I think people are finally coming around to the idea that good marketing requires good measurement. I’ve seen online B2C startups use Dave McClure’s Startup Metrics for Pirates as a starting point for measuring what marketing is doing. For those of us selling to businesses however, particularly where there is a sales team involved and a pipeline to track, the world is quite different and Dave’s metrics don’t cover everything you need to track.
Here’s how I’d construct a basic set of marketing metrics for a B2B startup (and a single slide that I would use to present them):
Think about the goals before you start
The main goal of tracking marketing metrics is to get a measure of ROI or program effectiveness so you can make sure you are spending more and more on things that drive revenue and less and less on things that don’t. A good set of metrics will allow me to predict that if I spend $1 on a certain marketing tactic, I’m likely to get $X of revenue in Y days. A good set of metrics will also give you a feel for inside and outside sales effectiveness and overall sales pipeline velocity as well.
1. Pipeline Measurements
- # of Targets– sometimes referred to as “suspects” this is anyone in the universe who is on the receiving end of your marketing. Sometimes it is helpful to track the number of companies in your universe of targets in addition to the number of individuals, especially when you are targeting a niche and want to track what percentage of that niche you are hitting.
- # of Prospects – these are folks that in some way have indicated they have an interest in your product/service by filling in a form, hitting a sufficient number of pages on your site, attending an event, speaking to someone at your company at a show, etc.
- # of Leads – a lead is a prospect that you have qualified as someone who is a good fit for your product and is likely to purchase a solution like yours in a specific timeframe. For many B2B companies, leads are qualified using BANT criteria (a salesperson will confirm that the prospect has Budget for the project, Authority to make a purchase decision, Needs the product and has a set Timeframe to make a purchase decision).
- # of Opportunities – An opportunity is a lead that is now being actively managed by a sales person and is moving along the pipeline toward either a closed sale or a loss.
- $ Opportunity Pipeline – the dollar value of the opportunity. For long sales cycles, it is important to measure this to estimate marketing ROI for tactics in the short term.
- $ Closed revenue – the actual value of the deal after it has closed.
- % conversion prospects/targets – This shows how many targets took action or showed interest enough to become prospects. This can be effected by the strength of your marketing call to action or offer, the strength of your messaging and the quality of your marketing content for your target market.
- % conversion leads/prospects– This can be an indicator of the quality of your marketing materials in terms of how well it is prompting the right types of prospects to take action. It can also show the effectiveness of your inside sales team.
- % conversion opportunities/leads – This can also be an indicator of how well your marketing materials and tactics are attracting the right types of prospects into your sales funnel. It can also indicate the effectiveness of your salesforce.
2. Timeframes
- Days target to prospect – this will vary depending on your campaign but over time you will be able to track and compare similar tactics to each other.
- Days prospect to lead – for many companies, the inside sales team has a set time within which they must qualify a prospect. Tracking this will show if they are meeting their targets.
- Days lead to opportunity – this is an important metric where you are handing over from an inside sales team that qualifies a lead to an outside sales team that accepts the lead as an opportunity. Any significant gap here needs to be investigated and closed.
- Days opportunity to close – this is important to estimate how long it may take for a given opportunity to result in actual revenue.
3. Costs
- Cost per target – targets can be free (organic traffic, internal lists) or paid (from advertising, purchased lists).
- Cost per prospect – given only a certain percentage of targets become prospects, what is the true cost you are paying for a prospect. This is important to measure and understand especially if you are considering purchasing leads from a 3rd party source.
- Cost per lead – even if you purchase “leads” your own inside sales folks will qualify out many of them. This number will tell you what those those “leads” actually cost.
- Cost per opportunity – This number indicates the marketing spend required to get a lead all the way to the opportunity stage.
- Cost per closed deal – this is the ultimate number representing how much you will spend on marketing to get a closed sale. This number along with the Closed Revenue number will tell you how much revenue you are driving over and above your marketing spend.
