B2B businesses have the longest sales cycle and a wrong move can negatively impact the overall conversion ratio of your business.
Around 58 per cent of B2B buyers said the decision process is longer in 2017 than it was in 2016. It is continuously growing with every passing year.
This is the reason, data-driven B2B marketers always rely on clear KPIs to power up their marketing campaigns.
Startup founders who do not take their marketing KPIs seriously find themselves in a tricky situation later on.
Some of the key B2B metrics that every startup should track are discussed below:
1. Monthly recurring revenue (MRR)
MRR stands for Monthly Recurring Revenue. This is the amount that enters the account each month as subscription charges.
Suppose ABC company acquires 10 new customers who have subscribed to individual packages worth $99 each month. The total MRR for the month would be $99×10 =$990.
Now, after a month, the company again acquires 7 new customers who have subscribed to individual packages worth US$99 each. The existing MRR would be $990 while the new MRR would be US$99×7 = US$693.
Hence, the total MRR would be 990 + 693= USD$1683.
2. Customer lifetime revenue (CLR)
This is a key metric that measures the revenue you receive from your repeat customers within a specified period of time. For a subscription-based business model, this period can be assumed to be of 14 months. New customers stay with the business for around 14 months before they quit.
Identifying CLR values can help you determine the optimal cost of CAC (Customer Acquisition Cost). Suppose if your CLR is USD$250 and the CAC is USD$275 then you are at a loss. CLR should always be higher than CAC.
Klipfolio is a great tool that lets you measure the CLR or the CLV (Customer Lifetime Value) accurately and displays it on the dashboard.
3. Website traffic
The total number of traffic the website receives is a great metric to track because it tells you about the effectiveness of your digital marketing efforts.
You can use the free Google Analytics tool to track the number of visits to your site.
Moreover, you can sort the visits on the basis of desktop, mobile or on the basis of the top channels that are sending traffic to your site.
4- Landing Page Conversion Rate
In order to optimize your entire website for conversions, it is important to track the pages that are converting the maximum visitors.
The average landing page conversion rate is a little more than 30 per cent.
Hence, you need to keep the landing pages conversion higher than the industry average. Analytics software like Finteza is essential to identify which campaigns are performing well and leading to sales.
You can apply filters according to your business goals to get the maximum details about a campaign.
A lot of people browse through the landing page and exit without doing any transaction and only a few users reach the target stage.
In order to identify the well-performing campaigns, click on the landing page stage under the ad campaign tab.
You don’t need to configure funnels. Finteza will link all the events with the same prefix into a single conversion funnel and will arrange actions accordingly.
In case you want to change a funnel, just click on the edit mode which can be found at the upper right corner of the corresponding button.
It is very important for startups to analyze the marketing funnel as it will help them understand at which stage most of the users are finding difficulty.
KPIs for B2B Advanced Marketing
When you have understood the importance of KPIs and have started evaluating the overall performance of your marketing team then the time is ripe to move on to apply advanced marketing KPIs into your B2B marketing strategy.
Trial conversion rate
The trial conversion rate measures the potential of your trial subscriptions to qualify into actual paid subscribers.
Trial conversion can let you understand the effectiveness of your marketing campaigns and ensure that you offer the right solution to the right people.
Trial conversion rate can be high or low.
A high value indicates that your trial has the potential to qualify into paying customers while a low value indicates that your software isn’t liked by the people because it isn’t solving the most pressing problems.
Online order frequency
Most B2B businesses focus on improving revenue rather than the flow of online orders. This is where measuring the online order frequency can come handy.
Online order frequency can be tracked using a tool like Google Analytics. The order frequency is directly proportional to the number of qualified prospects visiting your website.
Conducting surveys about the experience of buying on your site from your existing customers can prove to be extremely beneficial in improving the online order frequency.
Average sales cycle (ASC)
The ASC is the time taken by the customers to close the deal from the first interaction they had with the brand.
This should not come as a surprise but most of the B2B marketers do not measure this value and are pretty unaware of the actual time the customer takes to convert.
The sales cycle should be as short as possible. Right after the lead is generated, all the strategies related to lead nurturing should be applied in order to convert the prospect at the earliest.
InsightSquared is the tool that is pretty useful in tracking your current sales cycle and also provides forecasts to make accurate decisions on time.
Net promoter score (NPS)
The NPS measures customer experience. This score is correlated with revenue growth and is used to identify the loyalty of the customer towards a business.
A Net Promoter Score divides your customers into 3 types:
- Detractors: They rate your business between 0-6 on a scale of 10 and are the biggest threat to your business. They aren’t satisfied with your product and often complain about your products or services.
- Passives: They are also known as the uncommitted. They rate you between 7-8 on a scale of 10. They have the maximum chances of leaving your company if they find a good offer from your competitors.
- Promoters: They are your real fans and rate you 9-10 on a scale of 10. They are your real fans and have the potential to make your business go viral.
You can calculate the NPS using the below formula:
- (Number of Promoters — Number of Detractors) / (Number of Respondents) x 100. Suppose you have 100 promoters, 30 detractors and 200 respondents then your NPS would be (100-30)/200X100 = 35. NPS is always represented as an integer and not as a percentage.
There are so many KPIs that Chief Marketing Officers should be concerned about. The best ones have been discussed in this article.
Listing down all the KPIs in one centralized place and taking appropriate actions to improve their numbers is one of the best ways to maximize the performance of your B2B marketing strategies.
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Image Credit: Corina Rosu