Category Archives: CRM

The 10 Best Marketing Key Performance Indicators

John Wanamaker

Perhaps the best we can do with measuring the performance or ROMI (return on marketing investment) is to employ the age old statement made by John Wanamaker more than 90 years ago, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”.  We like to think we can do better with modern tools like marketing automation integrated to CRM, the ubiquitous spreadsheet with pivot tables, etc.  Sure, we can attribute a closed opportunity to a marketing campaign or to a type of marketing activity, but it’s only as good as a person’s interpretation.  At some point, someone has to decide how to attribute a closed opportunity.  If the last touch before a closed opportunity was a trade show, does that mean the revenue should be associated with the trade show?  In this modern age of buying behavior, we can never really know, nor should we try, to attribute revenue to one particular source.  Thus, are we back to a modern version of Wanamaker’s interpretation?

This is not to say we should not bother to measure.  Rather than basing decisions on a hard core revenue attribution model, I suggest marketers rely on trends and benchmarks.  These are my top 10 marketing key performance indicators (KPIs) for evaluating the performance of marketing strategy and tactics.  Note the first 5 are meant to be the metrics you use when presenting results to the external (external to the marketing team) stakeholders.  The second 5 are meant to be used internal to the marketing team in evaluating activities, promotions, events, campaigns, etc.

  1. Net Contribution.  This is the best measure of effectiveness.  Do not mistake net contribution for an absolute ROMI.  It is a perfect measure of efficiency and the trend tells the CMO how the overall strategy and tactics are driving revenue.    Net Contribution (%) = [(sales revenue – COGS) – (cost of sales+marketing)] / [sales revenue]
  2. Marketing Contribution to New Opportunities.  Again, not an absolute measure, but useful as a month-to-month benchmark.  Also good for talking points with the Executive Team.
  3. Marketing Contribution to Closed-Won Opportunities.  A great benchmark.  Look for trends. Could also be correlated with other specific marketing metrics like impressions, emails sent, etc. to indicate general effectiveness of the marketing activities.
  4. Revenue per Marketing Qualified Lead (MQL).  Always couch your stakeholder facing metrics as revenue as compared to cost. Think about how your CEO or CFO perceives the Marketing function based on reporting revenue per lead or cost per lead.
  5. Number of MQLs.  The net number of leads passed to Sales is, of course, an important measure of success for the marketing strategy and tactics.
  6. Cost per Click (CPC).  This is the best measure to compare any of the myriad marketing digital activities to each other.  After a while, you’ll be able to reject activities that don’t meet your benchmark and do more of those that exceed your benchmark.
  7. Cost per Thousand Exposures (CPM).  This is a good measure to determine reach.  Cost per click and cost per thousand exposures should be considered together when evaluating the results of activities.
  8. Click through Rate (CTR).  Another good benchmark for comparing the effectiveness of materials and venues.  The CPC, CPM and CRT together help the marketer make decisions about effectiveness.
  9. Funnel conversion metrics.  MQL to SAL to SQO to Closed/Won and other relevant conversions.
  10. Revenue/Cost per attendee.  These are good specifics for evaluating the effectiveness of events like trade shows, conferences or seminars.  Be cautious of making binding decisions based only on these metrics. There are likely to be intangibles that should be considered such as the sales person’s opportunity to see multiple customers and prospects in a short span of time.
Naturally, your particular business or organization may require different metrics depending on what you are selling.  For example, those firms that are selling subscription services may track annual contract value and churn rate.
Let me know what you think about my top 10 marketing Key Performance Indicators.  I’d love to hear your feedback via comments or feel free to send me an email.

The Absence of Good Lead Management in the B2B World

One would think that lead management in the B2B business world was ubiquitous.  As a Modern Marketer, I think that everyone certainly must be using a marketing automation system, a CRM system, automatic lead hand-off, lead nurturing, lead scoring, and monitoring the conversion points of a traditional funnel; suspect – MQL – SAL – SQL – Closed or Won – nurture – cultivate.  I’m thinking, how could anyone miss this with all the buzz over the past 5 years. 

But, it is not so.  According to the latest Marketing Sherpa B2B Benchmark Report, only 24% of all B2B marketers are using a marketing automation system.  Of those 24% only 30% are using the high ROI lead management tactics of lead scoring, lead nurturing or basic lead funnel management.  Even more astounding is that the Marketing Sherpa survey shows that companies using lead scoring see a 77% improvement in lead generation ROI and a 79% improvement for those using lead nurturing.  So the obvious question is, “why aren’t more B2B firms capitalizing on this powerful technology?”

I am an avid superuser of the Eloqua platform and have been using these high ROI lead management tactics for 3 years now with demonstrated strong revenue growth results due in large part to these and other automation strategy and tactics.  I’ve spent hundreds of hours learning the platform and it has not been easy to learn how to fully leverage this marketing automation platform.  Most marketing departments are under-resourced, over-worked and under-appreciated with little time to spend learning how to use a new technology.  Unfortunately, having the time to learn how to use a marketing automation technology is a luxury in most B2B organizations.  I suspect this is the reason for the low adoption rate of such a powerful tool.

On the flip side, for those organizations with Modern Marketers who are willing and able to learn this technology, you can take a huge advantage over your competitors who are not able or willing to use the technology.

For you CEOs and CFOs out there who view your marketing department as an expense, it’s time to break out of this 20th century paradigm.  A properly established marketing department is your revenue engine!  At the risk of sounding pompous, using the lead management tools of a marketing automation system, I could take any B2B firm in the 76% who are not using automation or any of the 70% not fully leveraging automation and add an additional 10% to their top line within 12 months (assuming support from the C-suite).  I’ve done it and I know it works.  If you’re one of the laggards not using or not fully leveraging lead management tools, time to get busy!  Take the reins and make it happen.  There’s plenty of research available to help you to make the business case to your executive management team.

My recommendation is to invest in your marketing team, build a revenue engine, give them the time and money to gain the education and purchase the tools of marketing automation.  Don’t be one of the laggards not using this powerful tool.  I’m quite passionate about fully leveraging marketing automation and making marketing the revenue engine.  Send me an email if  you would like to discuss further.