In business-to-business (B2B) environments, the primary role of marketing is to generate leads for the sales division. CEOs need to keep a watchful eye on the top marketing metrics as these contribute directly to the achievement of top-line revenue.
With the introduction of marketing automation and the rise of the web, the landscape of how marketers operate has changed dramatically. The single greatest asset that has risen from this new landscape is marketing metrics. Marketers no longer have to rely upon gut instinct or judgment to assess campaign effectiveness as multitudes of easily accessible metrics are available.
CEOs need to manage specific metrics that demonstrate delivery effectiveness and return-on-investment; and not be overwhelmed with too many metrics that are now produced within software packages.
Let’s look at each of the marketing metrics that are critical measures:
Top Marketing Metric #1 – Total leads generated
As a CEO, you want snapshot data that will allow you to appraise the effectiveness of your business units and the execution of your business strategy. One of the most important metrics that marketing should be accountable for is the number of leads generated. This statistic alone is not sufficient to measure their true performance, but in their absence, all else becomes irrelevant. The measurement of this metric allows for the calculation of more sophisticated reporting.
Top Marketing Metric #2 – Total qualified leads as a ratio to buyer personas
Buyer personas are part of the current inbound marketing methodology. Buyer personas are fictional representations of an ideal customer or customer segment that are generalised into homogenous groups. They allow for highly targeted marketing communications that, when executed correctly, allow for greater efficiency in marketing’s targeting of potential customers.
This metric provides you with a snapshot of how effective your marketing department’s strategy is in reaching your target market. It should be expressed as a ratio of leads to buyer personas. If your marketing department is consistently providing a high proportion of leads that match your ideal buyer personas, you know that their efforts have been well-targeted.
Top Marketing Metric #3 – Marketing spend vs. cost of lead generation
Now that we have appraised the targeting effectiveness of marketing’s efforts, they should now express this to you in dollar terms. The simplest way to present this figure is to sum the total effective leads and express them as a proportion of the total marketing budget. Non-performing leads should be stripped from this calculation so that marketing budgets are benchmarked across performing leads.
Top Marketing Metric #4 – Marketing to sales closing ratios
Closing ratios are the colloquial ‘proof in the pudding’ and allow you to identify if there is a problem with marketing, sales, or both. It is the proportion of leads provided to sales that have been won. To calculate this metric, marketing should tally the number of leads provided to sales and then minus these from the amount of won new business. This can then be presented as a conversion rate. Via this process, marketing can present the true cost of leads. Poor conversion rates are the ‘canary in the coal mine’, often alerting you to systemic problems in either marketing planning or sales force effectiveness.
Top Marketing Metric #5 – Marketing spend vs. cost of customer acquisition
This metric illustrates customer acquisition costs. This figure is the accurate cost after inefficiencies from marketing and sales have been removed. From this figure, you will be able to appreciate what the marketing budget should be to gain a predetermined amount of new business.
If you would like to discuss how to improve marketing effectiveness and results, please contact our office.
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