Demand generation should be a holistic approach to optimizing the conversion and sales cycle. This way, you can form strong relationships with the right prospects. At the core of demand generation is measurement and testing. This is vital because, to quote Lewis Carroll, “If you don’t know where you’re going, any road will get you there.” Certainly there are many metrics that can send you down a rabbit hole. When you track the right data, you can measure the effectiveness of your demand generation campaigns, understand your ROI and find ways to achieve growth.
What to measure and why
Here are the metrics that matter most and why they are helpful in optimizing conversions and sales.
Closing percentages. This is a valuable metric, especially for B2B organizations. The formula is rather simple: the number of deals closed divided by the number of sales proposals multiplied by 100. This will reveal not only how your sales team is doing, but also indicate the performance of marketing and customer success teams. You can see where strengths and weaknesses are within the funnel and reveal the effectiveness of qualifying and nurturing leads.
Funnel conversion rates. Because this metric focuses more on the middle of the funnel, it is sometimes overlooked. Don’t skip this important metric. It helps identify how well things are handled in the middle, including how well your teams provide content and pass along qualified leads to sales. You can see the percentage of marketing qualified leads (MQLs) that convert to sales qualified leads (SQLs) and how SQLs turn into meetings that nurture the relationship and convert customers.
Cost per acquisition. Abbreviated as CPA , this metric will show how successful your business is and help redefine goals for campaigns. To see if time is well spent and profitable, divide the cost of generating a lead (marketing expenses) by the number of customers acquired during the period you set.
Cost per lead. Most marketers are familiar with CPL. This will provide information on the value of a persona and how it relates to the target criteria. This provides insight on how to tailor the content or fine tune the message in the campaign. Also, if there is something preventing conversions, this metric will help reveal it.
Conversion to MQLs. MQLs are different than simple leads. These are prospects who express greater interest in your business because they have engaged with content and have provided their information. If your goal is to generate new leads, this metric is much more effective to analyze open rates, instead of simply looking at them. But remember, MQLs may be interested, but not ready to fully commit. What you do with a successful MQL will also be important: Explore MQLs to SQLs.
Average deal size. This metric is the average sales price or dollar value of each closed-won deal and it will vary depending on industry. It is beneficial in a few ways. It provides an overall view of the health of your cycle and you can see opportunities outside your typical deal size. You can then flag larger or smaller ones so you can appropriately prioritize, target and manage those deals accordingly.
Lifetime customer value. You find this metric by calculating the amount of profit a customer provides over the lifetime of their relationship with your business. This reveals insight into the success of customer engagement, quality of account management and closing deals. Understanding this metric allows you to segment customers into the most profitable groups, optimize spending on the most effective acquisition channels and help you keep high-value customers with the appropriate retention decisions.
Get the most from your measurements
Once you begin to analyze the right metrics, you can take steps to optimize your efforts. At AccelSocial, we help corporations with strategies throughout the sales funnel. To learn more about demand generation or the ways we can assist through performance-based advertising solutions, explore our website.