Tactic-specific metrics – Obviously there are other metrics you will track depending on the types of programs you are running such as email metrics, website traffic metrics, attendance metrics, etc. Those metrics are also interesting and important to track but can’t be compared across tactics until they hit the pipeline as a prospect, from which point, the above metrics kick in.
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blog post: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
RT @HakanKilic: RT @aprildunford: blog post: Marketing Metrics 101 for #B2B #Startup http://bit.ly/9yLLH7 #prodmgmt – How do you track cross channel costs?
RT @aprildunford: blog post: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
RT @aprildunford: blog post: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
MUST READ RT @aprildunford: blog post: #Marketing #Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
Marketing Metrics 101 for B2B Startups – http://bit.ly/9yTyKC
RT @aprildunford: blog post: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
Great post. About 6 months ago, I started doing a weekly report on these metrics (some are in a quarterly report instead) and together with the VP of Sales it has really helped us hone in on where to focus. It’s cumbersome to get started but once you do, it’s hard to imagine making decisions without that information.
I have discovered that the biggest challenge was not getting the data or producing the reports, but in fact, ensuring data quality was good.
This may seem obvious but companies need to clearly define what is a target, prospect, etc… and ensure the people working with the data (sales and marketing) are updating records consistently and accurately.
Liked the inclusion of timeframe – my reports are not that granular on timeframe at each stage but it may be something I should consider.
Hi Amrita,
That’s a really good point. I’m going through this process right now in that because of our process I can’t pull the data directly from salesforce or our marketing automation tool so we have to do a certain amount by hand which introduces a bunch of inaccurate data. And you are right – the definition of what is what matters a lot. When you have inside sales it’s a bit easier because you can say anything that makes it to inside sales is a prospect and anything that they qualify is a lead.
April
RT @aprildunford: blog post: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
A comment and a question.
One other basic metric I’d add is “Cost per channel” (web, print, tradeshow, etc…) and tie in how many each channel is generating, so you get a ROI by channel as well.
Now the question: There are many ways to allocate the cost of acquisition of a customer across multiple channels – no one prospect or lead really just watches one webinar, but rather sees a website, reads a white paper, visits your community, etc…
I have a couple methods, but what have you seen that works for you to figure out how to split the cost for customer acquisition across channels?
Good post,
-Hakan
http://grandview.rymatech.com
Hi Hakan,
Thanks for the comment. I do this by program/campaign so I can compare email campaigns to pure advertising (for example). As for what happens when the target is responding to multiple campaigns, that’s tricky and it depends on your business. I usually track the first program as the primary lead source. I have tracked secondary or tertiary lead sources where I thought it was important but I usually weighted the primary more than the others.
There are also other thing to think about. For example I’ve seen folks track branded organic searches (where the person came to the site by searching on your company or product name) against a “pr” lead source. It all depends on what programs you are running and how you want to measure the overlap.
April
RT @aprildunford: blog post: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
RT @aprildunford: blog post: Marketing Metrics 101 for #B2B #Startup http://bit.ly/9yLLH7 #prodmgmt – How do you track cross channel costs?
Great understandable post, April. Do your stages correspond directly to your funnel?
Thanks Tim. Yes they do. We obviously have more stages between opportunity and closed but that’s the only difference.
April
RT @jaygoldman: MUST READ RT @aprildunford: blog post: #Marketing #Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
RT @aprildunford: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 Explained. Are you using them?
Blog post Metrics for B2B startups http://bit.ly/9yLLH7 #prodmgmt #b2b #startup
RT @aprildunford: blog post: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 #startup #b2b #prodmgmt
Good read for everyone RT @aprildunford: Blog post Metrics for B2B startups http://bit.ly/9yLLH7 #prodmgmt #b2b #startup
RT @JohnsonTC: RT @aprildunford: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 Explained. Are you using them?
Marketing Metrics 101 for B2B Startups http://ping.fm/r2qsF
RT @aprildunford: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7 (great stuff as usual – DB)
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RT @aprildunford: Marketing Metrics 101 for B2B Startups http://bit.ly/9yLLH7
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