a white paper but didn’t ask to be contacted, or visited your website several times to look at the product and pricing page. In contrast, an SQL is a lead that has been researched and vetted. Comparing this ratio by lead source (e.g., webinars, events, lead lists, email campaigns, etc.) will help the marketing team understand which channels work best.

The “qualification” stage technically means that sales reps are acknowledging that the leads meet certain criteria.

7. SQL to Opportunity

What it means: Conversion from SQL to Opportunity

An opportunity is a contact that is actively interacting with sales and shows potential for becoming a customer. If your SQL to Opportunity rate is high, your smarketing team has done a great job at establishing qualification criteria. If it’s low, perhaps you need to reevaluate these criteria or extend your lead nurturing program.

8. Opportunity to win

What it means: Conversion from Opportunity to customer (win).

Tracking this metric will help you measure your sales reps’ performance. If this metric is low, it could be that the sales reps need additional training. Or, perhaps, you’re selling to the wrong buyer persona. It could also be that the product offering fails to compete on the market.

9. Average Deal Size

What it means: the average dollar amount per closed deal or contract.

Businesses need to track this metric to be able to back-calculate how many deals they need to have at each stage of their funnel. This allows them to project revenue, measure business health, and forecast future growth.

10. Revenue

What it means: How much money the company is making

This metric helps measure the profitability of a company. It’s the lifeblood of any business and the single most important metric to track for any smarketing team. The easiest way to calculate it is to sum all the revenue you get from your paying customers per month (MRR) and year (ARR).

Align sales and marketing teams through shared metrics

The relationship between sales and marketing has been a subject of too many jokes in the B2B community, but this is changing. Smarketing has become the company's revenue center. For both sales and marketing, working together as one team is the only way to align messaging with the sales process, which ultimately leads to a better buying experience. But to reap the best benefits of this collaboration, marketing and sales must share common objectives and have full transparency about their performance metrics.