While SaaS companies are the best at tracking their lead generation metrics, every tech company should be measuring the effect of marketing on sales
It’s a battle. New Zealand software or electronics companies trying to sell products into offshore markets, where sales costs are too high and it’s expensive to recruit effective sales people, cold calling is not really working, and ultimately you are not achieving growth targets.
In response, many companies are implementing content-based lead generation programmes, supported by sophisticated marketing automation technologies like Marketo and HubSpot. These online systems provide sales and marketing managers with the ability to view customer behaviour and measure the effectiveness of their lead generation activity. SaaS companies have successfully been using metrics to drive their marketing programme for some time, but for companies with more complex sales cycles and field-based sales teams, metrics have been less clear.
The following are key metrics B2B tech companies need to manage and improve their lead generation programmes;
1. Website visits
The number of people visiting your website each month (excluding your own staff and customers logging in). This metric measures the effectiveness of your inbound promotion – getting people to your website using SEO, paid search, social media and blogging. Website visits vary greatly by company and market, however companies selling complex B2B products should be achieving at least 2000 website visits per month to feed their lead generation programmes.
2. Online leads
The number of new marketing qualified leads generated per month. By marketing qualified I mean people that have provided their contact details (e.g. name, email address, company name), and potentially other simple qualifying information (e.g. company size and type), in return for valuable content or information downloaded from your website. Over time this metric can be refined and split into two; marketing qualified leads and sales qualified leads, as sales and marketing teams learn and further define the attributes and quality of leads most suited for immediate sales engagement.
All tech companies measure sales activity, but traditionally marketing teams have avoided being held too closely to a responsibility to generate sales opportunities. Marketing exists to make the sales process more efficient, and so sales needs to be a key marketing measure.
The source of website visits and leads (items 1 and 2 above), measures how specific marketing tactics are performing. Source can include direct (people typing in your URL to go to your website), organic search (using Google search), referrals (using links from other websites), paid search (AdWords and Remarketing), email (clicking through from an email) and social (clicking through from social media channels). New Zealand tech companies tend to have higher levels of paid search and lower levels of organic traffic, often a reflection of weaker brands in their target markets. A recent HubSpot survey measuring the traffic sources from 15,000 B2B companies globally, showed the following average website visit source metrics;
% of website visits
5. Visit-Lead and Lead-Deal ratios
Including a sales funnel ratio enables you to understand how well marketing is performing throughout the buying process. For example, for a Kiwi hi-tech company selling a complex B2B product you would expect website visits of at least 2000 per month, which generate at least 50 new leads. A Visit to Lead ratio of 1:40. A higher ratio can mean poor conversion occurring on the website, potentially due to low value content, unclear call to actions or weak landing pages.
6. Lead engagement
For companies selling complex B2B products, there are problems trying to measure marketing’s contribution to a sale. What contribution did the ‘online lead-gen system’ make to the sales process? What involvement did whitepapers, case studies, or product demonstration videos have on the sale, compared to the personal engagement of sales personnel over the last 12 months?
Concentrate has developed a metric to measure ‘online engagement’ by assigning a high, medium or low engagement score to each sales prospect depending on their level of online activity over time. A key metric to understanding marketing’s contribution to sales is the average lead engagement score for new customers. For example, during the last quarter, 75% of new customers had at least one person highly engaged with your company online.
Metrics by themselves only work if you set a goal for each. Without goals, metrics simply measure your past performance, rather than helping you understand what needs to be done in the future to achieve your growth goal.
Where can you start? Ensure you have Google Analytics on your website and track traffic and sources of traffic every month. Once you understand these dynamics you can start looking at introducing more elements of marketing automation.