Marketing is becoming increasingly a science rather than art, with ever greater focus on numbers and key performance indicators (KPIs).
In part one of this series, we explored seven KPIs in the business category. In part two, we discovered 10 customer-specific metrics. In part three below, we’ll explore 10 KPIs that measure marketing performance.
The significance of each particular KPI depends on your company and its goals. They are essential to calculate and prove marketing ROI.
1. Marketing-Driven Pipeline Value
How many potential deals are in the pipeline, that were generated by marketing? This KPI helps reveal whether we’re likely to meet marketing revenue goals. If meeting our marketing goal calls for $10 million, and we’ve only got $5 million in pipeline, marketing might need to generate higher volume of pipeline to ensure goal achievement.
2. Sales Driven Pipeline Value (B2B Only)
This KPI applies mostly to B2B, and helps distinguish whether various departments – marketing versus sales – are generating sufficient leads.
3. Total Responses
This metric enables you to measure the volume of marketing activities, such as site visits or emails opened. But it speaks only to quantity, not quality. It can be counterproductive to focus on the cost for responses, rather than the cost per sale, because a response offers no guarantee of purchase.
4. Total MQLs
This measures the number of leads deemed by marketing to have sufficient potential, such as worthy of a sales call. MQL helps sales to engage with leads more efficiently based on discovered interests and prioritize leads, and close deals faster and more efficiently. This KPI is effective only if you have effective qualification rules, such as scoring of activities.
5. Sales Accepted Leads (SALs)
This is the number of prospects qualified by marketing, then accepted by sales. If your MQL (marketing qualified leads) to SAL conversion rate is high, marketing is generating the kinds of leads needed by sales. If it’s low, marketing needs to make changes in qualification rules, such as passing score, type of activities prospects engage with, type of content, prospect profile score or grade, , and more.
6. Total SQLs
This KPI follows SALs. These are leads in the CRM, that are then further qualified by sales, through processes that are automated, manual, or both. These are often qualified by BANT: budget, authority, need, and time. This KPI helps you narrow down your pool of prospects, and focus your time on the most promising leads.
7. Sales Qualified Opportunities (SQOs)
This is the last stage of the waterfall, that started with MQLs. It’s an extremely important KPI, because it reveals whether or not marketing and sales are doing a good job. If for example, 100,000 MQLs resulted in only five SQOs, then either marketing is failing or sales is not able to bring leads to deal level. Either way there should be an investigation done to review potential flaws.
8. Cost Per Response
This measures how much it cost to generate each lead. If you spend $5,000, and generate 10,000 leads, that’s a low CPR. But if those 10,000 leads yield only one opportunity, you’ll need to focus on cost per SQL. It’s important to correctly identify your cost basis here, such as the cost for a campaign, rather than marketing’s total budget.
9. Cost Per MQL
This is the money spent to generate each MQL. It’s important to measure this cost accurately, but it can be tricky, as it can involve staff salaries, equipment, tools, and campaigns. It’s important to keep the cost low, and the quality high.
10. Cost Per SAL
This measures cost for sales accepted leads and includes marketing and sales expenses.
Conclusion – measuring something is the first step to growing it. KPIs are essential metrics for tracking your marketing, and boosting your return on investment. This is part three of a four-part series; check back soon for part four, and discover more powerful KPIs.