One of the hardest things for marketing teams to do is to prove their worth. B2B marketing teams don’t normally tie their actions to revenue because, while we gather information on interested buyers, we don’t close the deal. That needs to change.
Most companies run on a final-touch attribution model, giving revenue credit to the sales executive who converts leads into opportunities and opportunities into closed/won deals. That’s great for the sales executives, but a fairer model would be to spread out a little of the revenue attribution to all steps in the process, and give marketing some credit for their part in the revenue cycle.
This article will teach you how to set KPIs that show the value of lead generation and other marketing practices, and how to tie those activities to actual revenue generation. We’ll look at setting goals, understanding the value of traffic and leads, setting KPIs to reach your goals, and how to follow up. For the purpose of simplicity, this article will focus on setting goals and KPIs for your website traffic.
Jump right in and set big-rock, unmovable revenue goals for the marketing team. Dream big! Ideally, your big goals would come from the company leadership, but if you can’t get them on board, set them for your team. Your first goal to work toward might be increasing the revenue you can attribute to the website.
To set a revenue goal, forecast based on previous years. Ask yourself what an achievable but difficult-to-reach revenue number would look like for the coming year. For example, look back at your total revenue for the last 3 years, if you’ve got it. What has been the year over year (YoY) revenue change? Take that average and push it a little, maybe five percent. That’s your goal increase. Then multiply your latest year’s revenue by the goal increase rate, and add that to your latest revenue numbers. In equation form:
(latest year’s revenue x goal increase rate) + latest revenue numbers = revenue goal for coming year
When you get a reasonable-yet-attainable goal, write that big goal down. Paint it on the wall. Frame it on your desk. This goal is permanent, and everything you do works toward it.
The KPIs you set will help you get there.
Measure website traffic and leads
Your website is owned media. You control its appearance, content, user experience, and lead capture. While you may have other channels like social media or search ads that bring in a lot of leads, your team shares control with the owners of those platforms to promote your company. Sharing content control with another company can improve your reach, but it also complicates the ROI of those channels. Let’s ignore them for now.
Your website produces some of your most valuable leads because you have control over how those leads convert and how you use their data. Also, these visitors are at least aware of your brand and have some measure of purchase intent.
Most importantly, you should already have some sort of tracking set up for your website. Whether you use Google Analytics or another website tracking tool, use the information that this tool gathers to help you understand how much traffic you already get to your site and how many leads you would produce if everything stayed the same.
Find the value of your leads and traffic
You’ll want to set goals and KPIs for all of your marketing channels to accurately measure their growth but start with your website. While figuring out your KPIs isn’t easy, it’ll be simpler to do on a single channel that you own first. Then you can build the KPIs out to the other channels that you use.
Let’s figure out how valuable your site traffic is. Each of these items will help you make KPIs to achieve your goal. If you’re like me, you may want to write down the math you did to calculate each of these KPIs, and use that math to build yourself a dashboard.
Total number of leads per quarter
Count the number of leads you got from your site in the last quarter. Add this up either from your CRM, if your sales team tracks where the leads come from, or from your website analytics tool.
Total site traffic per quarter
Count the amount of traffic your site saw in the last quarter.
Site visits per lead
How many site visits do you need to get for one lead? Divide the site visits by your number of leads.
Value of each lead
How much money do you make off of each lead? Divide lead-attributed income by number of leads.
Value of every site visit
How much money do you make off of every site visit? Divide lead-attributed income by site visits.
Conversion by lead source
This is really important to understand which channels perform the best. Check in your CRM or your website analytics tool to see which of your referral channels produces the most leads. You can use this information later to decide where to focus your next efforts.
Use your traffic and lead values to set KPIs
To increase your revenue, increase your traffic, right?
Well, yes and no. Increasing the number of visitors to your site may increase your opportunities, but that correlation isn’t always true.
In order to increase your revenue, you need to focus on the traffic that you can tie to revenue: hand-raisers who self-identify as interested in your product and your lead-to-opportunity pipeline.
Instead, track the number of leads and the number of opportunities you get. Set lofty but achievable goals around leads and opportunities, and make these your KPIs. Just like your revenue goal, try to make your KPIs measurable and time-based. For example, you might set your KPIs as:
Sample KPI: Increase the number of leads per quarter from 2,000 to 3,000
Explanation: This is a good KPI for someone on the marketing team who writes content, manages the email list, or designs the website.
Sample KPI: Increase the number of opportunities per quarter from 1000 to 1800
Explanation: This KPI is appropriate for a sales executive or rep who follows up on leads and schedules sales meetings.
The number of leads and the number of opportunities are metrics you can put on a dashboard and check on every day. Do that. Make sure your KPIs live near your goals. They are inextricably tied, so visually tie them together, too.
Tie behavior and strategy to KPIs
Now that you have your KPIs, sit down with the team and brainstorm the activities and behaviors that will improve your chances of achieving those metrics. Consider actions you know directly impact increasing opportunities for sales:
- Marketing sets up and tests two new drip campaigns per month
- Marketing team tests new CTAs on blog posts
- Marketing writes and tests new landing pages on lead generation assets
- Each salesperson schedules 15 appointments a week
- Ops tests implementing an appointment-setting app on the website
Once you have decided on the actions that will move the needle on your KPI, turn those into personal KPIs for each of the team members. Decide who will take ownership of each KPI, and how other team members can contribute to its success.
Talking about KPIs with leadership
Base each goal and KPI conversation with your leadership in terms of how your team contributes to the overall revenue, and your actions to improve those metrics. Marketo suggests that you steer clear of cost discussions except when absolutely necessary. Focusing on the cost of your efforts tends to frame marketing as a liability to the company rather than a contributor to the revenue.
I realize that not everyone has the ability to drive their team strategy or company goals. However, if you can come to your leadership with a measurable plan, you’re more likely to succeed.
No matter how well planned your KPIs and goals are, without consistent support and follow-up, you will lose sight of them.
I recommend that you build dashboards of some sort to track your progress towards your goals. Consider these ways to make your goal and KPI progress available for public accountability:
- An automatic data visualization dashboard that updates itself from website analytics and/or CRM data
- Whiteboards in the common area of your office
- Poster board tracker by your desk
However you do it, make it a point to check in on your goals every day and hold a 15 minute stand up meeting to understand team progress toward those goals.