B2B marketers are obsessed with measuring metrics.
I understand because I am in your shoes. We want to track our progress, optimize our campaigns and show that our marketing programs are working.
But this quest for metrics can also lead to focusing on the bad ones.
For example, measuring vanity metrics may make you feel good, but they don’t help you know what to do next.
To answer your question, vanity metrics include social content, social followers, total website visitors (without reference to traffic sources or relevance), and the list goes on.
The ego is a difficult thing to feed.
So what are the metrics you need for a living?
It all comes down to being a revenue driven marketer.
This is how you prove the value of your marketing team to your business – by showing how marketing contributes to profitability.
And I know that many CMOs struggle to find the right metrics to gain credibility, especially when 80% of CEOs don’t trust the efforts of their marketing teams.
Optimizing revenue related metrics will help you move away from the outdated lead generation manual and adapt to how people build meaningful relationships and ultimately buy B2B products / services today.
Measure the metrics that really matter
By focusing on demand generation and brand marketing (rather than lead generation), you’ll improve on the five revenue metrics you need to measure.
So, let’s dive into it now.
1. Direct source income
Revenue generated as a result of marketing activities (in this context, revenue influenced by marketing should be your secondary metric).
In your attribution reports, you can analyze the source of revenue and identify inbound marketing opportunities that have converted to paying customers (and compare them to the total revenue generated).
2. Qualified pipeline generated / SQO (Sales Qualified Opportunities)
Your marketing pipeline refers to qualified opportunities with a greater than 20% probability of becoming customers.
Similar to direct source revenue, you can see the number of marketing source SQL that has been converted to qualified pipeline and calculate the conversion rate from SQL to SQO.
3. Sales success rate
This rate is the percentage of opportunities that were closed and became customers, divided by the total number of opportunities in your pipeline.
4. Length of the sales cycle
The time it takes for prospects to move through the sales pipeline until they become customers.
You will experience a shorter sales cycle if your marketing efforts are directed in the right direction.
5. CAC (Customer Acquisition Cost)
Your CAC is the total sales and marketing costs required to acquire a new customer over a given period.
To calculate it, you need to determine your average marketing / sales cycle.
Change your marketing mindset
Optimizing the metrics that matter will make you a better marketer.
Most B2B companies don’t have the patience to do actual marketing and force marketers to meet lead / MQL quotas.
So they focus on collecting as many leads as possible, resulting in low quality leads with little or no purchase intention. The point is, marketers can easily manipulate these numbers because their business sets a higher number of lead bars.
But these leads do not generate business results.
Simply put, lead generation prioritizes quantity over quality and negatively impacts your revenue metrics.
Instead, you want to build your brand (your reputation), establish trust, and create demand by educating your large-scale audience about the problem you are solving, the product / solution you are offering, and your strategic narrative, so let them consider you when the time is right.
With this buyer-centric mindset, quality leads will be a natural outcome, not an end goal, and your revenue metrics will shine.
Don’t let attribution reports fool you
When you create demand in awareness channels, there are many touchpoints with your audiences that lead to B2B purchases that cannot be measured: organic social, podcasts, online events, community, word of mouth, earned public relations, Youtube videos, etc.
In turn, these efforts will increase direct traffic (a source of traffic that is overlooked as a marketing gain) and organic traffic (especially branded search terms), and attract new customers.
Yes, your attribution reports will NOT show these efforts in awareness channels as a revenue stream, but they will show as revenue from direct or organic channels.
But as marketers, we have to do the things that are most effective, keeping causation in mind even though we can’t show direct correlation.
The time has come…
… To change your marketing mindset and step into the demand generation and brand marketing game to drive real business results.
If you rely solely on lead generation, you’ve already lost the battle with companies tailoring their marketing to the way buyers buy B2B products / services.
When your marketing efforts are focused on demand generation and brand marketing, rather than lead generation, you will see higher revenue contribution, increased SQOs and sales success rates, Shorter sales cycles and lower CAC.
And think about this: As long as you hit your numbers, you’ll gain confidence and credibility and be able to do more brand marketing.
Life is too short to do marketing that doesn’t impact income.