10 Critical B2B Sales and Marketing Metrics – Part 2

In my last blog post, I talked about the first five of the 10 most critical B2B marketing metrics.  Just to recap, they are:

  1. Cost per new inquiry
  2. Conversion of inquiries to qualified leads
  3. Cost to acquire a new customer
  4. Cost per new dollar of revenue.
  5. Sales and marketing cost as a percentage of total revenue

And here are the next six key metrics:

6.   Conversion of qualified leads to opportunities: Once a lead has been qualified, it is up to the sales rep to convert it into a workable sales opportunity. Ratios for this metric can range from 20 to 50 percent.

7.   Opportunity close rate: This number is calculated by dividing the total number of sales in a given time period (e.g. quarterly or monthly) by the total number of opportunities created.

8.   Ratio of pipeline coverage to revenue: This statistic is closely related to the opportunity close rate and refers to the amount of potential revenue in the pipeline needed to achieve a specific revenue target. For example, if your revenue target is $1 million and you need $4 million in pipeline deals to make this happen, your pipeline ratio is 4:1.

9.   Average sales cycle: This number refers to the average amount of time it takes from first contact with a prospect until the deal is closed. The average sales cycle can range from minutes with e-commerce products to a year or more with large ticket enterprise sales.  Effective B2B companies understand how to move prospects through the sales process in a streamlined manner.

10. Average deal size:  Increasing your average deal size is a great low-cost way to improve your revenue picture. This will largely be outside the scope of the marketing department, but you can certainly help your sales colleagues by providing sales support and enablement tools.

The following graph gives you an example of how these numbers come together to provide a holistic view of your sales and marketing metrics. One important thing to note is that a change to any one of the individual data points will impact overall performance.  Good marketers look for the weak links in the end-to-end process and make sure the entire operation is streamlined.

 

 Marketing Metrics

Important Marketing Metrics

 You have the opportunity to improve that which you measure. Use the above marketing metrics as a starting point, adjust as necessary to fit your circumstances and start reaping the benefits.

 

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Christopher Ryan

Christopher Ryan has 25 years of marketing, technology, and senior management experience. As both a marketing executive and services provider, Chris has created and executed numerous programs that build market awareness, drive lead generation and increase revenue.
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2 comments

  • Kim Trebold August 23, 2013   Reply →

    Thanks for the great discussion on marketing metrics and the reminder that we are only as strong as our weakest link.

  • Myron Berg August 29, 2013   Reply →

    Certainly there’s a lot of value to Marketing and Sales in measuring metrics to improve results. These key metrics give a comprehensive view into the sales pipeline.

    But I believe equally important is that this impact this type of information is extremely important in running the business. Besides showing ROI for various initiatives, it helps prioritize budgets, campaigns and resources to improve revenue performance.

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