May 9th, 2013
Marketers need to prove ROI on every marketing activity they engage in, so gathering and analyzing data has become a major part of the marketing job function. According to the Content Marketing Institute, 33 percent of BtoB marketers believe the inability to measure marketing activity is a significant issue. As a company, our major concern lies in tracking lead conversion from the source of their entrance into our database all the way to the sale. However, on the marketing team specifically, we are responsible for four major KPIs:
1) Number of MQLs. At Sales Engine, a marketing qualified lead (MQL) is defined by lead score. Each month, we measure how many leads pass our lead score threshold and become an MQL. To do this, we pull a report from Salesforce.com (which is integrated with our Manticore marketing automation platform) that tracks a change in lead score for all leads in our database. We then filter the data by the lead score criteria to determine our total number of MQLs.
2) Conversion Rate of MQLs to SALs. To measure the conversion rate of our MQLs to sales accepted leads (SALs), we consider two factors: the percent of leads that converted as well as the average days it takes to convert. For our purposes, an SAL is a lead that has accepted a meeting with our sales team. The tricky thing about the conversion rate is that we must consider velocity—not every MQL is going to convert to an SAL within the same month.
To calculate the percent of conversion, we break our SAL data into three buckets: converted within 30 days, 60 days, and 90 days—after 90 days our lead score depreciates by 100% and the lead becomes a suspect again. To calculate the average days to convert, we measure how many days passed from the date each lead became an MQL to the date they converted to an SAL. Then, we average the days for all the leads within the current month.
3) Conversion Rate of Unknown to Known Web Visitors. The conversion rate of unknown to known visitors measures marketing’s ability to capture new leads. To calculate this number, we look at Google Analytics to tell us how many new visitors came to our website within the current month. Then, we run a report on the Manticore platform which tells us how many new leads registered on a landing page in the same month. Finally, we divide the number of new registrants by the number of new web visitors which give us our rate of new lead conversion.
4) Cost per SAL. The cost per SAL tells us how many marketing dollars it takes to convert an MQL to an SAL. To determine this value, we simply take the number of marketing dollars spent within the current month and divide that by the number of SALs converted in the same month. We do not take velocity into consideration for this calculation. The data is too volatile at a monthly level, so we actually aim for a yearly average instead. The hills and valleys created by this shifting data are just as important to capture.
These KPIs are the top four metrics that our marketing team is accountable for on a monthly basis. However, they are only a small fraction of total reporting. We also examine at channel performance, lead source, the conversion rates for leads that advance beyond an SAL, and more.
For information on additional, higher-level marketing metrics like customer acquisition cost (CAC) and customer lifetime value (CLV), view our webinar: How much marketing do you need?