Top 10 KPIs for B2B Revenue Teams

Perhaps the best we can do with measuring marketing performance ROI is to employ the age-old statement made by John Wanamaker more than 90 years ago, "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

Hopefully, we can do better than Wanamaker with our modern tools such as marketing automation integrated into CRM or the ubiquitous spreadsheet with pivot tables. When evaluating data to determine KPIs, at some point, someone has to decide how to attribute a closed opportunity. If the last touch before a closed opportunity was a trade show, does that mean the revenue should be associated with the trade show? In this modern age of buying behavior, we can never really know, nor should we try, to attribute revenue to one particular source. Thus, are we back to a modern version of Wanamaker's interpretation?This is not to say we should not bother to measure. Rather than basing decisions on a rigid revenue attribution model, I suggest marketers rely on trends and benchmarks.

These are my top 10 key performance indicators (KPIs) for evaluating the performance of marketing and sales strategy and tactics. The first 5 are meant to be the metrics you use when presenting results to the external (external to the marketing team) stakeholders. The second 5 are meant to be used internally by the marketing team in evaluating activities, promotions, events, campaigns, etc.

KPIs to use when presenting to C-suite stakeholders:

1. Net Contribution - This is the best measure of marketing and sales effectiveness. Do not mistake net contribution for an absolute ROI. It is a perfect measure of efficiency and the trend tells the C-suite how the overall strategy and tactics are driving revenue compared to overall spending.
   
   Net Contribution (%) = [(sales revenue - COGS) - (cost of sales+marketing)] / [sales revenue]
2. Marketing Contribution to New Opportunities - This is a measure of the number of new opportunities that were influenced by marketing activities. You could also use projected revenue as the benchmark. The attribution model must be agreed to before this becomes a meaningful metric.
3. Marketing Contribution to Closed-Won Opportunities -  This one is a great benchmark! Again, you must have an agreed to attribution model for this KPI to be effective. Look for trends. You can use the number of closed-won opportunities or you can use the revenue amount.
   
   For example, if the sales team closed 100 opportunities worth $100,000 last month and the marketing team can show that marketing activities influenced 50 of those, your monthly benchmark would be 50 or in the case of revenue, it would be $50,000. Variations of this KPI could also be correlated with other specific marketing metrics like impressions, emails sent, etc. to indicate the general effectiveness of marketing activities.
4. Count of Marketing Qualified Leads (MQL) - Before you can use MQL as a KPI, the teams must agree on the definition of a marketing qualified lead. The net number of leads passed to the sales team is an important measure of success for the marketing strategy and tactics. It is a metric that the C-suite is usually interested in.
5. Revenue per MQL -  This KPI also relies on an agreed to attribution model. Simply divide the total sales revenue by the number of MQLs. You could create another KPI that measures revenue per SQL (sales qualified lead). Both ways would require a solid agreement between sales and marketing on definitions and how the teams will specify the status.

Always talk to your C-suite stakeholders about revenue-based KPIs. They don't care about clicks, open rates, form conversions, or other marketing tactic metrics.

NEVER volunteer cost metrics to the C-suite! If you use 'cost per' metrics for your executive presentation, don't make this your signature KPI model. If you consistently talk about cost metrics such as cost per lead, cost per new contact, or cost per booth visitor, you, your budget, and your team will become embedded in the company culture as a big expense. And, we all know what gets cut first when times turn tough.

Cost metrics are most appropriate and essential to measure sales and marketing performance. Keep these metrics internal to the teams.

KPIs to use with the sales and marketing team stakeholders:

Cost per new contact - This is the total expenses of sales and marketing divided by the number of new contacts created. You can modify the amounts as needed such as to include or not include cost of travel or cost of salaries. The key point is to watch the trend from month to month.

Cost per lead - This is the cost per qualified lead. Use the same cost amounts and the same formula you use for cost per new contact. You will have to make a decision on the definition of a lead.

Cost per Click (CPC) - Divide the total cost of marketing spend by the number of clicks on ads or emails. CPC is a good measure to benchmark the cost of engagement with emails or ads. It is the best measure to compare any of the myriad marketing digital activities to each other. After a while, you'll be able to reject activities that don't meet your benchmark and do more of those that exceed your benchmark.

Cost per Thousand Exposures (CPM) - Divide the cost of an ad by the number of views and muliply by 1000. This is a good measure to determine reach. Cost per click and cost per thousand exposures should be considered together when evaluating the results of activities.

Click through Rate (CTR) - Another good benchmark for comparing the effectiveness of materials and venues. The CPC, CPM, and CRT together help the marketer make decisions about effectiveness.

Funnel conversion metrics - MQL to SAL to SQO to Closed/Won and other relevant conversions.

Revenue/Cost per attendee - These are good specifics for evaluating the effectiveness of events like trade shows, conferences, or seminars. Be cautious of making binding decisions based only on these metrics. There are likely to be intangibles that should be considered such as the salesperson's opportunity to see multiple customers and prospects in a short span of time.

Naturally, your particular business or organization may require different metrics depending on what you are selling. For example, those firms that are selling subscription services may track annual contract value and churn rate.

Final advice; avoid vanity metrics or metrics where the only purpose is to help you and your marketing team feel better about yourselves. An example of a vanity metric could be Facebook 'Likes', LinkedIn post views, or email open rates.