January 26, 2020
Marketing KPIs for success | Lead conversion rate formula
Whether you’re setting a personal or business goal, there is no point to goal setting if you’re not tracking progress on a regular basis. So, what metrics should be measured to monitor your team’s success? In business, marketing key performance indicators (KPI) are essential metrics to help you and your team determine the effectiveness of your organization’s marketing and sales efforts. Tracking your marketing KPIs gives your team a chance to see which strategies are working and which ones are not.
In this post, you’ll learn:
- How to create a budget for your marketing campaigns
- Qualitative and quantitative KPIs to focus on
- Actionable steps to finding an agency to help your campaigns reach success
How do I calculate the budget for a marketing campaign?
Let me clarify the process on how to calculate the B2B marketing budget you would need. Marketing campaigns are divided into three sections:
1. Before the campaign
Make a list of all the tasks you need to take care of before even starting the campaign. And yes, this also means analyzing how many hours your team will be focusing on that particular campaign (time is money, isn’t it?). This means, teamwork creatives, coding, copywriting, team meetings and project scheduling.
During this phase, you will need to work on:
- Target personas: Who is your audience? What do they need? What is important to them? What’s their selection process? This research will avoid disastrous B2B marketing budget burn.
- Brand identity: Of course, you will need a logo, but what about a brand promise, identity and personality?
- End goal/Purpose: What do you want to accomplish with this campaign? Do you want to improve the sale of a specific service? Or do you want to find potential partners?
- Irresistible offer: What benefits do you bring to the table? What do you have to offer in exchange for your audience to accomplish the end goal?
- Research, analysis and brainstorming: Never assume something because you think that’s what people want. That’s the #1 rule of marketers. Take the time to analyze your audience, the way they communicate with others and the platforms they like to use. Don’t limit your research to blog posts. Find insights and research from competitors and industry think tanks.
- Message: My mom always told me that it is not what you say, but how you say it. So, the challenge is to persuade the audience to go for the main goal. How are you going to do it? Well, words are cheap so bring emotions to the table. Images are wonderful to make your message stronger. Maybe even a dynamic website to grab the visitor’s attention.
- Understand the technology you’ll use: Not all campaigns require the use of the same tech and templates. Depending on the media selected, you will need support from tools like analytics, email automation or SEO software. CRM like Hubspot offers the capability of running ads and automated marketing campaigns from the same platform (brilliant for inbound marketing).
2. During the campaign
In this phase, you will start using your second part of the total budget. Here, you need to consider how much money you allocated for the campaign run and its performance. How long will it last? How many channels are you covering?
Some of the tasks you need to accomplish during this stage are:
- Channel selection: Which platforms are you selecting to spread the message? Is this an inbound or outbound marketing campaign? Hint: Based on the end goal of your campaign, you will know the platforms you’ll be using to execute it.
- For example, email marketing campaigns normally require not only marketing automation software but: Landing page provider, analytics and CRM
- Campaign budget: How much money do you have to sustain the project? This will help you optimize the resources that you have in order to accomplish everything needed for the campaign. If you just need social media to bring users to your blog but the end goal is to turn them into leads, the relevance of content creation increases while social promotion decreases.
- Campaign schedule: You need to be wise when it comes to assigning the timings and length of the campaign. We are constantly bombarded with advertising on TV, in newspapers and on the Internet. Even the hour and minutes selected to send an email will affect its success. According to your own business and industry insights, you will be able to discover:
- Which are your business seasonal opportunities
- What days of the week/month work better for your audience
- Which platforms your audience uses/prefers
- Campaign performance: As I will always highlight, marketing is a test-and-fail process. It takes time to determine what works for your business but it is easy to tell what simply doesn’t. According to how the audience reacts to your campaign, you may need to do some optimization, or pause it completely. It doesn’t matter how much money you saved for the campaign, the main goal is to not waste it.
3. After the campaign
Marketing must be constantly monitored to guarantee you are not losing the investment. How are you going to measure your campaign’s success? Maybe reaching a certain level of domain reputation, good reviews, subscriptions or an increase in the number of leads that graduate to sales opportunities? Describe specific marketing KPIs (qualitative and quantitative) and analyze performance.
As the campaign is running and once it finishes, it’s time to analyze the results. This is my favorite part because you will be able to determine valuable insights like call-to-actions that persuade audience preferences, personas, conversion and drop-off points, etc.
Qualitative marketing KPIs you should focus on:
- Brand awareness: You are not a ghost anymore. People search your business online. You can measure it based on the number of visitors you have per keyword.
- Brand reputation: Your business is an industry reference. You don’t need to promote yourself to keep a constant flow of customers.
- Partner influence: Your industry recognizes your brand as a reference. Other companies agree/want to refer leads to your business.
