6 Top B2B marketing KPIs to ensure ROI-positive customer generation

5 min read
Published on
11 Jan 2022
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Measuring marketing performance is the most crucial phase in your marketing plan. You can have the best marketing plan but in the absence of clearly defined key performance indicators (KPIs), you won’t be able to measure marketing performance.

A quick litmus test, albeit a slightly uncomfortable one, is asking if your marketing initiatives can fail. For them to be a profitable ROI success, the inverse must also be a possibility: that they can fall short of quantitative customer generation. These are the KPI’s against which to measure your marketing efforts.

Marketing has evolved significantly in the past few years. Technological advancements, a shift in digital marketing, and knowledge economy have increased the need (and possibility) for tracking B2B marketing KPIs to attribute conversions and sales to the right marketing channels and touch points.

One of the most notable shifts as a byproduct of digital is the need to move fast and test and iterate. Entire marketing campaigns used to be built around a single phrase. This phrase would help build ‘brand’ and awareness.

Building brand is still important, but the idea of having a phrase that has been crafted over weeks by a creative team is outdated. A more modern and direct response approach needs to be scalable and optimizable.

B2B marketing KPIs help you understand what marketing campaigns and activities work best and which ones don’t. This article covers the top B2B marketing KPIs that you must use to prove marketing ROI.

But first…

What is a B2B Marketing KPI?

A key performance indicator (KPI) is a value that measures how effectively a business is achieving its objectives and goals. KPIs used to measure B2B marketing objectives such as lead generation, customer acquisition, etc. are known as B2B marketing KPIs.

These are standard well-defined marketing KPIs that show you and help align teams around what success looks like for your business. When you create a marketing campaign, identifying the most relevant KPIs will help you measure performance, compare different campaigns, and identify the ones that outperform.

Here is how KPIs work:

It is essential to identify the right B2B marketing KPIs for your business that measures profitability and growth. It’s a data driven age and the amount of distractions in the form of other metrics can be alluring. Forget about all of them except the 6 below and you will be in good shape. Get these right first.

Core B2B marketing KPIs

These are the 6 core marketing KPIs that are a pillar for successful ROI-positive growth. There is no reason not to have these. You are burning money if you cannot make informed marketing decisions around the numbers below.

Here is a list of the top B2B marketing KPIs:

  1. Marketing qualified leads
  2. Sales qualified leads
  3. Lead quality
  4. Conversion rate source
  5. Quarterly CPL
  6. Cost per acquisition

1. Marketing Qualified Leads

A marketing qualified lead (MQL) is a lead that has shown interest in your business and falls into the category of what you have defined as your ideal customer. These are the leads that have completed a specific action (e.g., submitting a form, downloading a lead magnet, subscribing to your newsletter, etc.) which shows they have an interest in the value your company provides to solve their pain or problem.

The reason why these are called marketing qualified leads is that the initial action or micro-conversion is based on a marketing effort. Remember ‘direct response marketing’ as we mentioned above? These visitors are in the early stages of the buyer journey: awareness and education.

[Replace with buyer journey stages, and then a sales and marketing overlap]

Not all leads that your marketing campaigns generate are MQLs. The buyer journey is far less linear than it used to be and individuals are not locked into a single path towards purchase. They will enter and leave at different stages.

A lot of leads, the ones that are not your ideal customers, will quickly drop off before later stages of the buyer journey such as consideration. The leads that are most likely continue and need their problems solved and ultimately become customers are filtered as MQLs.  Having a clear distinction between leads and MQLs is a key B2B marketing KPI that you must track:

Identifying MQLs helps you stay focused on the most profitable opportunities. Determine the cost per MQL per campaign and you can identify campaigns that generate more MQLs at a significantly low cost.

2. Sales Qualified Leads

A sales qualified lead (SQL) is a prospective customer who is ready to be converted into an active customer by your sales team. Ideally there is an understanding by both marketing and sales as to what exactly happens before engagement with sales.

These leads are in later stages of the buyer journey: evaluation and rationalization. It is up to sales to engage after they have solved many of their own problems already. SQLs have shown significant interest in buying a product or service from your company.

Here is an example of the events that could move a lead from MQL to SQL:

It’s important to map a buyer journey and deeply understand your customer because you need to find what can be most optimized for your company. Don’t fall into the trap where many B2B companies are stuck: simply pushing MQL to the sales team without any further thought of revenue attribution.

So, what makes SQL an important B2B marketing KPI?

