As the landscape of B2B marketing continues to evolve, a strategy’s effectiveness is measured by more than creativity or intuition – it’s gauged by metrics and key performance indicators (KPIs).
You’ve likely heard the acronym KPI tossed around in business meetings. But how do you know which indicators to track, and do you really need them to scale your company?
Keep reading to learn what a KPI is, which ones to concentrate on and how to use them to elevate your organization’s goals.
KPIs serve as quantifiable metrics to evaluate the performance of marketing efforts and their ability to achieve specific business objectives. They provide valuable insights that allow marketers to track progress, identify pain points and optimize results based on definitive data.
Using KPIs helps you to:
While KPIs vary depending on your business objectives and industry, here are six core metrics every B2B marketer should be tracking:
This shows how much money it takes to convert a potential lead into a customer. It helps business leaders make more informed budgeting decisions.
How to Calculate: Cost of sales and marketing divided by the number of new customers acquired
This compares the gain or loss of an investment to its initial cost to measure profitability. The ratio is usually shown as a percentage and helps assess potential return on business efforts.
How to Calculate: Net return on investment divided by cost of investment x 100%
This represents the total value a customer is expected to generate for a business over the course of the relationship. It provides a better understanding of a customer’s worth to the company beyond the first transaction and helps gauge the long-term profitability of retaining them.
How to Calculate: Customer value x average customer lifespan
This is typically a ratio and measures revenue earned against money spent on the campaign or project. The higher your ROAS, the better your return.
How to Calculate: Revenue gained from campaign divided by cost of campaign x 100
These are prospects who have engaged with your business and the marketing team has determined are more likely to become a customer. This number is important to track because it’s an indicator of how well your marketing efforts are performing.
This is the percentage of customers who complete a specific action, whether that’s downloading an educational asset, signing up for a webinar, filling out a form or even purchasing a product or service. This is another metric that’s helpful for measuring the effectiveness of your strategy.
How to Calculate: Number of conversions divided by total number of visitors x 100
Leverage marketing KPIs effectively with the following strategies:
As you delve into the metrics behind your current operations, remember that it’s more than just figures on a dashboard – they’re the lifeblood of your business. They tell a data-driven story of your company, good and bad, so don’t be surprised to make discoveries that aren’t on your radar at all.
And that’s great for business; even “bad” numbers open the door to uncovering better practices and processes. On the flip side, positive metrics highlight what you excel in and can help position your business more effectively.
Still don’t like what you see or having trouble pinpointing the key marketing KPIs that best support your goals? Connect with marketing experts who can assist every step of the way or tap into more resources to propel your business forward.