- Employee advocacy: Your employees are committed to the company goals. Senior professionals want to be part of your team. There’s a sense of loyalty to the brand. Employees recommend your company as a unicorn working space.
- Long-term impact: even the smallest effort may have a huge impact on your business. Keep in mind that marketing will always have short and long-term goals. If you set a great PPC campaign but never work on your site SEO then forget about reaching Google’s first page. Every campaign has a main goal but your marketing team has the key goal in their hands. Every effort should achieve the immediate goal and still complement the key one.
Quantitative marketing KPIs you should be measuring:
- Revenue/return of investment: This is the main KPI to measure and the only one that will tell you if you are losing money. If your ROI is negative, you are burning money. If you are in red, pause the campaign and contact us immediately before the entire budget burns.
- Cost per lead/acquisition: How much money does it cost you to obtain each lead? This will help you calculate how many leads you can gain based on the marketing budget you invest.
- Cost per conversion: It’s vital ital to measure ROI. It determines how much money you need to invest in order to make the user finish the sales funnel. It will help you discover the value of each lead you are gaining and at which stage you are losing a sales opportunity.
- Traffic increase: How many people are interested in your offer? This helps you determine if the irresistible offering is good enough to grab people’s attention. Also, will help you determine which marketing efforts work better for your business and how previous campaigns are working over time.
- Bounce rate: What percentage of prospects visiting your site are clicking on your ad and abandoning the page right away? This will help you learn how to manage audience expectations. If your offer benefit is not clear, you are making false promises or targeting the wrong people.
- Return visitors: A very important KPI to discuss with the sales team. This will show the engaged leads, their behavior and will help you determine their needs. Keeping track of users using a CRM like Hubspot is the best way to guarantee you will be able to determine your sales opportunities.
- Lead increase: This KPI will help you determine the success of the campaign by showing how many people joined your sales funnel, how much visibility your business has and if the effort applied to bring other benefits such as new contacts. The lead increase doesn’t refer specifically to those new potential customers but if they graduate of each stage on the lead status, and the different opportunities you have.
- Time on page: Another sign of engagement. It will allow you to know if visitors are interested in your offer. Also, you will be able to know how your site content is performing, are people actually reading it? Which of your website pages are more popular and why?
- Purchase intention: Determining the stage of the lead in the sales funnels will help you understand the information that the user is needed at that time. Also, it gives you insight into whether the product or service you are offering is persuasive enough or if there are any leakages in your sales funnel.
- Hint: Good marketing always facilitates sales conversion by preparing the leads before they meet with sales. This will help you optimize the resources by liberating your sales team from working on weak or cold leads.
- Sales per channel: understand the channels used by your audience. It may be a discrepancy between the ones that bring you more leads and the ones that actually lead to a sale. Understanding the value of each platform will help you organize your next campaign budget according to the end goal.
However, it doesn’t matter how much effort you put into marketing if your team doesn’t have a clear lead-generating process. Marketing and Sales manage their own KPIs, so the goal is to understand exactly in which stage of the funnel you are losing clients.
Some quick tips to get you started
- Research the company or the professional you want to hire: Their website is not enough to determine if they’re worth your time. Google them. Find what people think about the company by reviewing their social media comments.
- Ask for recommendations or request case studies: Always verify the information to confirm that the companies are real.
- Make sure you understand the marketing plan and specific goals outlined: Ask for details about the strategy such as why a certain action is step recommended and what are the expected results.
- Ask your agency to explain to you how they will measure the success of the campaign: Request a campaign report and the tools used to calculate its performance.
Typically once you get a tad of profit rolling, marketing should start being top of mind—as long as your sales team is good at converting leads to deals.
So, is the sales department more important?
Not really. Although most emerging and middle-market businesses will naturally be more sales-oriented (as that’s what got them to where they are now). However, in order to go exponentially further, marketing is necessary. But most people forget that you need to prepare the sales team first. Maybe you won’t get tons of leads right away but trust me, if your sales team can’t convert the leads into clients, you’ve got a need for solid marketing practice.
The two teams complement each other. Though sales can go well without marketing, they will still need sales material… which is made by a marketing team. And although marketing can still accomplish the goal of building a strong brand, it still needs a clear and comfortable sales offering to start generating real money.
Imran is the founder and CEO of Productive Shop. He writes on B2B demand generation and SEO strategy topics to help startups understand how to win digital share of voice. Prior to Productive Shop, Imran led demand generation at an Oracle consultancy, ran an e-commerce site servicing LE teams and helped build PMO offices at technology startup companies. When he’s not at work, Imran can be spotted hiking in the Rockies, honing his clay shooting skills and tumbling off of black diamond ski tracks due to overconfidence in his skiing abilities.