The Critical Role of Throughput Capacity in Your Demand Gen Operations
This is part of our series, the Seven Pillars of B2B Demand Generation Success. In this post we describe Pillar #4, the importance of understanding the throughput capacity of your demand gen engine.
An aspect of the demand generation system where we see many marketing teams stumble is in their ability to measure and model the throughput capacity of the funnel. Understanding throughput capacity is particularly important in the early stages of the lead-to-close process (LCP), where your team must process large volumes of early stage leads. To manage this well, use a throughput model that is connected to your overall Demand Gen system model (as described in our previous post).
Calculating Throughput Capacity
The calculation is straightforward. The key variables are:
- The elements of work performed per rep per unit of time (for BDRs this is typically calls,emails, meetings and then an overhead allowance)
- The number of reps in each position.
A common metric is calls per day, so the formula for calculating the team’s daily capacity is:
Total team calls/day = avg calls/day/rep x # of reps
When you keep an eye on team capacity…you need to make sure the lead gen activities and campaigns are aligned. Feed them less leads and you have wasted resources… too many leads (a seemingly good thing), means that each lead is not getting worked effectively.
For example, the normal range for calls per day for BDRs varies between 60 -100. So, a team of 4 BDRs making an avg of 80 calls/day should process 1600 calls per week or about 6400 per month.
80 calls/day/rep X 4 reps = 1600 calls/day or 6400 calls/month
If you expect an average of 6 calls/lead (a common industry standard), then the team can handle approximately 1000 new leads per month.
6400 calls/month / 6 avg.calls/lead = 1067 leads / month
This helps you determine if you have sufficient throughput capacity given the business goals, and it allows you to manage it on an ongoing basis.
A simple analogy for this is a toll booth. The total cars that can pass through in an hour is the same type of calculation:
Tollbooth math: Total cars/hour = avg cars per lane x # of lanes
Plan for Peaks
Just as highway planners should remember rush hour, you need to plan for the traffic peaks in your demand gen system. Understanding your throughput capacity is a must peak planning. For example, when planning tradeshows that generate thousands of leads in only 3-4 days, you need to assess how the team can process the leads and consider supplementing the team with temporary resources to manage the peaks. In the above scenario, a team of 4 BDRs could effectively work about 1000 leads/month. If you are planning some events that will bring in more than 1000 in a single week, your team will not handle the leads effectively. Back to the toll booth, you need to open more lanes of throughput (add some resources) to maintain the quality of your lead follow-up processes. For more on tradeshows and events, check out our section on managing tradeshows for optimal demand gen performance.
*Bonus Tip* – Inside Sales Productivity Platforms
A platform specifically designed for the inside sales or BDR function, such as SalesLoft or Outreach, is critical to success, particularly as you plan to scale. These platforms make the inside teams much more effective, and automate the capture of key data for management, reporting, analysis. In the context of throughput, these tools allow you to capture the actual throughput of the team and use this as input into your modeling.
Resources / Further Reading
Insight Squared published an excellent in-depth article with guidance for capacity planning for the BDR and Sales teams.
This is part of our series, the Seven Pillars of B2B Demand Generation Success. Here is the full list of posts in this series.
- Codify the Demand Gen System
- Build and Work the Pipeline Model
- Differentiate and Define Roles within the Lead-to-Close Process
- Measure and Know Your Pipeline Throughput Capacity
- Design the Right Incentives – Particularly for New Customer Acquisition
- Enact, Implement & Enforce
- Execute Lead Gen Campaigns with Adherence to Best Practices