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

[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.