Ep 47 - Main KPIs When Tracking B2B Demand Generation Tactics - Part 1
Demand Gen DailyMarch 20, 202310:2252.32 MB

Ep 47 - Main KPIs When Tracking B2B Demand Generation Tactics - Part 1

Demand generation is a critical aspect of any B2B service-based business, and tracking the right key performance indicators (KPIs) is essential to ensuring the success of your demand generation strategy. In this podcast, we'll outline the most important KPIs to track, as well as some best practices for measuring them effectively.

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[00:00:00] Today we are talking about Demand Gen, what are the main KPIs you should be tracking as

[00:00:04] always I am Nick and Amber Key and welcome to Demand Gen Daily Podcast.

[00:00:18] All right, as always, please remember to like,

[00:00:20] follow, subscribe, leave us a question.

[00:00:23] This episode is based on a question like most are and we are going to be talking

[00:00:27] about what am I tracking when it comes to B2B Demand Gen?

[00:00:33] What are the best KPIs we should be tracking if you are a service based business specifically that

[00:00:38] deals in B2B.

[00:00:40] So if your program is basically starting up from the ground up, there's a ton of things

[00:00:46] that we should be measuring but what are the non-negotiables of the whole thing?

[00:00:50] So we should for sure be looking at things like number of leads per month and this is all per

[00:00:56] month. We can get into some more advance of me towards the end of the episode but we'll keep it

[00:01:00] simple for now.

[00:01:01] Number of leads generated, how much was that in marketing costs and not just marketing

[00:01:06] cost media cost?

[00:01:08] So there's a couple of cost centers that you want to separate very clearly within this

[00:01:14] KPI sheet that you're going to make.

[00:01:17] So number one, media cost, that's one line.

[00:01:20] Don't blend it with anything else.

[00:01:22] All your media costs, Google, Facebook, LinkedIn, whatever it might be.

[00:01:27] Put it all in one line.

[00:01:29] Trade, like if you're advertising in like online trade, like publications and things

[00:01:32] like that maybe there's some sort of aggregator that goes under media spend as

[00:01:37] well.

[00:01:38] If you want to break that into a subline please do likewise with Facebook,

[00:01:42] Google, etc.

[00:01:42] If you want to break these into sublines, great, but the roll up needs to be

[00:01:45] media cost.

[00:01:48] Then you're taking all other marketing expenses.

[00:01:52] So this is literally employees.

[00:01:55] So for example, if you have a couple of employees put their entire salaries in

[00:01:59] there, if somebody, you have somebody maybe working 50% of their salary, 50%

[00:02:05] of their time in corporate marketing, grab that 50%, put it into that

[00:02:10] marketing, I'll call it a marketing FTE costs, full-time equivalent cost.

[00:02:15] So literally put that money in there.

[00:02:18] And then you want to address sales FTE costs.

[00:02:22] So this is the exact same thing as marketing, but for sales.

[00:02:24] Now if you're in like a B2B service firm, a lot of the time the sales

[00:02:28] process is going to include like a partner or like a manager or whatever

[00:02:32] having you might have some sales people that's great their salaries

[00:02:35] go in there for sure.

[00:02:36] But you should figure out how much of, you know, that partner's time goes

[00:02:40] into it.

[00:02:40] Is it like 10% of the time?

[00:02:42] Is it 5% of the time?

[00:02:43] You got to take that number, put it in there.

[00:02:45] So you have three primary costs.

[00:02:48] Media only marketing people sales people.

[00:02:54] Now another cost could be branding like general brand.

[00:02:59] This is a little bit of a harder one.

[00:03:01] You do want to track this as well because brand technically serves

[00:03:06] as a global multiplier.

[00:03:08] Like if you do, if you get a result and your branding is really good

[00:03:11] and you're emphasizing brand as well as these like direct lead

[00:03:15] generation channels, brand is going to act as this multiplier.

[00:03:18] That's going to get you more leads for same or less money.

[00:03:22] Right?

[00:03:23] So you want to track them a separate line per month, but the

[00:03:26] caveat to this is that brand works like on a delayed fuse where

[00:03:29] it's not going to work right away.

