Are you spending money on sales and marketing, but not sure you’re getting any return?
Then it’s time to make sure you’re measuring the right things. Some performance indicators may be easy to track – like social shares – but how do you know if they are adding to your bottom line? To be sure you’re investing in the right marketing pillars we have put together a key set of sales and marketing metrics.
1. Website
traffic
When you start delving into marketing metrics analysing traffic to your website can provide you with a range of insights into the effectiveness of your marketing activity, but you need to have a clear idea of what exactly you want to find out.
For example, traffic data
typically includes number of page views, visits and unique visits. Each can provide you with different information about your business.
But it’s important to think of the big picture. Monitor the growth of your web traffic over long periods and don’t get too hung up on spikes or dips if you know the cause – product launches for example will naturally lead to spikes. Comparing year-on-year will
give you a much clearer idea of whether or not you’re moving in the right direction.
The source of your traffic can tell you more about which of your marketing pillars are working most effectively. For example, if you run the same online advertisement, competition or other marketing initiative on a range of sites appealing to different types of customer, then analysing the referral rates from
these sites can provide you with valuable information about the kinds of customers you should be targeting.
Alternatively, running different advertisements on the same site and analysing click-through rates provides a simple way to carry out A/B testing on your messaging to understand what works best and what
doesn't.
Search data is also important. Look at the keywords used by your visitors in organic search too – can you see an increase in referrals for topics you’re talking about in your blog? If so, that shows your content marketing is effective.
If you’re paying for traffic that isn’t converting then you know
you have a problem that needs addressing: either you need to optimise the journey, or switch spend to more relevant sources. Correlate your traffic performance with other sales and marketing spend too.
Traffic arriving directly to your site, or from Google, is a good indicator that brand awareness is growing. All marketing efforts contribute to brand awareness, so this is a useful
measure to gauge the overall performance of your marketing as a whole.
Above all, always remember your website is your shop window. The more people you have looking through that window the more likely it is that someone will step through the door and buy something.
2.
Leads
Your website can be a hugely valuable source of sales leads – if you know how to capture them.
In order for somebody to part with their personal information you need to offer something in return. Whether it is an educational white paper or webinar, a free trial or a demo, the offer needs to be
seen to provide enough value to the visitor to warrant them providing you with their name and email address.
The reality is you need leads to make sales. You need to be generating enough leads to keep your sales team busy. Here are some lead generation methods that won't break the bank but make sure you have the capacity to follow up on the leads you
get.
Knowing how many you have, and whether that number is growing or decreasing year on year, is a key performance indicator of whether or not you're going to hit your sales targets.
You'll soon learn how many leads you typically need to make a sale so you'll then be able to set lead targets and measure
attainment too. And make a note of which traffic sources generated the most leads and concentrate your marketing efforts here.
Group leads by quality as well as volume. For example, this could be based on the level of data they’ve given you, how many emails they’ve responded to, the nature of their enquiry, or the size and spending power of their business. Warmer leads will be more likely, and
take less effort, to convert.
3. Lead-to-opportunities conversion rate
Remember that ultimately it’s sales that are important, not leads. So understanding how effective you are at moving leads to the next step in the sales process is an essential KPI for a small
business.
The next step isn't necessarily a sale: depending on where they are in the process, it may just be a phone conversation. A good rate of conversion from lead to opportunity shows you how effective you are at this stage, and how accurate you are with your lead scoring and prioritisation.
This metric can also highlight any problems – the lead quality could be poor or your follow-up may need adjusting. Depending on how good your lead tracking is, you'll be able to see this information by marketing pillar. You might find that you have a really consistent conversion rate across all sources except for one which is under-performing. This can highlight anything from a need for further training to a messaging issue.
As well as giving you that all-important evidence that your money is well spent, this level of intelligence allows you to focus your efforts in the right area, at the right stage in the sales and marketing process.
4. Prospect pipeline
How many prospects are in your pipeline? Not enough and you won’t make the sales you need – too many and you risk losing business you don’t have time to convert. But you won’t be able to get handle on this core KPI unless you can define what a prospect is.
Too many small businesses categorise a
prospect based solely on need – which gives you a pipeline inflated with a lot of so-called prospects that, in reality, will never spend money with you because they don’t have the budget, authority to spend it (they can sign off on an order) or the time to do it. All these should be part of your definition of a prospect.
You can now track your marketing spend one step further down the funnel, and
use the size of your pipeline as an indicator of your combined sales and marketing performance.
5. Pipeline to sales conversion rate
Knowing how well your sales funnel is working as a whole is an essential KPI. And the conversion rate from pipeline to closed revenue is a
vital one to measure.
It tells you how big your pipeline needs to be for you to generate more business. You can work backwards from there to how many more leads you need to convert, how many high-quality leads you need to do this, and where you’re most likely to get them. From here you can build a growth plan.
6. Sales
How much money are you actually making? This is what all your efforts come down to. There’s no point generating traffic, leads and prospects if you can’t turn them into actual sales. Ultimately, this is the small business KPI that counts the most.
Revenue is the goal of all your activity, so it’s the most important one to measure. Done right, it’s easy to track it all the way back to the beginning.
By pulling all six of these sales and marketing metrics together you’ll close the circle and quell those fears that you’re wasting budget. Which traffic sources deliver the most closed revenue? Know this and you
have the answer to marketing ROI. Monitor the entire journey and you can optimise and improve each metric in turn and watch the effects filter through to your bottom line.
To your success.
Noel
Guilford