Key performance indicators (KPIs) and return on investment (ROI) metrics empower B2B marketers to show the value of their efforts. They also help them make informed decisions about marketing spend. In this post, I’ll explain what KPIs and ROIs are, how they work and how to use them.
What are KPIs in marketing?
KPIs are measurable metrics that track your progress toward meeting marketing goals during a specific period. They answer the question, “Are we doing the right things?” Tracking performance helps you justify spending. Moreover, it helps you spot trends and areas for improvement. Then, you can adjust strategies and monitor how those changes affect your KPIs.
How often should I measure KPIs?
Tracking and reporting marketing KPIs regularly is essential. You may want to set up weekly, monthly, quarterly or annual reporting. Tailor your time frame to your business goals and marketing activities.
What do KPIs include?
KPIs should tie to your marketing objectives. Examples include:
- Website traffic: Measures overall interest in your brand and content, such as page views, session duration and bounce rates.
- Leads generated: Tracks potential customers who have shown interest. KPIs include lead value and quality, customer lifetime value and cost per lead.
- Social media engagement: Gauges brand awareness and community interaction, such as the number of followers, clicks and shares.
- Conversion rates: Measures the percentage of website visitors who take a desired action. Examples include making a purchase, registering for an event or signing up for a demo.
Customize KPIs for your audience
Different audiences want specific performance data. For example, your marketing team might want to evaluate how certain promotions and campaigns are performing. In contrast, your C-suite might prefer big-picture metrics.
“We highlight the metrics that matter most to our leadership and prioritize them accordingly,” says Allison Wagner, director, marketing and business strategy, at Morrison Container Handling Solutions in Glenwood, Illinois. “For them, it’s not about the KPIs; it’s about what the KPIs mean. We share the stats, but we interpret what they mean for our executives.”
For example, if Wagner’s KPIs show an increase or a decrease in website traffic, her executive team wants to know what the data suggests. Thus, she monitors and shares KPIs weekly, emphasizing marketing influence on revenue. This metric involves assessing how marketing efforts, campaigns and strategies contribute to attracting, converting and retaining customers.
“We look at influence on revenue more than anything,” she says. “My company understands that just because a lead didn’t come in through marketing, they may have had multiple marketing touch points that influenced them along the buying journey.”
The marketing team at Richfield, Wisconsin-based Felins tracks website visits, conversions, leads, opportunities and revenue attributed to marketing.
“We track KPIs monthly, and quantify what the data means,” says Victoria Sithy, senior marketing communications specialist at Felins. “We highlight trends and provide an analysis of what we’re seeing. We present the data and highlights to our team as well as leadership.”
Meanwhile, Casey Jeremiason, senior marketing communications leader at St. Louis-based BW Packaging, shows achievements and growth by tracking KPIs that include win conversion rate and marketing contribution to sales.
“In the past, I presented the data in a funnel view that showcases the number of ‘influenced people’ that we saw through social media, website views, etc.,” Jeremiason says. “In turn, this drove the leads that became our opportunities and ultimately, closed opportunities.”
This year, BW Packaging is focusing on three main KPIs that will reveal marketing lead effectiveness:
- Lead effectiveness: Opportunities ÷ marketing qualified leads (MQLs)
- Win conversion: Opportunities ÷ MQLs
- Marketing contribution: Measuring marketing influence dollar amount
What tools can I use to measure KPIs?
Popular tools for measuring marketing KPIs include Google Analytics and customer relationship management systems, such as Salesforce and HubSpot. These platforms automate and streamline data collection and analysis.
What’s ROI in marketing?
ROI is a metric that assesses the profitability of your marketing. It answers the crucial question, “Are we getting our money’s worth?” Therefore, use your ROI calculations to improve your campaigns and experiment to see what works and what doesn’t. The intel will help you produce the greatest returns for your B2B business.
For example, “I was able to show ROI for our paid marketing last year,” Wagner says. “It produced a significant amount in sales. We want to drill down as far as possible.”
Adds Jeremiason: “We’re doing the same thing. We’re being asked how much influence we had, even if someone wasn’t connected to a deal, but they’re part of the same company.”
What’s the formula for marketing ROI?
Here’s the calculation for marketing ROI:
(Gain from investment – investment cost) / investment cost X 100
For example, if a marketing campaign generates $100,000 in revenue and costs $20,000 to run, your ROI would be 400%. This means for every dollar invested, you gained $40 in return.
How often should I measure ROI?
As with marketing KPIs, your cadence will depend on your business model and goals. You can choose from weekly, monthly, quarterly or annual reporting.
The sweet spot: Combining KPIs and ROI
While KPIs track activity, ROI measures impact. The sweet spot lies in using them together:
- KPIs inform ROI: By monitoring key activities, you can identify which efforts are driving the most valuable outcomes.
- ROI validates KPIs: Seeing the financial return on your efforts justifies your investments and helps secure future marketing budgets.
Measuring what matters
Measuring your marketing performance will help you make informed, data-driven decisions with your strategy, campaigns and budget. Furthermore, by focusing on the “so what?” behind the numbers, you can show the true value of marketing and drive business growth.
