Senior Marketing and Business Development Strategist
I value metrics of all kinds and can be quite the measurement freak. I sometimes fall into that dark place where I look at numbers and create tables and Salesforce.com dashboards until I have no idea of the date or time of day.
It is important in marketing to understand results of the activities that contribute to brand recognition, lead development and loyalty. Yet time is limited and B2B so often has more to accomplish than their small marketing departments can handle. So, what do we measure that will help us deliver results that gets marketers on the same team as sales?
Simply put, guide your metrics to deliver what will make sales look good—aka “meet the numbers.” In marketing planning, work backwards from what sales is accountable for, to stay targeted on delivering what is needed to reach their goals. But to do this well, you need to know seven core metrics. With these metrics in place and regularly recalculated for accuracy, you and your sales team will join forces like The Avengers – ready to take on your market together.
- Sales Goal: The total sales expected for the year. (Sounds elementary, but sometimes marketing isn’t told, nor do they think to ask…)
- Contribution from New Business: The percentage of the sales goal expected to come from new business (as opposed to support fees, customer renewals, ongoing subscription revenue, etc.)
- Median Sale $: What is the typical sale worth? Calculate this using the past year’s data. Update the number at least once a year. Use median rather than average to make the number more realistic, eliminating outliers from skewing results up or down.
- Close rate: Percentage of all opportunities (sales touched these deals) that actually result in new customers. Again, calculate over the past year and recalculate every year.
- Nurture to Opportunity Rate: Percentage of leads that are converted to opportunities or how many leads are qualified and actually enter the sales pipeline as real possibilities for new business. Yep, calculate this over the past year and recalculate every year.
- Median Response Rate/Inquiry Rate: The median rate of response from all marketing efforts or the percentage of leads that result from marketing efforts. If you don’t have the median, use the average, but median will make your number more accurate. You guessed it, calculate and recalculate annually.
- Budget: How much money do you have available to work your market (dedicated to campaigns or lead generation efforts)? Include measurable, response-oriented demand generation marketing activity budget here only. Exclude budget dollars for branding activities, public relations, and other important activities that impact demand generation campaigns.
At CommuniTech, we see executives trying to understand why marketing dollars are being spent yet sales still struggle; they come to us for help aligning efforts. In B2B, marketing is often perceived as a cost center instead of being part of the “sales” profit center. The more we realize that our sales people are our sales channel, like a retailer is to a direct-to-consumer product, the greater our chance of achieving superhero harmony.
Okay, now what do you do with these seven metrics? Well, some will have work to do if you aren’t using a customer relationship management (CRM) or consistently tracking activity to calculate these numbers. But if you have them ready, be sure to RSS feed this blog, as in future soon to come I’ll share a simple table that will help you put these metrics to work.