Time really does fly and the marketing world is no exception. By third quarter it’s likely next year’s marketing plan is already taking shape. If it isn’t, it’s time to kick it into high gear! While the US economic outlook is strong, some projections suggest it may plateau. Meanwhile, the manufacturing sector remains relatively robust and orders keep coming in. But with markets changing near-daily and technology advancing at a dizzying pace, it’s no time to take growth for granted.
To properly plan for future growth, it’s important to look at the past. In particular, analyze and leverage the historical business results from your existing marketing efforts. If you’ve adopted an inbound marketing methodology, your marketing automation, CMS and CRM software are invaluable tools that will help you to uncover this data.
Establishing your KPIs for the coming year’s inbound marketing plan without doing a review of recent marketing performance is like using Google Maps without a starting point. Understanding what your current marketing efforts are getting you in terms of business results today and how they’re contributing to overall company profits is the foundation of any solid annual marketing plan. If your CEO asked you today to start pulling together a report card for your YTD marketing performance, what would you report on and how would you determine its ROI?
Before we dive into KPIs, it’s important to first note that, on their own, each may not appear to provide much context for how you measure success. However, when looking at your overall revenue and new customer goals that will be tied to your inbound marketing efforts, you’ll be able to “work your way up the funnel” to determine how many SQLs, MQLs, new contacts and total traffic you’ll need to achieve those goals — and whether you’re on or off target.
Ah, yes, the funnel...
Should You Focus on the Funnel or Flywheel?
Yes. Seriously, though, the introduction of the flywheel vs. funnel at last year’s Inbound conference created some angst among marketers who embraced the HubSpot funnel methodology since inbound first came on the scene. The basic concept that customers should not be considered an “output” of the funnel has merit. Indeed, the sales cycle for any one customer should be just that — a cycle that is in perpetual motion and ideally repeats itself.
In the flywheel approach, customers are the energy and driving force that keeps your sales process moving. They are the very ones that help you grow your business through referrals, engagement, feedback and more. Your customers, in essence, become an integral part of your marketing efforts and aren’t just a target; they’re part of your team. With a flywheel approach, the “delight” phase becomes the power that fuels the “attract” stage.
Why mention the flywheel in an article about annual marketing plans, KPIs and goals? Well, if existing customers truly are one of your most valuable resources for attracting new ones, then your goals and KPIs need to align with this new reality. Truth be told, however, it’s a bit difficult to make the shift from funnel to flywheel in one fell swoop, and many organizations take a hybrid approach. After all, the key elements of the buyer’s journey and sales funnel still remain; you still need to attract, convert, close and delight.
The flywheel simply provides a framework for Marketing, Sales, and Service team alignment around the areas that will best grow the business by identifying opportunities to reduce friction and increase force throughout the organization.
With that in mind, here are some appropriate KPIs for assessing your current inbound marketing performance to help fuel future growth in the complex B2B world:
For most B2B businesses, a website is their single most important marketing property, so understanding how well it attracts new traffic is critical, as well as understanding how well it's performing at converting visitors into leads. With a flywheel methodology, it’s also crucial to assess how it’s engaging and serving existing customers. When it comes to inbound marketing, your website is your best salesperson and provides insights into customer behaviors like no other marketing or sales sheet ever could.
Your website should provide answers to questions your prospects have, when they have them, and how they want them. It should even answer questions they didn’t even know they had by educating, informing and guiding them through the decision process. When a prospect says, “Hmm, I hadn’t thought about that aspect before,” you’re doing something right and demonstrating your expertise. More importantly, you’re building trust.
You also need to consider ways in which your website can reduce friction for existing customers and continue to be a resource after the sale. Look at potentially creating Knowledge Base centers, adding conversational tools and ramping up the service-oriented sections of your site.
Marketing Qualified Leads (MQLs) generated through inbound efforts
MQLs are leads that meet all the requirements of attractive potential customers based on demographics, industry, job role or however you decide to qualify them. They’re interested in your content but are not quite ready to talk to you about a purchase. Yet. They need to be nurtured along the way to build trust in your brand until they decide your solution is the right one for them.
Your content and email campaigns need to guide them on their decision-making path. It’s critically important to track MQLs on your website, even if you exceed your overall site session goal because, if none of the traffic was qualified, you haven't really succeeded in impacting your business results.
Once again, consider the role that current customers play in attracting prospects and look for ways to leverage their influence and networks.
Sales Qualified Leads (SQLs) generated through inbound efforts
An SQL is an MQL that demonstrates an interest in talking to you with an intent to buy. They may have requested a demo or consultation, or even submitted a request for a quote or proposal (RFQs/RFPs). SQLs are also qualified through lead scoring which is determined by various online behaviors, such as the number of downloads, emails opened, events attended, forms completed, etc.
They're the leads your sales team wants: qualified and ready to buy! These are the types of leads that should be turned over to sales and who fit the profile of the most attractive potential customers by exhibiting behaviors that signal they won't be wasting your sales team’s time.
Consider Key Sales Metrics
Marketing and the sales team need to be on the same page and aligned in their efforts to identify, nurture and close qualified leads. The two ultimately share the same business goal: more revenue. So it stands to reason that some sales KPIs need to be considered in your marketing plan as well. As much as salespeople examine or critique marketing performance, it's only fair to look at how the sales team performed with the leads they were given. How many deals did they close that were directly tied to your inbound efforts?
While closing effectiveness is influenced by many factors outside marketing’s control, a closing rate can indicate whether your sales force is well equipped to deliver and demonstrate the promise. To better understand how sales KPIs impact the top-of-funnel marketing activities, track sales conversion rates such as SQL to Opportunity, Opportunity to Proposals, and Proposals to Closed-Won rates.
If you don’t already have a marketing and sales service level agreement in place, we strongly recommend drafting one before you begin executing next year’s plans, as it will align your marketing and sales teams to achieve business results.
Here’s an example of overarching inbound marketing KPIs that contribute to lead gen objective. Say one of the business goals is to produce $10M in new revenue from inbound marketing and your average new customer/project revenue is $1.1M. Based on that, you’d need to close 9 new customers in 2020, or 0.75 new customers per month.
Look at your conversion rates to identify how many website visitors, leads, marketing qualified leads (MQLs), sales qualified leads (SQLs), and opportunities you need to satisfy the customer goal. When you’re done, your KPIs might look something like this:
Results are what you and your boss care about most, and the only way to determine those results are with metrics that matter. There’s more to cover on this topic, so be sure to check out our free guide below. Armed with the power of facts and solid conclusions, you'll be better equipped to set meaningful strategic performance goals for next year’s marketing plan.
Posted by Amanda Retzki Amanda Retzki is an Inbound Consultant at Weidert Group. Well-versed in digital marketing, Amanda assists in developing insightful, detailed and collaborative inbound marketing solutions for clients in a variety of industries.