[00:03:31] Right?

[00:03:32] But you want to basically track the three primary cost centers

[00:03:35] and then branding as a fourth, but I wouldn't put it in the

[00:03:37] direct sheet.

[00:03:38] Like that's for additional calculations down the line because

[00:03:41] again, delayed reactions, et cetera, et cetera.

[00:03:44] I like to judge a brand more so on a six month basis or a yearlong

[00:03:47] basis, more so than a month to month basis, but putting the

[00:03:51] monthly expenditure on brand somewhere is not a bad idea because

[00:03:55] then you can just add months at a time of it.

[00:03:58] Then you want to like the record how many marketing qualified

[00:04:02] leads that are versus sales qualified leads.

[00:04:04] So let me talk about this really quickly.

[00:04:05] Marketing qualified leads are leads that come in from any

[00:04:09] kind of marketing system.

[00:04:11] They don't necessarily mean though that they're valid leads and

[00:04:17] which we would call a sales qualified.

[00:04:20] So let's imagine the lead comes in your ideal client profile or

[00:04:23] your minimum client profile is that they have a business that

[00:04:29] needs to spend, that needs to have $2 million in top line sales.

[00:04:32] And you know that below 2 million top line, they're not

[00:04:35] really a fit for your services.

[00:04:37] So what you need to do is qualify them for that minimum.

[00:04:43] And like the criteria could be revenue, it could be a ton of

[00:04:46] different things.

[00:04:47] So when somebody gets them on a sales call or some sort of

[00:04:51] consultation and you're running through the criteria with them

[00:04:54] and asking, hey, do you have this, do you have this, do

[00:04:56] you have this?

[00:04:56] All of a sudden they say no, and that's like a deal breaker.

[00:04:59] That's a marketing qualified lead that did not become a

[00:05:02] sales qualified lead.

[00:05:04] Sometimes there's marketing qualified leads where you

[00:05:05] reach out to them a bunch of times.

[00:05:07] They don't work at their own answer you.

[00:05:09] They say that is marketing qualified leads forever.

[00:05:11] They never became a sales qualified lead.

[00:05:13] If they adhere to your client criteria, that's a sales

[00:05:17] qualified lead and it's a job of sales to get them to a

[00:05:20] close.

[00:05:21] So this isn't being closed.

[00:05:22] This means like they have a need, they fit our client

[00:05:25] criteria and we can attempt to close them.

[00:05:28] That's a sales qualified lead.

[00:05:29] You want to track your marketing qualified leads and

[00:05:32] your sales qualified leads.

[00:05:34] And if you have a good CRM, you should be able to see the

[00:05:39] time it takes in number of days to go from marketing

[00:05:44] qualified lead to sales qualified lead because

[00:05:46] you're trying to get a sense for how long it takes a

[00:05:49] lead to come in all the way to close and or

[00:05:52] qualification because here's the punchline like

[00:05:55] generally you're going to see leads that take longer

[00:05:59] to qualify as a sales qualified lead.

[00:06:01] The ones that take longer, those close less on a

[00:06:04] percentage basis than the ones that convert into

[00:06:07] this sales qualified lead fast.

[00:06:09] But you want to track those two numbers.

[00:06:12] Next, you want to be tracking the close amount

[00:06:15] expressed as two different numbers depending on

[00:06:18] your business one or the other or ideally both.

[00:06:22] Number one, total close amount.

[00:06:24] For example, if you have a service that is

[00:06:25] $4,000 a month, the total close amount is $48,000.

[00:06:30] So you're going to track 48K as the close amount,

[00:06:33] estimated close amount or whatever your lifetime

[00:06:35] values.

[00:06:36] Second line that you're going to track is monthly.

[00:06:40] So MRR monthly recurring revenue in which in

[00:06:43] this case is 4K.

[00:06:44] So track one or the other or both.

[00:06:47] Next, you want to track contribution margins.

[00:06:50] So if you know that your services are on average

[00:06:52] 66% contribution, put that in and then you're

[00:06:56] basically going to figure out like how much of

[00:06:58] that 48,000 is contribution towards the

[00:07:02] business after direct costs.

