A recent LinkedIn post on the difficulty of marketing metrics in B2B got me thinking. In our work with clients (many of them B2Bs), measuring marketing activity is critical. Not just because we need to be more accountable for where the investment is going, but to validate the critical role marketing plays as a strategic pillar for B2B organisations.
Given many B2Bs contend with long, complex sales cycles involving multiple decision makers, Sales (quite rightly) often leads the charge, leaving Marketing feeling like the poor cousin.
So how do marketers take their rightful seat at the table and stand alongside their sales counterparts in driving strategic growth?
Talk in the language of business. I know that’s easier said than done.
Keeping a pulse on the key metrics which marketing can influence, and the executive team respects, is a great place to start.
I’d love to give you an easy checklist of metrics that apply to all B2Bs, but I’m sorry to tell you it doesn’t exist (B2B marketing isn’t easy!). So instead, here are some principles to abide by.
1. Time and cost to convert
Building a model which helps you understand the time taken from contact acquisition (the first time you become aware of a new contact via sales or marketing channels) to customer conversion helps to provide a benchmark you can set some marketing goals against. Then you can test activities and channels to reduce that time.
This can be a difficult one to measure if you don’t have connected CRM and marketing platforms, but it’s a worthy exercise. Try asking yourself these questions:
- Do contacts acquired through some sources convert more quickly than others? We know that referrals are key for B2B, but what of all the other sales and marketing channels you invest in?
- What about the cost? Go deeper by understanding the cost of acquisition across different sources and the average value of those customers. This information helps you make informed decisions on where to invest in the future. How appealing is that trade show looking now?!
- What actions or activities (or combination of these) can help to reduce the time and cost to convert? Looking at your marketing arsenal across the entire customer journey helps you switch on and off activity at specific times and have a more targeted approach to the marketing channels you use and when.
2. Lifetime value and share of wallet
Making friends with the analytics team (or whoever has access to customer spending data in your organisation) will pay off here. This data is typically available, but sometimes difficult to source and consolidate in a way that makes it useful.
Share of wallet is often a common metric for account-based marketing, to focus on becoming more embedded in a target organisation. Understanding how widespread your service or product offering is within the existing client base helps you determine what to market to them for cross-selling opportunities.
Lifetime value is very important as it helps support potential revenue forecast and benchmark the maximum or desired cost per acquisition the business is willing to invest. If the lifetime value is $500,000, the merits of spending a little more on acquisition are stronger than if based on the value of an initial sale of say $50,000. Of course, you need some good metrics to help you determine the likelihood of achieving the planned lifetime value – which is where targeted marketing then becomes important.
3. Growth in marketable audience
Typically, lead generation is the focus. But if you think a few steps ahead of this, what marketers should be tracking is the growth in a marketable audience. Some of these may become leads, and others not. But in the world of B2B, building an audience of influence who you may be able to nurture into customers or others who may advocate for you, is important.
Play the long game. More in the top of your funnel means more will come out the other end whilst your influence grows, so you should be spending efforts on growing a strong audience who you can market to over time.
4. MQLs or lead indicators (qualified leads delivered by marketing)
So, you’ve acquired known contacts into your database. Now you need to look at the rate of moving those contacts through to becoming marketing qualified leads (MQLs), for sales to ultimately determine if they are in fact sales opportunities.
The first step is agreeing with sales what criteria you use to define a MQL. Communication and transparency are key so marketing can be on the same page as sales when passing along potential opportunities. Getting feedback on those opportunities then enables marketing to make adjustments over time to continually improve the quality of MQLs, so sales can be more efficient, spending their time on the contacts likely to convert.
And making sales more efficient is an objective most executives will endorse!