In this era of marketing metrics and measurement abundance, it’s easy to get lost in the data. Most marketing teams track and report on every possible customer interaction. But what if software only allowed you to measure one thing...
One Metric to Measure
If you could only measure only one thing, what would that be? On the surface, it’s a simple question that warrants a simple answer. But think about it for a moment. Do you really have a simple answer? More important than answering what you would measure, can you say what metrics you would be willing to give up?
You may find that this exercise helps you distil what’s really important, while also uncovering issues to determine your organization’s goals and focus.
Therefore, I took the liberty of outlining what I think is the magic metric for B2B marketers and their sales teams based on the different roles within an organization.
This is a simplistic view of the marketing-sales structure in a B2B company, but simplicity helps with clarity. The rule of thumb for answering the one metric question is that your primary metric is what you need to deliver – your goal. If you’re tasked with delivering qualified leads, then your one-metric should be qualified leads, the rest should be considered KPIs that aren’t worth keeping on your lifeboat.
Direct Sales – Revenue
As the unit tasked with driving the revenue engine of a company, direct sales needs to worry about only one thing – revenue. Whether you’re the VP of sales or just a sales rep, revenue is the single most important measure of your performance. All other metrics are KPIs you should probably know and worry about, but definitely not focus on.
Inside Sales – Opportunities
The inside sales team is the connection between marketing and sales and therefore one of the most important (if not the most important) units in the organization. It’s ironic then, that this is usually the most inexperienced, short-lived team in the company.
The one, tell-all metric for this team is number of opportunities. In data-driven companies, this team will measure a long list of KPIs to make sure that the math supports the plan (dials, calls, time on the phone, lead age, number of touches, etc.), but the bottom line is that this team is measured by opportunities.
VP of Marketing – ROI
Since marketing spends most of a company’s discretionary budget, focusing on ROI will help with decision making and rationalizing spend. If you are ROI negative, something is off. This holds true for every part of a marketing organization, regardless of your immediate role.
You should measure everything, but focus on ROI. Now, ROI can be manipulated with slight changes to the definitions of the elements that go into calculating ROI. For example, Return will be based LTV (life time value) measured on a 5-year horizon, a definition that will make almost any marketing tactic into a positive ROI endeavor. So make sure you have clear definitions of how ROI is calculated in your organization, and stick to it.
Direct Marketing (Demand Gen) – Qualified Leads
Lead generation is no longer a real challenge for most sophisticated marketers. If you have the budget and a little bit of drive, you can get as many leads as you want. The real challenge is getting qualified leads – leads that show real interest in what you have to sell.
Direct marketing, and almost every other marketing unit directly responsible for feeding the sales team, should measure qualified leads as its primary success metric. And if you can only measure one thing, measure qualified leads.
Search Marketing – Qualified Leads
Some would say impressions, or visits or even rank, but the bottom line is that no one really cares about these metrics if they don’t lead to an increase in number of qualified leads (which leads to opportunities, which then leads to deals). If you are an SEO professional and you don’t know how your work resulted in number of qualified leads, you’re not doing your job, and you probably will be out of one soon.
Social Marketing – Qualified Leads
Followers, klout score, fans, likes, shares? Those are great metrics to share on a presentation, but just like search marketing, if these don’t lead to a real business impact, in this case qualified leads, when the next budget cut will happen (and it will happen), you will have to find a very good reason why you need to keep your budget, and team, and role.
Email Marketing – Response Rate
Unlike the other direct marketing teams, email marketing isn’t just about lead generation, it’s about demand generation. So while qualified leads should be the one metric all marketing units should care about, for email marketing response rate is the best proxy to know if your email marketing is actually generating demand. This obviously cannot operate outside the definitions of qualified leads, but since email marketing is not a lead generation tactic (purely because in order to send emails you already have to have the names), it has to be measured by how well it helped generate demand.
It’s Not (All) About One Metric
The hypothetical one-metric software idea wouldn’t be realistic in today’s marketplace, but as an exercise in focus and prioritization, it makes a lot of sense. Once you think in terms of eliminating all the noise, you focus on what metrics are really important to your bottom line. With that being said, marketers really want to be able to track and measure everything, the challenge then becomes how do you make sense out of all the data and what actions do you take.
What one metric would you measure, if you had to choose only one?