Did you know that 73% of executives don't believe that marketing drives awareness or revenue?
They also believe that marketers are not focused enough on results to drive incremental growth.
My observation is that most companies seem to have a pretty good handle on the sales function of their operating model. They track things like appointments, meetings, orders, and conversion rates in their CRM (Customer Relationship Management) systems, and it is not too hard to determine the small handful of activity, effectiveness and outcome measures that are the key driver of performance in this function.
However, when it comes to the marketing function, clients are less forthcoming when it comes to sharing their current measures with me. Their marketing teams are busy building websites, creating collateral, organizing events, developing advertisements, posting on social media and writing articles. Marketing staff seem to love creating things, but some teams can be “resistant” to having their performance measured, or what they are currently measuring I would not consider to be the right KPIs.
Fortunately, the increasing prevalence of digital marketing platforms is making the marketing function much more quantifiable than it was in the past.
If you’re new to KPIs, I recommend taking a quick read of some of my previous blogs about KPIs first:
- What is a KPI (key performance indicator)?
- The benefits of having the right KPIs (Key Performance Indicators)
While you still need to choose the right KPIs that drive the performance of your marketing team and operating model, here is a list of 5 KPIs that are commonly used by our clients, and a brief explanation of each:
Webpage Conversion Rate
This is a measure of the effectiveness of your online marketing messages and brand collateral. It calculates the percentage of visitors to a web page who respond to your call to action (CTA) by taking the desired action (e.g. they fill out a form, subscribe to your blog, download a whitepaper, request a demonstration etc).
Net New Subscribers
Hopefully, you are building a database of target market prospects who have opted-in to receive information from you; and you are publishing regular content that is relevant to them and their needs. Some companies measure the number of emails, social media posts or blogs etc, but these are just a means to an end. What is more important is whether your content is resonating with your target audience, and you are growing your subscriber base.
Marketing Qualified Leads (MQL)
It’s not the total number of leads you attract that is important. You don’t want to spend money to attract people who have no intention to purchase from you, or who are not a good fit for your product / service.
Marketing Qualified Leads (MQL) count only the number of leads who meet the qualifying criteria as being an ideal target market customer for your offering, based on the identifying information you are able to obtain from them.
Thus, you need to get very clear on who your ideal target customer is first. Then you need to design your marketing messages and filtering mechanisms to deliver a sufficient number of target customer prospects into your sales funnel. We call these Marketing Qualified Leads. You have not spoken to them yet, but they have clearly identified themselves, or taken the necessary actions to achieve a “lead score” that indicates they are now ready for someone from your sales team to reach out and make contact with them.
Sales Qualified Leads (SQL)
Many sales teams are split into two distinct roles; “bookers” (reps who qualify the leads and book appointments), and “closers” (reps who conduct the demonstrations and close deals).
MQLs are handed to your sales team “bookers”. They speak to the lead to confirm whether they are interested in your product / service and whether they have the authority and budget to make a purchase decision within the desired timeframe. These “hot leads” are then booked into an appointment with the “closers” on your sales team, who will take them through your sales process and close the sale. The lead is now a genuine sales opportunity. We call these “hot leads” Sales Qualified Leads (SQL).
Whilst the sales team is involved at this point, I still consider SQL to be a marketing KPI. Your marketing team must work closely with the “bookers” on the sales team to ensure that a sufficient quantity of Sales Qualified Leads is being generated every month to fuel your operating model.
Cost Per Sales Qualified Lead
Your marketing needs to generate plenty of hot leads, but it needs to do so in a cost-efficient manner. Spending millions of dollars on super bowl TV commercials is probably not an option for most of us.Cost per Sales Qualified Lead is calculated by taking your total spend for the period to obtain these SQLs (salaries, plus marketing expenditures) and dividing it by the actual number of new SQLs generated over the period.
Of course, there are many other Marketing KPIs that you could consider, but these five common ones should give you a good start point for discussion.
Regardless of what KPIs you choose to measure, it is vital that your team meets every week to discuss performance.
There is a saying:
“You can only manage what you measure, and what gets measured, gets done”.
I disagree with this statement. Just measuring the numbers will not deliver the outcomes you are looking for. I see plenty of companies who measure the right things, but they still don’t get the results they want, because they fail to meet to discuss performance every week, and they fail to hold people accountable for achieving the agreed standards.
I have my own saying which I think captures it better:
“Successful Business Execution is 20% giving people clarity about what needs to be done, and 80% following up to make sure it actually gets done”.
And to do that, you need to run effective meetings. Every week. Without fail.
What KPIs do you find work best for your Marketing team?