The 8 Most Important B2B Marketing Metrics For CEOs

What are CEOs most looking for in a B2B marketing department? Clarity. They want to see clear results that show that their marketing efforts are generating ROI.

CEOs expect their marketing leaders to be accountable for exceeding their numbers just as their sales leaders.

CEOs can become frustrated when they are only provided with ambiguous brand data, activity reports and engagement reports from lead marketers. They want their metrics to directly relate to revenue.

Quick Takeaways

• 
  Customer acquisition cost and ROI are the two most important metrics that B2B marketing professionals want to see.
  
• 
  Knowing the right metrics will help you plan, execute, track and analyze your marketing efforts strategically.
  
• 
  Reporting on large-picture KPIs gives your executives more clarity. This will give them confidence in your marketing efforts.
  

Why are B2B Marketing Metrics So Important?

Many B2B companies started Marketing because they needed to hire people to manage events or create brochures. Marketing was more of an in-house agency that provided creative services for sales.

B2B marketing evolved into demand generation, brand, paid media, marketing operations, content marketing, and marketing operations roles. The importance of metrics and KPIs has become more critical. Chief executives expect Marketing to be transparent. CFOs expect marketing to justify their budgets. Many B2B companies are increasingly relying on marketing as a strategic asset.

Advertising, branding, and sponsorships are the main marketing channels in large B2B companies. But it's the content, digital, and demand generation marketing professionals who must fight for every dollar.

Budgets can be justified by measuring. It's the best way to determine what works and improve marketing results, mainly increased sales revenue.

The Most Important Metrics for B2B Marketing

DemandGen Report recently conducted a survey to determine which metrics are most important to B2B marketers moving forward.

• Channels can improve ROI
• Marketing metrics that are deeper and more account-based
• Content influence can increase ROI
• Acquisition of customers at a cost
• Closed-won deal analysis

40% of marketers think they need to improve their ability measure and analyze marketing performance. 82% of marketers intend to improve their reporting capabilities to show how marketing activities impact a company's revenue and pipeline.

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Fortella reports that 80% of B2B marketers use revenue to measure their performance. This is followed closely by pipeline (79%), ROI (74%), leads (70%), and booked sales meetings (58%). Only 49% of marketers used awareness metrics to assess the effectiveness and efficiency of their marketing activities.

Measurement of B2B Marketing: 4 Models

During my time with SAP, I used the 5 V's Model for Marketing Measurement.

• Volume: How Many MQLs/SQLs, SQLs or SALs did we convert and who were they?
• Value: What is the pipeline value for those leads and new business? We also measured pipeline influence in some cases as an additional measure of multi-touch marketing attribution.
• Velocity How long does it take for our leads to go from being qualified to being accepted to closing?
• Variety Are there leads for all segments (country, region vs. small, industry)?
• Viscosity How did leads convert? Which marketing programs had the highest conversion rate?

All the metrics listed below could be grouped under the 5 V model in some cases. These are mostly internal marketing metrics, which helped us to determine what was working and what we needed to improve. CEOs want simple answers such as: How much revenue have you brought us? It is recurring? How much did it cost to acquire that revenue?

Smart CEOs and Venture Capitalists will ask these questions more in depth.

This list doesn't include the following:

• Website traffic
• Emails sent
• Social media "engagement" (mentions, likes)
• Eyeballs
• Clicks

B2B Marketing Metrics That Will Give Your CEO More Clarity

Every CEO is concerned about revenue from new customers, the lifetime value of a new customer (LTV), and their acquisition cost (CAC). We'll discuss this below. To prove your success, you need to include more than that in your marketing reports.

These are the top marketing metrics that CEOs need to know. These marketing KPIs can give you a competitive advantage and help you to evaluate the effectiveness of your marketing campaigns. Your CEO will be able to see the value of your team's contribution.

1. Marketing Influenced Customer Percentage

This will tell you how much of your marketing efforts influenced new customers. This ratio can be calculated by taking the total number and dividing it by the number new customers that were influenced by a marketing activity.

Questions to Answer

• What are the effects of your marketing investments on sales productivity?
• How does this impact your company's sales pipeline
• What are the effects of your efforts on revenue velocity?

2. Marketing-Originated Customer Percentage

Tell your CEO how much new business marketing you are driving. This ratio can be calculated by taking the number of customers that you have signed up during a given period. Next, find out how many of these customers were marketing-generated leads. If you have closed-loop marketing analytics, this measurement will be easier to track.

Questions to Answer

• How much of your customers are marketing-generated
• What percentage of your revenue can sales leads from account-based marketing or demand generation be attributed to?
• How many customers were started as qualified marketing leads?

3. LTV stands for Lifetime Value of a Customer

LTV is a way to predict the lifetime value of a customer's purchase of your products and services. This number can be used to calculate how much you should charge to acquire new customers or retain existing ones.

Take the revenue that a customer has paid you in a given period and subtract the gross margin. Divide this number by the customer's cancellation rate (churn percentage). This will calculate your customer's lifetime value. Another way to calculate LTV involves taking the average purchase times the number of customers who buy from you each year times and the average length of a customer relationship in years.

Questions to Answer

• What is the cost to get a new customer and maintain a profitable relationship with them?
• What products and services are most profitable?
• Which buyer is your most successful?

4. Return on Marketing Investment (ROMI).

The ROMI (or just ROI) metric will allow you to determine the marketing budget and revenue generated. This metric can be used to determine the revenue generated by individual campaigns.

Calculating your ROMI is as easy as taking your total sales revenue for a period and dividing it by the marketing spend made during that period.

Questions to Answer

• Which ROMI is yours?
• What are your marketing costs? What return are you getting?
• Are your campaigns contributing towards company growth?
• Is it possible to recoup the time and money spent on marketing campaigns development and execution?

5. Time to revenue

Time to revenue is the time between when a contract was executed and when a purchase or deal is closed.

Questions to Answer

• How did the marketing team reduce time it took to generate revenue?
• What can marketing do to reduce the expense-to-revenue ratio for both sales and marketing activities?

6. Customer Acquisition Cost (CAC).

Calculate the cost of acquiring new customers by taking the total cost of all your marketing and sales efforts during a period. Divide this cost by how many new customers you have acquired during the same period.

Questions to Answer

• How much does it cost to acquire a new customer?
• How much did your demand generation efforts and lead account-based marketing cost during a given period? Include all compensation to your marketing team, as well as expenses for vendors, marketing technology and other materials.

7. Marketing Percentage of CAC, M%-CAC

Take your total marketing expenditure for a period to calculate your marketing percentage of customer acquisition costs. Divide that number by the total number of customers you have attracted during this period.

The lower the number the better. A high marketing CAC could indicate that your marketing team is spending too much or that your sales team is underperforming.

Questions to Answer

• How does your marketing team impact CAC?
• Is there anything your team can do to reduce this number?

8. Ratio of CAC's Lifetime Value to CAC. (LTV:CAC).

This ratio can be calculated once you have determined your LTV/CAC. Higher ROI is indicated by a higher ratio. If your ratio is excessively, you might want to spend more on sales and marketing. You can aim for 3:1 or 4:1.

Questions to Answer

• Is it too expensive to acquire every customer (a ratio of less than 3:1)?
• Are you missing opportunities because you don't spend enough?

This periodic table of B2B marketing metrics by pmg provides a more comprehensive list and some benchmarks.

Here's a cheat sheet by Hubspot that will help you with the metrics we have described:

Make B2B marketing content that converts

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