You’d think there were only a handful of metrics that serve as the primary indicator of success for marketing teams. There are dozens of leading indicators but only a few primary indicators such as revenue and pipeline generated, right?
Not necessarily. According to Bizible’s survey of over 300 B2B marketers There were roughly 12 different metrics submitted by survey takers when asked, “What’ do you use as the primary metric to judge success?”
To better understand how marketers do marketing measurement we first review the variety of metrics reported and then dive deeper to explore why marketers choose these metrics.
Surprisingly, we find there isn't any correlation between the type of primary metric and firmographic traits, such as company size and annual revenue generated. And there isn't a correlation between the seniority of the marketer and their primary success metric.
This means that B2B marketers choose a variety primary success metrics based on some other reason. Perhaps, based purely on personal preference or company preference.
A List Of Metrics Use For Marketing Measurement In Today's B2B Marketing Teams
In our survey there were roughly 15 metrics identified by B2B marketers including:
ROI: Marketing return on investment defined as revenue minus marketing spend
Revenue influence and pipeline influence: Marketing touchpoints with revenue credits applied with an attribution model
Net new customers per month
- MQL to SQL conversion rate
Cost per SQL (CPS): Deeper in the funnel than cost-per-lead (CPL) if leads are defined as a form fill without grading or scoring.
Cost of sale: Percentage of revenue vs cost of acquiring customer
Number of demos booked
Direct contribution to pipeline: Opportunities with revenue credit applied crediting marketing
Cost-per-acquisition (CPA): Cost-per-action such as clicks, downloads, and interactions
Total number of leads
Win rate: In this post we refer to win rate as impressions won over total impressions bid on, used in programmatic media buying. Other marketers may refer to this as the rate of opportunities who become customers.
There are many here and to gain a high level view let’s categorize and roll them up into a summarized form based on funnel stage.
When we roll these metrics up it requires us to make some judgments as to the order of the metrics. For example, we believe that ROI is a higher order metric because it's deep in the funnel and a small change in ROI can have big effects on the bottom line compared to a small change in revenue.
Similarly, cost-per-lead (CPL) is a metric that is deeper in the funnel compared to cost-per-acquisition (we use the programmatic ad buying definition for “cost-per-acquisition,” which is essentially paying for impressions) and so it is ordered higher than lead cost-per-acquisition (CPA).
We find that a higher percentage of B2B marketers use deeper funnel metrics like opportunities generated, revenue and ROI. But we also see a dichotomous pattern, i.e. marketers either use bottom of funnel metrics (to the right of the chart) or top-of-funnel metrics (to the left of the chart).
What might explain this?
To explore why certain marketers use top or bottom-of-funnel metrics as their primary measure of success we look at correlations with firmographic and demographic characteristics of our survey respondents. These traits include job seniority level, marketing budget size, annual revenue, and company size (employee count).
We code our primary marketing metric variable based on funnel depth, turning it into a numeric variable.
So a top-of-funnel metric like CPA gets turned into a 1 and revenue gets turned into a 6 (because it is deeper in the funnel and higher order). Essentially, large numbers correspond to deeper in funnel metrics.
We do the same for marketing budget size, turning it into a numeric variable, e.g. smaller marketing budgets get transformed into a 1 and larger budgets get transformed into, for example, a 5.
We now run some correlations to see if larger marketing budgets, larger company sizes, and higher job title seniority level correlate with the use of deeper in funnel metrics like revenue and ROI.
The question is whether marketing metrics used is somehow related to firmographic or demographic traits like job level seniority.
This would be a signal that as a company grows or as a marketer advances in their career they begin to use deeper funnel metrics like pipeline and revenue.
Why B2B Marketers Measure Performance The Way They Do
Below is a correlation matrix that shows correlation levels between our variables. The size of the circle corresponds to significance level while the darkness of the circle represents correlation strength. Darker blue corresponds to a strong, positive correlation, while darker red corresponds to a stronger negative correlation.
To find the correlation of interest, simply select two variables, one on the column and one on the row, and find where they intersect. We can see that there is essentially no correlation between marketing metric used and firmo-demographic traits in the bottom row.
There is a tiny correlation between job seniority level and marketing metric used. This suggests that senior level marketers use deeper in funnel metrics like pipeline and revenue.
Although this makes sense, more investigation is needed as the correlation is weakly positive.
This could be to a number of reasons there is a lack of correlation between the variables.
The coding of marketing metrics may be slightly off as metrics like win rate may have different meaning to different marketers. Another possible reason is that the primary metric used to measure success depends on personal or company preference and there is no pattern among company size and marketing budget size.
B2B marketers use a variety of metrics to measure their success. Their north star or primary metric also varies and it is unclear how they choose. Many choose revenue and ROI which is great to see, while others use top-of-funnel metrics like clicks and leads when doing marketing measurement.
At Bizible we champion using deeper funnel metrics whenever possible. Our State of Pipeline Marketing report finds that many B2B marketers do indeed focus on the bottom-of-funnel.
Download the entire report below to learn more.