What are marketing KPIs and why do they matter?
Marketing KPIs or marketing key performance indicators are essential, strategic tools that track marketing investment.
Made up of metrics and measures, marketing KPIs add value to the numbers generated to tell you how close (or how far away) from your wider business goals as defined in your business plan you really are. In this sense, marketing KPIs are comparable to a guide or compass, helping your company to stay on course and aiding the decision-making process.
Choosing the right KPIs for your marketing campaigns is therefore vital; track the wrong KPIs or get lost in metrics and your business is likely to spend both time and money planning, implementing and analysing a marketing activity that will not deliver results.
To help you navigate the tide of marketing KPIs, Think Beyond’s expert marketeers have put together their 6 essential marketing KPIs for B2B business growth below.
If you’d like to discuss your marketing strategy with a member of the Think Beyond team, call 01625 682110 for a no obligation consultation.
B2B marketing performance indicator essentials
1. Sales revenue
Money matters – do you know how much revenue your marketing campaigns have generated?
Being able to track revenue across your inbound and outbound marketing is the first step towards determining marketing efficacy. No business owner or director wants to spend money on a campaign that doesn’t have a clear revenue value.
2. Website traffic to lead ratio
Capturing usable leads is essential. Your business could spend vital time and budget on paid ads, SEO and content production to drive visitors to your site but if these visitors do not convert to leads then you must address your landing page(s).
Although website traffic to lead ratio will vary by industry, a rate below 2-4% is indicative that it’s time to make CRO (conversion rate optimisation) a business priority.
3. Cost per lead
By dividing the cost of generating leads by total leads acquired, your business can quickly determine which marketing channels and campaigns offer the most cost-effective return in terms of generating new leads.
This marketing KPI should never be overlooked: a high cost per lead could quickly become dangerous to your company’s financial health. Furthermore, a high cost per lead and low traffic to lead ratio could spell disaster.
4. Customer lifetime value
How do your customers contribute to your profitability? Track your prospects from first interaction to determine which marketing channels, campaigns, content and lead nurture strategies work to create the most valuable prospects for your business.
Use these insights as a planning tool for your future marketing to positively impact both acquisition costs and customer retention figures.
5. Inbound marketing ROI
Whereas sales revenue indicates that marketing is generating cash flow; inbound marketing ROI (MROI) determines how effective your campaigns are. By analysing which individual strategies offer the best return, your business can quickly identify where additional investment would be beneficial and where budgets need to be adjusted.
6. MQL to SQL ratio
The ratio between MQL (marketing qualified leads) and SQL (sales qualified leads) is arguably one of the best ways to determine lead quality.
Calculated by dividing the total number of sales qualified leads by the number of marketing qualified leads in a given period, a high MQL to SQL ratio indicates that your marketing team is able to screen leads and attract your ideal customer to produce a quality pipeline.
What metrics matter to your business?
The above “super 6” marketing performance indicators represent the tip of the KPI iceberg.
There are many more performance indicators that your business could track, and arguably, should track. The typically long purchase cycle in the B2B sector dictates that time could also be devoted to indicators such as lead to MQL rate and quote to close rate. Similarly, with multiple decision makers and an increased focus on social proof with the B2B sector, social media KPIs are often added into the mix.
How then should a business decide which KPIs matter?
Choosing the right performance indicators for your business must first start with accurate data. How do you track customer interactions? Have you identified your sales funnel? What do customer journeys look like? Without this groundwork in place, determining KPIs such as customer lifetime value is impossible.
The right KPIs for your business must also relate to your wider business goals. All too often, senior teams conflate measures with KPIs and get lost in vanity metrics. For example, measures such as the number of social media followers or page views may offer positive reporting but should not be confused as KPIs as they don’t impact upon business aims or provide strategic, decision making insights.
How a consultant can help take your marketing performance further
Partnering with a business consultant is one way to ensure that the KPIs you have in place are what matter most to your business. As industry experts with knowledge of best practice, a consultant can help you to get to grips with your data, your strategy and your marketing performance.
Think Beyond is a Cheshire-based marketing management consultancy operating in Alderley Edge and Wilmslow. Our range of strategy services includes the delivery of marketing KPI dashboards, creating a singular location to monitor marketing activities across digital, paid and online channels. Coupled with our key insights and recommendations, our marketing dashboards aid business leaders in making data-based decisions to move both their marketing and their profits forward.
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