What KPIs your marketing should measure, but most likely doesn’t

Wouldn’t it be a wonderful world if we could all easily tie sales to marketing efforts?

But things don’t work that way, and sometimes we forget that there are many more aspects and KPIs we can follow, bricks and blocks that build the path to sales, that take time, and bring you value in time. Thus, it is very important to measure them.

#1 Sales

Because sales are, of course, the most important aspect of your activity. Take this KPI, own it, share it. Everybody in your company should be aware of the numbers, and not only once or twice a year. After all, you are all rowing on the same boat.

#2 Leads

The more leads you have, the more business opportunities arise, and this translates in better chances to business growth.

Both sales and marketing thrive on leads, but there is a catch. Both sales and marketing have different perspectives on leads. It’s like talking about a cookie when it’s just flour, eggs and sugar (Marketing), and in the oven (Sales), at the same time. No wonder it doesn’t make sense.

Marketing Qualified Lead (MQL) is a lead judged more likely to become a customer compared to other leads, based on lead intelligence your company has, including demographics, activities, and behaviors.

The MQLs are the people who downloaded a piece of your content, a white paper for example.

Ideally, MQL is nurtured through promotional e-mails and social media marketing efforts and it becomes SQL.

The Sales Qualified Lead (SQL) is one that your sales team has accepted as worthy of direct sales follow up.

In a sales funnel, an MQL would be at the widest part of the funnel, while an SQL would be at the narrowest part of the funnel.

Furthermore, you have to understand your company’s Leads to Close ratio – which is the number of leads you’ve received over a specific period of time divided by the actual amount of leads you’ve closed.

#3 Customer Lifetime Value (CLV), sometimes Lifetime Value of Customer (LTV)

Do you know what is your customer worth during the time you have a relationship?

Maybe you have seen it like this:

Or, the simple way

Still looking daunting? Let’s break it down into simple steps.

CLV is a prediction of the net profit attributed to the entire future relationship with a customer.

The key elements that are taken into consideration are revenue and gross margin.


Everybody knows what revenue is, right? It’s the money your company receives during a particular financial period. Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold.

Most important, the total revenue or sales is not the same as profit.

Gross margin

Gross margin is the difference between revenue and cost of goods sold, divided by revenue, expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold (production or acquisition costs, not including indirect fixed costs like office expenses, rent, or administrative costs).

Now, let’s have a CLV example: your B2B company sells some kind of machinery that costs 17,000 Euros. The revenue of your company is 17,000, while the gross margin is 35%. If this would be a one-time purchase, the simple way to calculate CLV is:

17,000 (revenue) x 35% (gross margin) = 5,950 Euros

Now let’s assume that in the customer’s lifetime they will buy on average 7 machines. Then we will have:

17,000 (revenue) x 35% (gross margin) = 5,950 Euros x 7(times) = 41,650 Euros

That’s more like it!

If you don’t already use this KPI, try the simple way as described above. When you become savvier, you might want to add the churn rate, discount rate, and retention costs.

Why is CLV a great KPI?

Because it helps you to gauge your company’s ROI, and it’s a great tool that can help strategize future business goals. It might not be entirely accurate, but it helps to figure out all the sales your average customer has initiated over the course of your relationship.

#4 Customer Acquisition Cost

In simple words, the Customer Acquisition Cost (CAC) means how much it costs you to convince a prospect to become your customer.

So, if you spend 2,000 Euros monthly on marketing, and acquire 10 new customers, then your CAC si 200 Euros.

How to use Customer Acquisition Cost?

Once you have established your costs, you can set goals for how many new customers you want to acquire in a year and then set your marketing budget accordingly.

#5 Sales Team Response Time

One of the main problems with the sales leads is that they are answered a little too late. Have you ever been in the position of wanting to make a purchase and the answer from the sales person came too late, or never? It’s the same with your leads. They don’t know how much work you have to do before you can send the offer, and frankly, they don’t care, and really shouldn’t. If you want to make the sale, then do it. The quality of a lead degrades over time.