Campaigns and marketing channels that generate a high number of SQLs and have a short MQL to SQL path can be easily identified if your business clearly defines SQLs. Within the buyer journey there may be several paths to satisfy all of the stages, you want to remove friction and optimize the amount of sales appointments you generate.

3. Lead Quality

Lead quality is a critical B2B marketing KPI that you must track. Most businesses are more concerned about the quantity of the leads and often ignore lead quality. What’s more important than lead quantity is the quality of the leads you are generating from the marketing efforts.

Lead quality determines the likelihood of a lead to become a paying customer. Here is how the lead quality compares with lead quantity:

Let’s consider a hypothetical situation:

You are running two marketing campaigns. Campaign #1 generated 2,000 leads while Campaign #2 generated 140 leads. At this stage, Campaign #1 seems to be ideal and outperformed Campaign #2 by some big numbers.

However, further analysis reveals that Campaign #1 generated 33 sales while Campaign #2 converted 125 (out of 140 leads) into customers.

If you are only looking at the number of leads, or other even softer metrics like impressions or shares, you are ill positioned to increase profitability. The lead quality and likelihood of a lead to becoming a paying customer is what matters the most. Start tracking lead quality as it is a top priority of 68% B2B professionals.

Lead quality can be measured by a lead’s closing potential or revenue potential. Both these features are available with any modern CRM software.

4. Conversion Rate Source

Conversion rate is perhaps the most crucial KPI that plays a significant role in proving marketing ROI. One thing that businesses often miss is the conversion rate source.

You can track and measure conversion rate in two different ways:

  1. Attribute conversion rate to marketing campaigns
  2. Attribute conversion rate to marketing channel or source.

The conversion rate source is often the missing piece of the puzzle. Social media, for example, might not perform well for your business and might be a poor conversion rate source. While organic search might be one of the best conversion rate sources based on lead quality, MQL, and SQL.

However, finding the exact conversion rate source requires using attribution modeling and you need to pick the right model for your business. An attribution model is used to credit a sale or conversion to the most appropriate touchpoint.

The path to conversion isn’t linear. A potential customer might interact with your business across different touch points before conversion. How  you identify and credit each touchpoint (or source) for conversion is the key.

Here is an example of a customer journey:

In this case, the customer has interacted with your business via four known touch points before becoming a customer. Identifying and crediting the conversion rate source in such situations is complicated.

Thanks to Google Analytics that has solved attribution-related problems by defining built-in models:

You can easily set up these attribution models in Google Analytics to credit conversion sources appropriately. This will help find the sources with the highest conversion rates.

I will echo my sentiment from the introduction. Especially when diving into attribution models the most important thing is capture the essential data and not add complexity until you are making informed decisions based on source and channel.

5. Quarterly CPL

Cost per lead (CPL) shows how much a single lead costs you. Quarterly CPL gives you a broader picture of cost per lead and how it has changed over time.

You can calculate CPL using this formula:

The total marketing spent and the leads generated from this marketing activity are the two variables that you must have to calculate CPL.

Here is the formula for quarterly CPL:

Quarterly CPL = Total amount spent on marketing in the quarter / Total leads generated in the quarter

This B2B marketing KPI works best when you want to compare quarterly CPLs and want to know how the cost has fluctuated based on your marketing campaigns and techniques.

6. Cost Per Acquisition

Cost per acquisition or customer (CPA) refers to the total cost of acquiring a new paying customer. If you know how much it costs to acquire a new paying customer, you can allocate the marketing budget effectively.

Here is how to calculate cost per acquisition:

It requires two variables:

  1. Total amount spent on marketing (agency fees + ad spend)
  2. Total attributed conversions.

You can calculate CPA for different marketing campaigns and individual sources too. The attributed conversions refer to the conversions that are attributed to the source or campaign.

For example, if you want to calculate CPA for a guest post. You'll need to calculate the total amount spent on the guest post (tools used, content writing, editing, outreach, etc.) and then you'll need to find the total number of conversions generated by this guest post.

This is where you'll need conversion rate source and attribution models to accurately attribute conversions to the right channels and sources.

Needless to say, you can’t find accurate CPA if you don’t have any data on the conversion rate source. And if you don’t know conversion rate by source then you are setting marketing dollars on fire.

Measure What Matters

These top B2B marketing KPIs are the backbone of your marketing strategy. As soon as you implement them and build a BI dashboard you will understand your baseline figures.

Good things start to happen when you can prove marketing ROI, attribute conversions and sales, and measure lead quality. These are the KPIs that focus on customer generation, and therefore, are the key drivers of new revenue.

Here’s to more profitable marketing and new customers.

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