5 Marketing KPIs Firms Should Measure
Tracking your Marketing Key Performance Indicators (KPIs) is critical if you want a return on your marketing investment and ultimately driving profitable sales. Getting to know your B2B and B2C marketing breakthroughs and failures can help align future investments with what’s most effective.
Unfortunately, CEOs & Owners of small to medium sized businesses don’t have the time to do so. Hiring a seasoned, external team like from Pivotal Move with both Sales and Marketing experience in the Professional Services sector is often a great way to improve overall Marketing ROI.
There are 16 KPIs that your marketing team should report at least monthly. Following is more context on each of these KPI’s.
- Sales Growth
- Leads
- Lifetime Value of a Customer (LTV)
- Cost of Customer Acquisition (COCA)
- Sales Team Response Time
… plus… - Other KPIs that may be important to your B2B firm.
1. Sales Growth
Ultimately, the best way to evaluate your marketing’s success is by measuring its growth in profitable sales revenue. Once you start measuring your marketing’s effect on sales growth, it will initially take some marketing adjustment to eliminate the many activities you’ve inherited that do not drive sales and then to shift investments to what works. In addition to the short term financial reward, measuring your sales growth serves as a good indicator for identification of overall strategic growth trends.
Reviewing your sales revenue with key members of your team often instills a shared ownership and reinforces that everyone is driving towards the same end goals.
2. Leads
It’s a numbers game. The more leads you get the more sales opportunities you have available to choose from and the more sales opportunities you can pursue to improve your chances of sales growth.
The importance of leads to a marketing and sales department goes without saying. However, not all leads are equal.
Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs) are used by the marketing industry. In simple terms, they represent different lifecycle stages of the same lead.
A marketing qualified lead (MQL) is a lead scored more likely to become a customer compared to other leads based on insights from that lead. MQLs are those prospects who have volunteered themselves as interested or more deeply engaged but not yet pursued as a sales opportunity.
A Sales Qualified Lead (SQL) is one that your sales team has accepted as worthy of a direct sales follow up. SQLs on the other hand have been vetted much further and indicate a prospect that is ready to make a decision.
Understanding the synergy between both MQLs and SQLs is vital toward understanding your company’s Leads to Close ratio—which is the number of leads you’ve received over a specific period of time divided by the actual amount of leads you’ve closed.
Having a strong internal or external leader with both Sales & Marketing experience is key to a strong Lead Management process. See our other blog on Lead Management for more context.
3. Lifetime Value of a Customer (LTV)
What is your customer worth to your business over the lifetime of your relationship? For many in the Professional Services or Technology sector LTV is very important to help pin-pointing ROI drivers. There is no excuse for not to know it.
We breakdown the key components: revenue and gross margin.
Revenue
Revenue in a specified period is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold in that same period.
Gross Margin percentage
Gross Margin is the percentage of total sales revenue that a company keeps as gross profit after deducting the costs directly related to producing the goods or services sold.
Life-time Value of a Customer
The lifetime value of a customer is the total revenue (including all anticipated repeat or on-going revenues) times the Gross Margin percentage. It is key to determine repeating revenues based on your company’s real and actual past data.
4. Cost of Customer Acquisition (COCA)
The cost of customer acquisition is the cost in a period associated in convincing a prospective customer to buy your company’s product or service:
Total Marketing Investment / # of Customers Acquired
The marketing investment includes all money spend on sales and marketing in the chosen period.
Once you have your COCA figured out, you can set goals for how many new customers you want to acquire in a year and then allocate your marketing budget appropriately.
5. Sales Team Response Time
In general, leads receive staggeringly slow responses from sales teams. In fact, in a large US company study the average first response time was just over a week!! Most companies have a big problem here because the quality of a lead degrades very quickly as competition and interests shift position.
So the question is: How fast does your sales team respond to leads? And how fast does your competition’s sales team respond to leads? Once you’ve measured this KPI, you can then go about improving it.
The odds of making a successful contact with a lead can be as much as 100 times greater when a contact attempt occurs within 5 minutes, compared to an hour after the lead was submitted.
6. Other KPIs that may be important
Here are some others KPIs that may be important when the top 5 are in place. We will summarize them very briefly. Please contact us if we may elaborate.
a) Quoted to Closed Customer Ratio
b) MQL to SQL Ratio
c) SQL to Quote Ratio
d) Email Marketing Performance
e) Social Media Reach and Engagement
f) Landing Page Conversions
g) Blog Post Visits
h) Website Traffic
i) Website Traffic to Website Lead Ratio
j) Website Lead to Marketing Qualified Lead (MQL) Ratio
k) Inbound Link Building
Website Traffic to Website Lead Ratio
Of all your website visitors, how many of them convert and become leads?
This KPI is helpful for measuring the quality of your websites traffic and the conversion rate of your website.
Website Lead to Marketing Qualified Lead (MQL) Ratio
Of all the website leads generated, how many get promoted to MQL status?
This metric will help you understand the quality of the
leads your marketing is generating.
MQL to SQL Ratio
Of all your MQL’s, how many get promoted to SQL status?
This metric looks at the cooperation between the marketing team and the sales team.
SQL to Quote Ratio
How effective is your sales team’s ability to move qualified leads down the funnel to the quote/proposal stage?
There are a lot of factors that determine whether or not
an SQL gets quoted (timeline, budget, competition, customization, etc.), and it will be important to
understand and study those factors in order to have better control over them.
Quoted to Closed Customer Ratio
What is your sales team’s close ratio?
Examine all the prospects your sales team quotes and how many end up closing and becoming a customer. Consider what has changed year over year and what can be done to improve.
Website Traffic
How many people visited your site?
They are the potential leads that turn into potential
customers. Try to learn more about them and categorize them into target groups, profiles or personas.
Social Media Reach and Engagement
How effective is your social media strategy?
Social Media Outreach is a huge part of your inbound marketing efforts because it allows you to distribute your content and interact with your current and potential customers. Establish similar metrics for improvement.
Email Marketing Performance
How effective is your email marketing strategy?
Your email marketing strategy is essentially your on-going connection to your prospects and customers, and more central to social media outreach for most businesses.
Every email marketing campaign should be scored and analyzed. Analyzing your email marketing strategy is a bit different however, and includes it’s own set of mini-KPIs that should be reviewed separately.
Inbound Link Building
Do you know how prospect get to your site and are you re-enforcing that following?
Link building should be a cornerstone of your SEO strategy and will help you finding out who prospects are, where they’re from and what they did once they got to your site.
When someone links to your website it means you’re building a following within your given Industry. In turn, that following helps your search rankings and more website traffic.
Landing Page Conversions
How well are your landing pages guiding website visitors into a conversion?
A good way to judge whether or not your landing pages are working is to assess the number of prospects who visit them and the number leading to a conversion (contact forms entered and submitted). The quality of your website, it’s landing pages and Search Engine Optimization are factors in the amount of time prospects stay on your pages and ultimately convert.
Blog Post Visits
Which blog posts are most popular and what do prospects read?
Knowing the performance of your blog posts helps you builds your brand equity and allows you additional opportunities to further create content around what your prospects and customers desire.
Conclusion
Tracking your Marketing KPIs can help validate your marketing investment. Getting to know your marketing successes will enable you to leverage them for more sales. Understanding your marketing failures allows you to fix them. Today, there are many KPI tracking tools available to build more transparency than ever before.
Want to learn more?
