B2B marketers are obsessed with measuring metrics.
I get it because I’m in your shoes. We want to track our progress, optimize our campaigns, and show that our marketing programs work.
But this pursuit of metrics can also lead to focusing on the wrong ones.
For example, measuring vanity metrics can make you feel good, but they don’t help you figure out what to do next.
To answer your question, vanity metrics include the likes of social content, social followers, the total number of website visitors (with no reference to traffic sources or relevancy), and the list goes on.
Ego is a hard thing to feed.
So, what are the metrics you need to live by?
It all comes down to being a revenue-first marketer.
That is how you prove your marketing team’s value to your company – by showing how marketing contributes to the bottom line.
And I know many CMOs struggle to find the right metrics that will earn them credibility, especially when 80% of CEOs don’t trust the efforts of their marketing teams.
Optimizing for revenue-related metrics will help you move away from the outdated lead generation playbook and adapt to the way people create meaningful relationships and ultimately buy B2B products/services today.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 all the five revenue-related metrics you have to measure.
So, let’s dive into them now.
1. Direct-sourced revenue
Revenue generated as a result of marketing activities (in this context, marketing-influenced revenue should be your secondary metric).
In your attribution reports, you can analyze the revenue source and identify the inbound marketing opportunities that converted into paying customers (and compare it to the total revenue generated).
2. Qualified pipeline generated / SQOs (Sales Qualified Opportunities)
Your marketing-sourced pipeline refers to the qualified opportunities with a probability greater than 20% of becoming customers.
Similar to the direct-sourced revenue, you can see the number of marketing-sourced SQLs that have converted into qualified pipeline and calculate the conversion rate from SQLs to SQOs.
3. Sales win rate
This rate is the percentage of opportunities that closed and became customers, divided by the total number of opportunities in your pipeline.
4. Sales cycle length
The time it takes for leads to move through the sales pipeline until they become customers.
You will experience a shorter sales cycle if your marketing efforts are geared 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 specific time period.
In order to calculate it, you have to figure out your average marketing/sales cycle.
Change your marketing mindset
Optimizing for metrics that matter will make you a better marketer.
Here’s why.
Most B2B companies don’t have the patience to do the actual marketing and force marketers to hit leads/MQLs quotas.
So they focus on collecting as many leads as possible, resulting in low-quality leads with low or no buying intent. The thing is that marketers can easily manipulate these numbers as their company sets a higher number of leads bar.
But these leads don’t drive business results.
Simply put, lead generation prioritizes quantity over quality and negatively impacts your revenue-related metrics.
Instead, you want to build your brand (your reputation), establish trust, and create demand by educating your audiences at scale about the problem you solve, the product/solution you offer, and your strategic narrative, so they’ll consider you when the time is right.
With this buyer-centric mindset, quality leads will be a natural outcome and not an end goal, and your revenue-related metrics will shine.
Don’t let attribution reports trick you
When you create demand in awareness channels, many of the touchpoints with your audiences that lead to B2B purchases can’t be measured: organic social, podcasts, online events, community, word of mouth, earned PR, Youtube videos, etc.
In turn, these efforts will increase direct traffic (a traffic source that is overlooked as a marketing win) and organic traffic (in particular branded search terms), and bring in new customers.
Yes, your attribution reports will NOT show these efforts in awareness channels as revenue sources, but they’ll show up as direct or organic channels-sourced revenue.
But as marketers, we have to do the things that are most effective, bearing in mind the causation even if we can’t show the direct correlation.
Now is the time…
…to change your marketing mindset and step into the demand generation and brand marketing game to drive real business results.
If you rely only on lead generation, you’ve already lost the battle to companies that adapt their marketing to how buyers buy B2B products/services.
When your marketing efforts are geared toward demand generation and brand marketing, rather than lead generation, you will see higher revenue contribution, increased SQOs and sales win rates, shorter sales cycles, and lower CAC.
And think about this: as long as you hit your numbers, you’ll gain more trust and credibility and be able to do more of the brand marketing.
Life is too short for doing marketing that isn’t making an impact on revenue.