There are dozens of metrics that can indicate growth at your company. With so many potential items to measure, it can be tough to determine which metrics make sense for your company and which departments are responsible for which goals, not to mention how everyone’s combined efforts impact your bottom line.
In this two-part series, we’ll look at sales and marketing metrics that help you track performance. But first, let’s look at where to draw the line between sales and marketing.
Defining the Line Between Sales and Marketing
While it’s tempting to think of sales and marketing as separate functions, they’re both responsible for one thing: revenue. Sales and marketing must work toward common goals to succeed. Without clear expectations, it becomes easy for sales to blame marketing for too few or poor leads. Meanwhile, marketers can point their fingers at sales team members claiming they failed to follow up quickly or couldn’t close enough deals. To avoid these common pitfalls, the team must work as a single unit—the revenue department—and set goals that apply to each subgroup as well as to the department at large. First, let’s cover marketing.
Essential Marketing Metrics
Marketers can have some of the most difficult roles in an organization. Despite their reputation as the “T-shirt department,” the task of burning dollars to find, qualify, and attract new customers is hard. Because it’s such a tough job to track dollars spent to dollars earned, some organizations think marketing is a waste of money. But there are metrics that can help marketers prove their efforts pay.
Awareness and Engagement
While awareness is hard to map to dollars earned, this metric helps us to understand how much visibility marketers create for a brand—it’s also a great indicator of company growth. Some marketers will track social follows. Some will track interactions with social posts. Most will track website traffic. In aggregate, these numbers can paint a picture of just how visible you are and just how much attention you’re getting. Tools like Hubspot can plug into your website and your social media accounts to make it easy to track numbers like these.
Cost Per Lead
If you’re spending too much to gain leads, then the marketing department is a money pit. According to the Integrated Marketing Association, most IT businesses spend between $39 and $370 per lead. To determine your cost per lead, add up how much you spent on marketing activities to acquire each lead. For each campaign you run, simply divide the cost of the activities (ads, billboards, events, etc.) by the number of leads you can attribute to the campaign. Note that this metric is helpful for tracking marketing spend, but another metric called customer acquisition cost (more on this later) will tell you what your total cost is to win a customer. In any case, when it comes to cost per lead, lower costs seem most preferable, but not if the leads are junk. This takes us to the next metric.
Pipeline is a great metric because it gives you an estimate of how valuable marketing-generated opportunities are. Instead of creating metrics around the aggregate number of leads, pipeline helps marketing teams determine whether the leads they’re getting are worth something. To get pipeline, add up the potential value of all current marketing-generated opportunities. Note that for a lead to become an opportunity, they must be qualified through a discussion with sales or through marketing qualification activities (like lead forms). Once you understand whether a lead is a potential customer and what the opportunity’s budget might be, you can estimate how much they’re likely to spend on goods or services. With an estimated value attached, marketers get a better sense of whether or not that lead will turn into dollars. From here, it’s up to sales to run the deal home.
The three metrics above barely scratch the surface of what marketers can track. Net Promoter Scores help marketers understand how likely people are to recommend their company. Conversion rates help them understand how many inbound leads ultimately become customers. The list goes on and on. But for lean marketing teams, the metrics we’ve discussed in this piece are great indicators of marketing success and company growth.
In our next piece, we’ll break down key metrics for sales teams while also exploring a few metrics that matter to the revenue department at large.