Updated: December 12, 2022
When a B2C company wants to track a metric, they look to the basics: customer acquisition cost, sales conversion rates, average order values, revenue by traffic source, cart abandonment rates, etc. Of course, B2Bs look at these metrics, too. This is especially true now since we’re seeing a trend of B2C and B2B marketing strategies converging due to the increase in digital consumption – including social media interaction and online search – in the customer journey.
Even so, the enterprise and consumer experiences have yet to merge into a single commercial transaction. That means they’re still fundamentally different. So, if you’re a B2B tech company, you must look at specific metrics and key performance indicators (KPIs) that are unique to your operation and that provide deeper insight into the efficacy of your marketing strategy. We list the most vital of these metrics below.
What’s the difference between a metric and a KPI?
People – even marketers – tend to use the terms “metrics” and “KPIs” interchangeably. However, there is a difference between the two. The difference between the two is “key.” Metrics measure performance while KPIs measure key performance, based on strategic business goals. If you’re simply tracking marketing measurements with no set objectives, those are metrics. Once you start analyzing those measurements against your business goals, they become KPIs.
How to measure brand awareness
Metric: Web visits
This kicks off the list because there are several reasons why web traffic is a crucial metric. Say you’re a startup tech company that wants to boost brand awareness. Well, web traffic is going to act as a barometer to offer tangible insights as you grow. And attracting this new traffic goes hand-in-hand with your marketing initiatives. If you’re a tech company looking to direct more visitors to your website, then web traffic is the metric you’ll want to focus on.
KPI: Cost per visit (CPV)
The KPI you need to look at to see if your marketing efforts are meeting your brand awareness goal is CPV. To determine this, divide the cost of your monthly marketing spend by the number of monthly visitors to your website.
Understanding your CPV will help you set clear goals regarding just how much you’d like to spend per customer, whether that’s one dollar or 10 cents. You’ll also track this KPI over the long term. Look at how your marketing spend has affected site traffic over the previous few months. This will help you to bring down your CPV by a few cents each month.
One final thing to keep in mind is that any new website visitor will land right at the top of your sales funnel. A visitor that takes action – such as signing up for your email list – becomes a ripe lead for nurturing. This brings us to our next point.
How to measure lead-volume efficiency
Metric: Number of leads
So you’ve got new visitors to your website and some of them are engaged. They’re clicking on CTAs, signing up to receive emails and reaching out for more info. That means it’s time to begin nurturing your relationship. Understanding this consumer behavior will tell you whether you’re dealing with qualified leads or not.
KPI: Cost per lead (CPL) or cost per qualified lead (CPQL)
CPL is a crucial KPI for measuring lead-volume efficiency. The basic CPL formula is your marketing spend divided by the number of leads you generated from all those new website visitors we mentioned above. Let’s say your digital ads cost $5,000, generated 5,000 new website visitors, and 200 of those visitors took an action and became a lead, then you’re spending a little more than $25 per lead ($5,000 / 200 = $25).
But you can also go deeper and determine your CPQL. Defining which leads are qualified and which aren’t varies from industry to industry and business to business. Lead scoring hinges on the points system your organization assigns to the actions a lead takes. Therefore, after taking into account all those sales calls, consultations, webinar signups, product demos, etc., the CPQL for your tech company is likely to be much higher than your CPL.
How to measure the cost of customer acquisition
Metric: Number of conversions
How much does it cost to acquire new customers? This goes to the heart of conversion, which is the key metric that unlocks the final door regarding ROI. To this end, the number of conversions is a metric you’ll want to track.
KPI: Cost per conversion (CPC)
To understand the cost of customer acquisition, you need to look at your cost per conversion (CPC). A KPI like this is going to clue you in to how efficiently you’re acquiring new customers. Determining this is a simple formula that involves dividing your marketing spend by your number of conversions. This KPI is most important when you’d like to see how well a specific CTA offer on your website is performing, or when you want to boost efficiency after optimizing the previous KPIs we’ve discussed.
How to measure your return on investment
Metric: Return on ad spend (ROAS)
Revenue—that’s the name of the game. All those sales strategies and marketing initiatives are geared toward one goal: boosting return on investment. ROAS is a ratio or percentage that can be a metric that measures the number of high-value actions or conversions against your total ad spend. Or it can be a KPI. If your goal is to improve your ad performance or reduce marketing costs, you want to increase your ROAS.
KPI: Return on investment (ROI)
ROI gets right to the heart of things, telling you the amount of money you generated based on how much you invested. It evaluates direct ad spend in addition to time, resources and other internal costs. This is a great KPI to measure short-term marketing initiatives like PPC ads. However, it may not be the most crucial one to look at to gauge the success of more protracted initiatives, like website and mobile app redesign, because tracking ROI takes much longer in these instances.
There are ways to further optimize the revenue metric. For example, you can look at yet another KPI, Average Order Value (AOV). The KPIs discussed above will tell you how much you’re paying for qualified leads and customers but looking at how much each customer spends per order will tell you even more. Maybe you’re nervous about spending a thousand dollars to acquire a new customer; however, if each customer is spending an average of two thousand dollars, then you’re looking at a 200% ROI, and that makes it worth it. That’s the kind of insight KPIs like AOV can reveal.
Automate your marketing KPIs
Keeping track of your marketing metrics and KPIs may sound complicated but there are many marketing automation tools to help you with the task. For example, Google Analytics and Salesforce gather your metrics and KPIs into dashboards so you can visualize how your marketing efforts are performing against your goals. When you align your marketing technology (martech) stack with a tool like HubSpot or Marketo, you can gather, calculate and analyze your KPIs in one place, and download them to a spreadsheet or a PowerPoint.
Measure your performance against clear marketing goals
More than anything, let your overall goals drive your marketing strategy. Looking to generate more web traffic? Do you need to increase signups for a product demo or webinar? Are you simply trying to boost brand awareness? Setting clear goals will tell you exactly which metrics to focus on and which KPIs reveal with pinpoint accuracy how your initiatives are paying off.
With over 20 years of marketing experience in the tech industry, Elevation can help you develop a marketing strategy and define actionable measurements. And wContact us to learn more regarding how our marketing services can benefit your tech business.