Spend more than 20 minutes with a B2B marketer and you will inevitably end up speaking about metrics. Marketers are constantly looking to measure the impact of their craft and gain a better understanding of overall performance.
While we certainly should take the steps to measure marketing performance, many of the metrics being tracked today are meaningless. Why? Because there is simply no context behind them and metrics on their own provide no insights to the business. As marketers continue to improve and mature, we must analyze the right metrics to better inform us and enable better decision-making.
If you are currently tracking the following metrics, think about what insights they provide, and consider that---without the proper context---metrics are meaningless.
Cost per Lead
Many marketers have become obsessed with trying to drive down their overall cost per qualified lead. (Keep in mind that a lead is not a name that has been received via web form.) However, the cost per lead should always be compared to the average sales price.
One organization that I worked with was concerned that they were paying close to $300 per qualified lead. However, their concern was unfounded after some analysis showed that they had a 6-9 month sales cycle and an Average Sales Price of $75,000. Spending $300 to get a truly qualified lead to sales was a bargain. The company had a 35% close rate---meaning that for every $900 spent on generating three qualified leads, they were realizing $75k for an 830% ROI. Not bad!
If you are going to measure the cost per lead for your organization, be sure to do it with the backdrop of average sales price and length of sales cycle. Then you will be able to properly benchmark and have the necessary information to determine if you really are paying too much.
Number of Dials
I met with a director of an Inside Lead Development team that was discussing his team’s efficiency. His proof point was the number of dials made per day to responses via inbound marketing. However, when a closer look was applied, the metrics showed less than 1% of these responses were converting to sales opportunities. Quite the disconnect in proving effectiveness!
While telemarketing continues to be a very viable tactic to engage potential buyers, be sure you are focusing and compensating on the right thing. The number of dials made by a telemarketer means nothing; talk time and rate of connection can show faulty metrics. The more appropriate metric would be number of accepted leads and leads converted to opportunities after a call happens. If you want a true read on how effective your tele-lead qualification team is, shift your metrics and compensation accordingly. Dials are not the right metrics to measure.
Number of Leads Generated
This one is sure to get me burned at the stake for heresy! Every marketer should be measuring the number of leads generated---that is one of the biggest goals of marketing year in and year out, right? Well, sort of... but stay with me here.
Too many marketing departments set off on a path of generating leads without a clear vision of how many qualified leads they need to generate to help sales achieve or overachieve quota. This understanding is crucial. Without it, marketing does not understand the real goal or have any the ability to know if they are being successful.
The key is to develop a lead planning process whereby marketing and sales work collaboratively to determine what the targets should be. Beginning with the revenue targets, you should be working backwards to determine the number of deals needed (knowing the ASP and Sales Win Rate is also vital to this exercise), number of Sales Qualified Leads, Sales Accepted, Qualified Leads and Valid Responses. This not only provides targets at each stage, it allows marketing and sales to measure against this number and align around a single goal. Having this process in place is the only way to provide meaning to the number of leads generated.
Number of Impressions, Clicks and Opens
These three metrics are every email marketer’s staple---the holy grail of metrics! Even now organizations run reports on clicks and opens and impressions or web visits. While those can be a top line indicator of engagement, without a deeper look into if those that are clicking are the right buyers these metrics mean nothing.
If you are simply measuring these baseline metrics, be sure to tie them back to opportunities to determine if you are engaging the right audience. You must also look downstream to see if all your top-line activity is contributing to pipeline. If it is not, you need to readjust your focus as impressions, clicks and opens aren’t indicating anything other than engagement.
During one of the most contentious sales presentations I have ever given, a vice president of Marketing sat back and asked quite aggressively, “Do you even understand just how many contacts we generate each and every month?” Knowing that I could risk losing the deal answering this, I responded, “I’m sure there is a whole lot, but do you know if these are the right contacts?”
This conversation then led into a great discussion about the need for data segmentation and understanding your buyer. We discussed the potential of actually decreasing the size of their database due to the fact that many of the names that they had were never going to buy from them and were not the right targets.
When discussing the database, size does matter, but bigger does not always mean better. Be sure you have done the work to segment your data based on your ideal account and buyer profiles/personas, and be very targeted. You will get much better results.
As marketers, we are told every day that we are what we measure. There is some truth in that statement. However, the metrics have to count, too. Make sure you provide the right context to your measurements, so they give a view into the business and produce the value and insights you need. Otherwise, you have meaningless metrics... and those don’t help drive revenue!
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