“The odds of making a successful contact with a lead are 100 times greater when a contact attempt occurs within 5 minutes, compared to 30 minutes after the lead was submitted. Similarly, the odds of the lead entering the sales process, or becoming qualified, are 21 times greater when contacted within 5 minutes versus 30 minutes after the lead was submitted.” insidesales.com

Measure your team’s’ response time, then check how your competition’s sales team is doing, and consider improving yours, fast.

#6 Website Traffic to Website Lead Ratio

Pretty simple! Out of all your website visitors, how many of them convert and become leads?

You’ll end up with two things:

  • The quality of your website’s traffic
  • The conversion rate of your website

Focusing on improving the website’s conversion rate is an easy way to improve this ratio

#7 Website Lead to Marketing Qualified Lead (MQL) Ratio

Of all the leads your website is generating, how many become MQL? If the ratio is low, then you should probably look at the quality of your website traffic.

#8 MQL to SQL Ratio

If sales and marketing teams work in silos, then you should expect a low one here. The neverending story is that marketing generates poor leads, and sales don’t pay attention to the leads coming from marketing. How will you know your company is in this situation? Measure this KPI.

#9 SQL to Quote Ratio

Want to know how agile your sales team is? Check out this KPI. Out of all the leads qualified as sales leads, how many turn into offers? It is very important to find out the reasons behind the leads that are not being quoted, such as timeline, budget, competition, customization etc. It is most important to understand the factors that influence your ratio and work on them.

#10 Quoted to Closed Customer Ratio

Basically, this is your sales team’s close ratio. So, of all the prospects your sales team quotes, how many become customers? How is this KPI performing? What can you do to improve it?

About the last ones that follow, I know for sure that you measure. But you should look close enough to learn and act upon them.

Website Traffic

The thing with the website traffic is there is a lot of information you can choose from your Analytics account. In the end, it is the customers behind the info that you have to find out about: who these people are, where they’re from and what they did once they got to your site. This helps you know and anticipate your customer needs, and this is after all what marketing is all about, right?

The measurable things behind website traffic are as follows:

  • Sessions
  • Users
  • Page views
  • Page per Session
  • Average Session Duration
  • Bounce Rate

Of course, you can always go further with the digging, but make sure you have these ones first.

Social Media Reach and Engagement

Now I know that social media is a very important part of every company’s marketing strategy and your inbound efforts. It’s the most useful tool you have to share your content and engage with your customers, prospects, fans, followers. It’s heaven sent, but you already know that, don’t you?

A good way to judge its effectiveness is by tracking the growth on each network: followers, Likes, engagement with the content you share, lead conversions, customer conversions and percentage of web traffic associated with your social media efforts.

You will find out, if you didn’t already, that not all social media will work for your business. For instance, B2B businesses selling highly priced services have better results on Linkedin, rather than the companies selling goods or having low valued transactions who perform better on Facebook.

For B2C, it is better to use LinkedIn for reaching out to media and press, bloggers and influencers, who could write about you; or reach the wholesalers and retailer for business.

Email Marketing Performance

Don’t jump to quick conclusions, email marketing is not as simple one would think. Getting people to open your email is a science, with never ending testing and analyzing of results.

Email marketing isn’t dead as some might too quickly say, but make sure it is designed having mobile devices in mind, and tie it to other marketing efforts. It still offers the most staggering return on investment. Don’t believe it? Just compare the costs to the ones for direct mailing, TV, or print.

What could you measure?

  • Delivery Rate
  • Click Through Rate
  • Unsubscribe Rate
  • Conversion Rate
  • Open Rate
  • Forward/Shares

It is vital to know your numbers, acknowledge failures and start building. KPIs help you validate marketing activity, efforts, strategies, budgets and so on.

Do more of the things that perform, stop doing those that suck your budget dry yet don’t withstand objective scrutiny, and redeploy the resources.

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