Whatever funds you allocate for marketing your business, it’s for naught unless you measure the progress of your marketing initiatives. It’s this process – measuring and evaluating your B2B marketing key performance indicators (KPIs) that will help you keep pace with your business goals.
The key here is B2B marketing KPIs. Far too many B2B companies are measuring the results of their marketing efforts with B2C marketing KPIs. There is a difference, so if that’s been your approach, it does not work!
Here’s what you need to know about B2B marketing KPIs and how to get the most out of your campaigns.
What Are B2B Marketing KPIs?
Marketing KPIs are measurable metrics that help you determine if your marketing efforts are yielding the desired results.
In other words, marketing KPIs provide you with a fair idea about whether your business’ marketing initiatives are on the right path to meet your business goals. However, depending on your industry, different businesses can have different B2B marketing KPIs.
The Subtle Difference Between B2B Marketing KPIs and Metrics
Even though the terms “B2B marketing KPIs” and “B2B marketing metrics” are often used synonymously, there’s a thin line of difference between both terms. A critical point to remember is that while all marketing KPIs are metrics, the vice-versa is not true. KPIs are the most important metrics businesses should use to track the progress of their marketing campaigns. Not only this but KPIs are linked to specific time periods.
Some of the most commonly used B2B marketing KPIs are:
- Cost per customer/acquisition
- Customer attrition rate
- Customer retention rate
- Customer lifetime value (LTV)
- Number of new customers acquired
- Return on investment (ROI) for advertising spend
How to Choose Marketing KPIs For Your Business
Planning and shortlisting a set of B2B marketing KPIs can be a tricky affair. You should only look at one word here: “key.” Each performance indicator you pick should be critical to your business goals. Here are a few questions to consider while choosing KPIs to measure the success of your marketing initiatives:
- What are the goals of your marketing campaigns?
- How do you plan to use the KPIs for improvement?
- How can KPIs impact your business goals?
Use the SMART Method to Determine Your B2B Marketing KPIs
One of the most effective strategies for using your B2B marketing KPIs is the SMART method, which you’ve undoubtedly heard before. According to this method, your KPIs should be:
As much as possible, ensure that your KPIs are precise so you can measure them easily.
It’s fine to be ambitious while choosing your marketing KPIs, but remember that the defined goals are achievable and relevant only to your business. Also, ensure you have strict timelines to keep your marketing function focused. There’s no set criteria or a fixed number for selecting the B2B marketing KPIs.
5 B2B Marketing KPIs To Measure
Here are five B2B marketing KPIs to track to assess the performance of your B2B marketing efforts:
The most critical marketing KPI is the conversion rate as it reflects the effectiveness of your marketing initiatives. It also measures the audience that has shown interest in your products/services.
You can measure the conversion rate from:
- Online ads
- Contact forms
- Social media follows/shares
- Downloadable resources
- Blog posts
Cost Per Lead
The cost per lead is the average price your company has to pay for acquiring every new customer. You can use this quick formula to measure the cost per lead for your business:
Cost Per Lead = Total spend/Number of leads
The total spend is the sum of different spends, such as:
- Software cost
- Ad spend
- Creative cost
You can also calculate the cost per lead for individual channels, such as B2B lead generation through your business’ website.
Customer Lifetime Value
The customer lifetime value can be used to determine the lifetime value of your average customer. By measuring this, you can do a better, more accurate job of planning your marketing budget.
You can use this quick formula to measure the customer lifetime value:
LTV = Customer Value x Average Customer Lifespan
To determine the customer value, you can use the following formula:
Customer Value = Average Purchase Value x Average Purchase Frequency
Organic traffic can provide you with insights about your search engine optimization (SEO) strategy. 45% of B2B companies are investing over $20,000 in SEO every month. Organic traffic is free traffic to your website, mostly driven by search engines. It can also help you assess the ranking of your website on search engines, such as Google.
Return on Investment (ROI)
The ROI can help you determine the financial performance of your advertising and marketing efforts. Here’s a quick formula to calculate the ROI of your B2B marketing initiatives:
ROI = (Net Profit / Total Investment) x 100
With all the measuring you will do, be prepared: you’ll find that not every marketing campaign will generate the results you’re after. That’s OK. By tracking your activities, you’ll be on your way to improving the performance of your future campaigns.