How do you rank lead sources and adjust your budget allocation accordingly by channel?

We track our spend and pipeline influence (multi-touch pipeline attribution by marketing activity) and by marketing channel to determine the pipeline ROI. We can then extrapolate bookings ROI by applying our win rate to understand which marketing channels are most effective in generating pipeline and revenue for the company.

Given the complexity of the B2B buying cycle, this is not an easy question to answer. Each lead source has a role to play in the buyer's journey and it is important to track the lead source with the right lens. Below is a five-step process that has worked well for me.

1. Define a baseline, track and monitor channel metrics, funnel metrics, and ROI of your paid media channels.   

   • Paid Search and Paid Social 

     • Channel metrics: 

       • Ad CTR 

       • Landing page conversion rate 

       • CPL 

     • Funnel metrics: 

       • MQLs  

       • MQL conversion rate

       • SQLs

       • SQL conversion rate

       • Pipeline sourced and influenced

     • Channel ROI: Pipe to spend ratio or ARR to spend ratio

   • Direct Mail 

     • Channel metrics: Items delivered, engagement 

     • Funnel metrics: Pipeline influenced 

     • Channel ROI: Pipe to spend ratio  

   • Trade shows and industry events

     • Channel metrics Registrations, attendance, and meetings booked

     • Funnel metrics: MQLs, SQLs, pipeline sourced and influenced

     • Channel ROI: Pipe to spend ratio  

   • User conferences

     • Channel metrics Registrations, attendance, and meetings booked

     • Funnel metrics: MQLs, pipeline sourced and influenced

     • Channel ROI: Pipe to spend ratio  

2. Continuously experiment and optimize every channel to improve efficiency 
   

3. Keep the business objective in mind. Some channels, such as paid social, work well in driving top-of-funnel MQLs, whereas other channels, such as paid search, lean more towards bottom-funnel demo/pricing MQLs that are more ready to buy. Webinars and email nurture help with converting MQLs to SQLs 

4. Rank the sources based on business objectives and ROI and adjust as needed

5. Keep an eye out for new sources and experiment to see if they work out!

It depends entirely on your marketing objectives. If your primary goal is lead generation, then lead volume is a key metric. You'd want to identify which channels are driving the highest volume of leads—perhaps it's Google Ads, YouTube, or a specific social media platform. However, volume alone isn't enough. The next critical question is which of those channels are delivering the most valuable leads, meaning the ones that ultimately convert into users or paying customers.

If your focus is more on brand awareness or a highly targeted strategy like Account-Based Marketing (ABM), you'll want to prioritize reach and engagement. Which channels are exposing your brand to the largest and most relevant audience (or accounts), and which ones are generating the most interaction?

A balanced approach to ranking lead sources considers the long-term impact. Instead of simply looking at initial touch points, consider which sources are driving the most signups, regardless of the initial landing page. This requires solid tracking of referrers and UTM parameters to attribute sign-ups to their original source.

Finally, I'd caution against ranking lead sources solely based on cost or Cost Per Lead. While cost is a factor, it's not always directly correlated with lead quality. A high-volume, low-cost channel might generate a lot of leads, but if those leads aren't converting, it's useless.

The first step in ranking demand generation lead sources is understanding what success looks like. What KPIs are you using to evaluate the channel (e.g., conversion rate)?

Once you have established how you will measure success, I recommend setting up tracking and reporting to support ongoing analysis. This is not a “set it and forget it” process. You should constantly evaluate performance and shift the budget allocation accordingly based on what’s working and what is not working. Furthermore, you should consider segmenting the data to better understand the performance.

This should be a recurring exercise for budget allocation. This will allow you to utilize the budget in a smarter way.