B2B marketing is a unique and challenging beast. You’re dealing with businesses, not regular consumers, which means that measuring marketing ROI requires a specialised approach. Specifically, you need to be methodical, and that means looking at KPIs for B2B marketing instead of simple sales numbers or revenue.
In this guide, we’ll share marketing measurement advice to help you craft a data-driven approach to your own marketing strategy.
What is B2B marketing?
B2B marketing is the process of promoting a brand, product, or service to other businesses, with the goal of converting them into clients.
It’s fundamentally different from B2C marketing, which focuses on promoting to the average consumer. As such, B2C marketing primarily revolves around driving awareness and generating sales, while B2B marketing is more about building relationships and establishing trust.
With B2B marketing, you’re targeting decision-makers in other businesses. They already know the features they want, how much they’re willing to spend, and what their needs are. Your job is to show them that your product or service can fulfil those needs in a way that also serves their bottom line.
Measuring what matters in B2B Marketing
B2B marketing metrics give you a quantitative way to measure whether your marketing efforts are working or not. Without these metrics, demonstrating the ROI of your B2B marketing initiatives in any meaningful way would be impossible.
On top of that, failing to prioritise the right metrics can drown you in data and prevent you from making sound decisions. There are a lot of metrics out there related to B2B marketing, but not all of them are equally valuable.
So how do you choose which metrics to focus on?
The answer lies in your business goals.
The more you know what you’re trying to achieve, the easier it is to choose the right metrics and invest your time and resources in the things that matter most.
For example, if your goal is to increase brand awareness, it would make sense to focus on metrics such as website traffic, social media engagement, or webinar signups. If your goal is to increase qualified leads, you might want to focus on metrics such as form submissions, newsletter signups, or e-book downloads.
The point is that the right metric depends on your specific goal. So, before we dive into a list of essential B2B marketing metrics, let’s take a look at how to set goals to help inform your metric selection.
How to set B2B marketing goals
The most effective way to choose the right B2B marketing metrics is to set goals that are specific, measurable, achievable, relevant, and time-bound (SMART).
This may sound like a no-brainer, but it’s actually harder than it seems. Unfortunately, a lot of businesses fall into the trap of setting goals that are either too vague or too unrealistic.
For example, a goal like “increase brand awareness” is too vague. How will you know when you’ve achieved it? On the other hand, a goal like “double website traffic in one month” is too unrealistic. It might be possible, but it’s not likely, and even if you do achieve it, there’s no guarantee that it will translate into more business.
The best way to set SMART goals is to use the Objectives and Key Results (OKR) framework. With OKRs, you set one overarching goal (the Objective) and a few specific measurable goals (the Key Results) that need to be achieved in order to reach that Objective.
Here’s an example:
Objective: Increase brand awareness
As you can see, each of the Key Results is specific, measurable, and time-bound. On top of that, they’re also relevant to the Objective (increasing brand awareness), and they’re achievable yet still challenging.
Now that we’ve covered how to set better B2B business goals, let’s take a look at some essential B2B marketing metrics you should be tracking to get closer to your goals.
B2B marketing metrics and KPIs
To get you started, we’ve compiled a list of essential B2B marketing KPIs that we think every B2B business should track. Let’s dive right in:
1. Lead to close conversion rate (CVR)
In the B2B marketing world, the Lead to Close Conversion Rate (CVR) is the percentage of leads that have converted into customers and/or deals.
The purpose of a lead-to-close conversion rate is to understand how well an organisation’s sales reps are converting leads into workable opportunities.
Additionally, it tells you whether your current marketing campaigns are driving results because before you can get leads, you need to market to those potential leads first.
2. Customer acquisition cost (CAC)
Customer Acquisition Cost (CAC) is the total amount of money a B2B business spends to acquire one paying customer. So naturally, you want that number to be as low as possible without sacrificing the quality of the customer acquisition process.
3. Website Traffic
Website traffic may not seem like a crucial B2B metric, but it’s actually a good indicator of visibility and audience development.
A decrease in website traffic can be a warning sign that something is going wrong with your marketing strategy.
On the other hand, if you notice your website traffic increasing, that generally means your current B2B marketing strategy is working – and on that note, you may want to look into how to replicate and amplify those positive results.
4. Marketing qualified leads (MQLs)
Marketing Qualified Leads (MQLs) are leads that have been through your B2B marketing funnel and have shown interest in your product or service. They’re usually further along in the sales process than other leads, which makes them more valuable.
To use an example, imagine you sell software to businesses. An MQL might be a business that’s already familiar with your brand and has downloaded a white paper or attended a webinar that you hosted.
This metric will help you assess how much money you spend on each MQL. If you think it’s too much, you can adjust your B2B marketing strategy in alignment with the projected budget.
5. Monthly recurring revenue (MRR)
Monthly recurring revenue (MRR) can help you determine the success of a marketing campaign. Naturally, a successful campaign will lead to new customers and/or contracts, which in turn will result in more monthly recurring revenue.
You can calculate MRR by taking the total revenue from all customers in a month and dividing it by the number of customers. This will give you the average monthly revenue per customer, which you can then use to extrapolate for future months.
6. Customer lifetime value (CLV)
Customers don’t always stay with a company forever, but those that do tend to be the most valuable. That’s why customer lifetime value (CLV) is such an important metric for any B2B marketing team.
CLV is the total amount of revenue that a customer will bring to a company over the course of their relationship. To calculate it, you need to take into account the length of the customer relationship, the customer’s churn rate (or how likely they are to leave), and the customer’s average spend.
This metric can help you determine whether your marketing efforts are resulting in long-term customers and, if not, what changes you need to make.
7. Churn rate
For B2B businesses, the churn rate is the percentage of customers who cancel their subscription or contract within a given time period. Here are a couple of things to note about the churn rate:
- It will always be present: There’s no such thing as a business with 0% churn. Not every B2B customer will stay with you forever, and even the most loyal customer can leave at any time, for any reason.
- It’s not always your fault: Just because a customer leaves, it doesn’t mean you did something wrong, and it’s especially true in the B2B world. However, since you’re dealing with other businesses, there’s a good chance that their needs will change over time, and they might need to switch to a different provider that can better meet those needs.
With that said, it’s still important to keep an eye on your churn rate and work to reduce it where possible. A good churn rate is anywhere from 5% to 7% annually and less than 1% monthly.
The next steps for your KPI tracking and measurement
Tracking B2B marketing metrics aren’t optional – they’re essential to the success of your marketing campaigns.
By keeping an eye on these numbers, you can monitor the health of your business, fine-tune your marketing efforts, and ensure that you’re getting the best return on your investment while serving your clients and customers in the best way possible.