B2B Expert Roundup: KPI Marketing

Demand Generation is unique in its benefits and its ability for effective strategies to acquire and retain high-value clients. But for demand generation marketing to work, you have to pay close attention to KPIs and distinguish the most important ones to track from the many that are available.

You see, one can decide to look at engagement metrics like website visits, email opens, and social media likes. But in my experience working with entrepreneurs to improve their marketing, it can be a tricky ordeal.

The funny thing with metrics is that they don’t tell the truth without context. The more surface level your metric is, the higher the chances of being misled. This is why demand generation optimization is about tuning the right knob.

And to be in tune with the actual performance of your demand generation campaign, I suggest you pay attention to two metrics—client acquisition cost (CAC) and client lifetime value (CLV).

The relation between CAC and CLV gives you a guide on how to balance customer acquisition with retention. In simple terms, what would it cost to bring in my customer, how much would they contribute to the profits of my organization in the long term, and what is the difference, i.e. CLV.

So, your CLV over a business relationship of 10 years could be $10,000 or $3,000 depending on your approach to customer acquisition and retention. This is how you fix your demand marketing strategy and set your business and clients on the most profitable and fulfilling path respectively.

Understanding calculations is secondary.

I look at demand generation marketing perhaps differently. At the end of the day, everything we do from a marketing perspective drives demand in some way. Demand generation for my team at net2phone is combined with brand, traditional demand gen, and sales. The KPIs that matter most center around revenue.

Things like conversion from MQL to SQL and closed won conversion from opportunity matter. That influences our direction and quite frankly, future investment in particular strategies among a long list of other things. Our demand marketing team also co-owns sales metrics like monthly recurring revenue (MRR) and average revenue per account (ARPA), along with deal size by unit (for us that’s seats) so we can optimize our efforts to bring in more profitable accounts.

Then we have inbound marketing efforts, so the other half of my team focuses on KPIs related to top of funnel efforts (traffic, bounce rate on our website, SEO) and traffic from third parties we work with, and MQLs. These metrics help us optimize at a more granular level.

Lastly, a KPI we touch on all the time that is not measurable in Salesforce or a graph is communication. All members of our team ask for feedback because communication allows us to improve results on KPIs that drive our business. It may sound cliché, but transparency helps us stay focused and feedback prevents groupthink. We come up with innovative ways to grow.

First and foremost, I think it’s crucial to point out that old-school demand generation and inbound marketing have been outdated for years. Marketers have long held the belief that the success of campaigns they create and launch from scratch hinges on an arbitrary number of leads they receive over a set timeline. For example, maybe you launched a Google display ad campaign that led to 100 eBook downloads on your website in the first month so that must mean the campaign was successful, right?

The problem is that while marketers work hard to get prospects through the door, many don’t fully consider what to do next aside from passing them on to their sales colleagues.

With that being said, the KPIs that truly define the success or failure of a demand generation marketing campaign revolve around creating a fantastic prospect experience from first touch to closed won. It’s all about keeping them engaged with your brand while enhancing their knowledge of and interest in your offering every step of the way. Depending on the complexity and size of your offering, this process could take anywhere from a matter of weeks to a year or longer.

The number of leads collected in a campaign may help to increase the size of your marketing contact database today, but are you doing everything possible to help transform those same leads into viable, net new revenue opportunities for your business a month, six months, or a year from now?

In today’s economy, all efforts must be measurable and contribute to your organization’s bottom line. This includes marketing efforts such as brand awareness, demand generation, and program planning.

The most impactful KPIs are those that affect your pipeline and overall revenue. To track demand marketing performance, we need to look at the full funnel and how prospects progress through it. Each contributing asset should be measured from beginning to end. For example, if 200 prospects download an asset we should be capable of evaluating exactly how that asset contributed to the bottom line revenue and pipeline. We can do this by examining how many of those downloads became a sales accepted lead, how many of those became an opportunity, what the pipeline value is of those opportunities, and so on.

Keep in mind though, that marketing activities are not solely a source for new opportunities, but are also influential on current opportunities. While evaluating net new results from assets, we should also take a look at how many existing contacts or opportunities were affected as well.

If you’re able to see how each demand marketing activity performs all the way through the pipeline and past the surface level of simply contributing “xx” marketing qualified leads, then you’ll be able to see which marketing activities are contributing to your bottom line and help scale your business from a marketing perspective. Marketing KPIs should be closely aligned with revenue KPIs as demand generation marketing should be supporting the revenue team to source and influence pipeline.

At Revalize, we’re working on a roll-up of 14+ brands so, from a lifecycle marketing and content marketing perspective, being able to track what campaigns are having the most impact with each unique audience is extremely important. That’s why I’ve found the most impactful KPIs to be those regarding Pipeline Performance and ROI.

For us measuring Pipeline Performance mainly looks like MQLs per channel, MQL to SQL rate, MQL to Demo rate, and MQL to Opportunity Won rate. When it comes to measuring our ROI per channel, the quality of leads is almost always more important than the quantity. That’s why Pipeline Performance is so important.

Last, but certainly not least, are KPIs that help us continuously optimize our campaigns. I like to think of all of our campaigns as being in a constant state of testing. It’s so important to be able to adapt to the audience’s change in behavior especially when you’re trying to market to varying audiences.

For example, in email marketing you might have an eBook offer that results in a 50% CTOR (click-to-open rate) with one audience and a 15% CTOR with another. Another example is with content marketing: You might publish a blog that has a high number of page views and a low bounce rate in Q1, but by Q4 it could become irrelevant. That’s why it’s so important to look at these granular KPIs frequently—optimization is key.