At board level, email opens and click through rates don’t cut it. Sure, they are vital in helping marketing to gain insight as to what is and isn’t effective helping to optimise marketing activity. But at board level – they just don’t stand up to demonstrate marketing value and return, nor act to protect your budget. So what Demand Generation metrics should you focus on?
Let’s say you are given a 10% budget increase, where would it best be spent? And what incremental revenue would you generate? Or maybe more realistically, if you were faced with a 20% budget cut would you be able to fight marketing’s corner and justify the exact negative impact on revenue the cut would cause?
Here are 9 key metrics that you should be measuring and reporting that can help you demonstrate return and value of your marketing activity at board level.
1. Revenue/sales generated
Quite simply, the most important business KPIs. Measurement should demonstrate uplift or increase in sales from activity, especially marketing activity that can be directly attributed. Think direct channels, inbound marketing and cross-sell/up-sell. Whilst not all activity is attributable, many communications and initiatives can be shown to deliver direct revenue and sales.
2. Return-on-investment (ROI)
Knowing how much revenue you have generated is the key KPI, however without knowing the cost to achieved this it is unclear if if offered value. If you are attributing revenue and sales from marketing activity, calculating ROI becomes very straightforward. Activity should be evolved to demonstrate month-on-month improvement of ROI on programmes, not just delivering standalone one-off campaigns.
3. Cost per prospect acquisition (acquisition efficiency analysis)
In order to understand your pipeline and what activity delivers results, visibility is needed on where your new prospects come from and how much they cost. This should be broken down by channel and is vital in showing the short-term pipeline reduction of a budget cut.
4. Close rate per channel
In order to place a true value on an acquired prospect, end-to-end understanding is needed on drop-off and close rates by channel. Whilst there may be many additional touches throughout nurturing before sale, and probably across different channels and multiple influencers within the buying unit – sources should still be attributed to identify appropriate allocation of resources for future activity.
5. Sales velocity
How quickly are you converting newly acquired prospects to customers? In order to enhance the effectiveness of nurturing activity, sales velocity should be monitored with the aim of month-on-month improvement. For complex lengthy buying processes, reporting could be further broken down to show velocity through stages of the buyer journey to identify priority areas for investment to accelerate this.
6. Buyer journey conversion
Just like sales velocity can be broken down into speed through each stage of the buyer journey, so can conversion rates. By accurately mapping your buyer journey and delivering a programme that moves buyers along this, you can identify stages of high drop-out or bottlenecks. Content and communications can be developed to improve performance and deliver incremental programme gains.
7. Paid vs. organic prospect acquisition (and customer percentage)
Long-term efficiency is usually delivered through organic inbound activity. What percentage of your prospect pipeline was organically generated? You should aim to transition this balance to be dominated by organic channels with paid acting to stimulate short-term pipeline lows and key focuses. Tracking the source through to customers and even spend help validate channels and areas of future spend to determine where resource is best spent.
8. Organic reach (search and social)
Just like organic prospect acquisition, organic reach should be monitored with the aim of month-on-month increases in reach. By increasing organic search and social traffic it is likely your business will be moving to a more sustainable model with lower acquisition costs and enhanced ROI.
9. Revenue growth from existing customers
How effective are your cross-sell/up-sell programmes? Growing revenue and long-term customer value is key to delivering business efficiency. These transactions and conversations are no longer exclusive for just sales, marketing should be proactive and collaborative in them. Existing customer programmes are typically low touch, long running and achieve incremental revenue at far lower cost than through new customer acquisition. Reporting on customer spend prior to programme launch, and then additional spend post launch offers insight into the effectiveness, value and ultimately ROI of the programme.
Traditional marketing metrics should be used to better understand the audience: what messages engage, call to action effectiveness, community engagement, optimal times for activity and conversion. These should act as benchmarks to improve performance and as a source of customer insight. But within your business, many of these do not carry a monetary or revenue value. As a result, do different business units, seniors and board members view these as delivering real business value?
Effective Demand Generation metrics should be built around demonstrating and improving revenue on marketing activity. Amongst internal stakeholders these talks the language of business, not just marketing. They justify and protect your budget, and ultimately demonstrate the revenue and value you deliver to the business – in terms that the overall business understands.
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