[00:07:03] Basically, right?

[00:07:04] So if you're running at 50%, that's 48 times

[00:07:08] 0.5 equals 24.

[00:07:10] And if that's 4K a month, it's four times

[00:07:12] 0.5 equals two.

[00:07:13] Right?

[00:07:15] Then you want to break down based on this

[00:07:17] initial, you now want to break down cost per

[00:07:21] lead based on media only.

[00:07:25] Right?

[00:07:27] And then the ROAS, which we've talked about

[00:07:29] extensively in this.

[00:07:31] And if you don't know what the ROAS formula is,

[00:07:33] please look it up.

[00:07:34] Then you want ROAS media only.

[00:07:37] Right?

[00:07:38] Because that's the definition of ROAS.

[00:07:39] Then you want PPC cost per lead all in.

[00:07:43] So this is where you're taking the total number.

[00:07:45] Or like you're basically taking all the costs

[00:07:48] for media and marketing because MQLs don't

[00:07:52] actually have sales costs attached to them

[00:07:55] quite yet.

[00:07:55] I think those costs and then divide them by

[00:07:58] a total number of MQLs that you generate.

[00:08:02] Yeah.

[00:08:02] So Nick, if it's not already self evident

[00:08:05] for anyone listening, can you walk us

[00:08:08] through really quickly?

[00:08:09] Like what is the point of tracking all

[00:08:11] of these different pieces?

[00:08:14] To identify the blockage.

[00:08:16] So you want to identify where things

[00:08:18] are falling short.

[00:08:19] And these things so far that I've mentioned

[00:08:21] don't actually quite get you there because

[00:08:23] you don't have anything comparative quite yet

[00:08:24] because all I've really said in a nutshell is

[00:08:27] track all these things.

[00:08:28] There's only been like one thing where we're

[00:08:30] really getting into what so what does this mean?

[00:08:33] Cost per lead ROAS, you need to get

[00:08:36] this is the important one customer acquisition

[00:08:38] cost.

[00:08:39] This is where you're taking the total number

[00:08:42] of closes for a given month.

[00:08:45] Right?

[00:08:46] And you're basically taking the cost of the

[00:08:49] media, the cost of the marketing people,

[00:08:50] the cost of the salespeople and dividing it

[00:08:52] by the total number of closes.

[00:08:53] Right?

[00:08:54] That way you can actually attain your

[00:08:55] customer acquisition costs because of the

[00:08:57] numbers you have above.

[00:08:58] You can add them all together.

[00:08:59] You can figure out your lifetime value

[00:09:01] and then you can get the ratio between

[00:09:03] both as well.

[00:09:05] And because you have all those other

[00:09:06] numbers, you can also figure out how

[00:09:08] long it's going to take to actually

[00:09:09] pay back the customer acquisition

[00:09:11] cost in number of months if you have

[00:09:12] a recurring sale.

[00:09:14] Now, the last few that I'll hit you

[00:09:17] very quickly with is cost per sales

[00:09:19] qualified lead

[00:09:22] and the percentage conversion

[00:09:24] between MQL and SQL.

[00:09:27] So how many of the MQLs

[00:09:30] turn into an SQL?

[00:09:32] And it varies by industry, but you

[00:09:35] should be turning anywhere from 15

[00:09:37] to 50 percent of MQLs

[00:09:40] into SQLs depending on what

[00:09:42] industry that you're currently

[00:09:43] operating in.

[00:09:44] And then finally, percentage of

[00:09:47] MQLs that close, percentage of SQLs

[00:09:50] that close because you want to

[00:09:52] understand are those numbers

[00:09:56] converging in on each other over

[00:09:58] months?

[00:09:59] Are they getting further apart?

[00:10:01] What's going on?

[00:10:02] And then and then this is

[00:10:04] basically the introductory part of

[00:10:05] it. This doesn't help you make

[00:10:07] sense of the numbers quite yet,

[00:10:09] but we'll hit you with a part

[00:10:10] two later.

[00:10:12] As always, thank you so much for

[00:10:13] checking in till next time.