How Digital Strategies Support B2B Revenue KPIs
I recently had the opportunity to share thoughts on a webinar about how digital strategies contribute to organizational objectives with Michael Spinosa, President of Unleashed Technologies. As a fractional CMO, this subject is vitally important to me and my clients and should be to most companies, especially in the B2B space.
There are plenty of good reasons for KPIs but in my opinion, the best reason is to align the behavior of individuals and teams to the company objectives. Properly structured, KPIs remove the ambiguity about who is responsible for what and when. They also contribute to an alignment between departments because they encourage synergy and mutual support – and this alignment is particularly important between the sales and marketing organization.
Organizational KPIs include items like revenue, profitability, customer retention, and operational efficiency. Marketing and sales department KPIs should be set by a formal planning process I call the Lead to Revenue (L2R) Framework. Starting with revenue and profitability targets, we work backward all the way to what needs to be done to create awareness. The plan that contains the KPI metrics is shared in a Service Level Agreement (SLA) document, which is blessed by the CEO and executive team.
The L2R plan is customizable to your company but usually includes items like website visitors, fresh inquiries, qualified marketing leads, sales opportunities, number of new sales, average sales price, pipeline coverage and average sales cycle. Your digital strategy can have an impact on every one of these metrics. While there are dozens of other measurements that can be added to this list, keep in mind that we marketing and sales professionals are judged (or should be) by our ability to attract, educate and sell stuff to prospects, not to produce meaningless reports. It bears repeating that if the data is not actionable, do not collect it.
When you consider how your digital strategy can support the organizational revenue KPIs, keep in mind that this can vary greatly by various selling models. Enterprise, in-person, telesales, online, and channel models have widely different metrics in terms of allowable cost per transaction. For example, online selling usually has a low transaction cost but probably lower margins. In this case, your digital strategies need to focus on quantity. By contrast, an enterprise sales model has very high transaction costs but hopefully a much higher margin. Quality is critical here – perhaps in an Account Based Marketing approach. In the channel scenario, the KPIs may be structured around a one-to-many model, where your objective is not to attract end-users but rather to provide sales enablement support for your channel sales managers.
How Digital Strategies Can Transform an Organization
Digital marketers get to play with a lot of cool stuff like websites, social media, cyberspace, search optimization, and so forth. However, be aware that the perception of some CEOS and sales leaders is that digital marketers create a level of noise but are not necessarily spending time on activities that contribute to revenue. The reasoning goes: what do all these blog posts do for us, how about all that content? Why do we need a LinkedIn or Facebook page? What the heck is SEO and why should we care?
This is a trap for marketers because some of the individual activities cannot be linked directly to revenue. However, collectively they do contribute and you need to demonstrate how this works. When you don’t have the micro details, make sure you have the aggregate numbers for each stage of the marketing and sales process.
Not from day one, but over time, digital pull marketing techniques can produce leads at one-half to one-third the cost of push marketing. These details should be spelled out in the L2R plan where you are essentially saying to company executives: “I spend X dollars on marketing outreach and after a series of steps, a sufficient number of these suspects become prospects and then customers.” This is how you change the perception of the digital/marketing teams from one of “completing activities” to “contributing to revenue”.
Digital strategies that contribute directly to organizational objectives are always well received and the converse is also true. Digital strategies are not just about the 3 holy grails of sales and marketing: awareness, leads, and revenue. They can also support the streamlining of business processes and improving customer engagement touchpoints. One of our clients had a process where sales reps took up to 48 hours to contact suspects who opted-in for an online offer. By building a simple auto-response program, we boosted the qualified lead count by over 40%.
Likewise, when prospects go to a website and have difficulty finding information, either because it is not there or because the navigation is poor, sales and goodwill are lost. Simply posting the right content that is easy to find can have a strong revenue impact.
A final example comes from my painful experience in assembling furniture when we recently moved. The paper instructions seemed to be written by someone with sadistic tendencies. I actually returned a very large item because I could not figure the instructions out, either on paper or at the company website. Perhaps this illustrates my mechanical ineptitude but an effective digital strategy would include a link to a YouTube video with hands-on instruction. This not only prevents costly returns but can also be used to encourage the purchase of additional related items.
These examples are just a few of the many ways that digital strategies not only support corporate KPIs but also drive culture shifts. And the biggest and dare I say transformational shift, is transitioning from a culture of activity (doing lots of stuff), to one where the culture is results-focused.
Note: this article originally appeared at CustomerThink.com Dec 5, 2020.
- How Digital Strategies Support B2B Revenue KPIs - January 5, 2021
- End of Year B2B Marketing Planning: How to Make it Count - December 9, 2020
- CMO Bravery – an Underrated Virtue - November 9, 2020