When a B2C company wants to track a metric, they look to the basics: customer acquisition cost, sales conversion rates, average order values, revenue by traffic source, cart abandonment rates, etc. Of course B2Bs look at these metrics, too. This is especially true now since we’re seeing a trend of B2C and B2B marketing strategies converging due to the increase in social media interaction in the customer journey.
Even so, the enterprise and consumer experiences have yet to merge into a single commercial transaction. That means they’re still fundamentally different. So if you’re a tech company, for example, you’re still going to need to look at specific metrics and KPIs that are unique to your operation that will allow you to glean deeper insight into the efficacy of your marketing strategy. We list the most vital of these metrics below.
This kicks off the list because there are a number of reasons web traffic is a crucial metric. Say you’re a startup tech company that wants to boost brand awareness. Well, web traffic is going to act as a kind of barometer to offer tangible insights as you grow. And attracting this new traffic goes hand in hand with your marketing initiatives.
So, if you’re a tech company looking to direct more visitors to your website, then that’s the metric you’ll want to focus on. The key performance indicator you need to look at to see if your marketing efforts are achieving this end is Cost Per Visit (CPV). To determine this, simply divide the cost of your monthly marketing spend by the total number of visitors to your website.
This will help you set clear goals regarding just how much you’d like to spend per customer, whether that’s one dollar or 10 cents. And look at this KPI over the long term. Look at how your marketing spend has affected site traffic over the previous few months. This will help you to bring down your CPV by a few cents each month.
One final thing to keep in mind on this topic is that any new website visitor will land right at the top of your sales funnel. If the visitor takes action such as signing up for your email list, then they become a ripe lead for nurturing. Which brings us to our next point.
So you’ve got new visitors to your website and some of them are engaged. They’re clicking on CTAs, signing up for email lists, and reaching out for more info. That means it’s time to begin a relationship. Understanding this consumer behavior will tell you whether you’re dealing with qualified leads or not. To that end, Cost Per Lead (CPL) is a crucial KPI for measuring lead-volume efficiency.
The basic Cost-Per-Lead formula is your marketing spend divided by the number of leads you generated from all those new website visitors we mentioned above. So if you spent 5,000 dollars and generated 5,000 new website visitors, and 200 of them took action and became leads, then you’re spending a little more than 25 dollars per lead.
But you can also go deeper and determine your Cost Per Qualified Lead (CPKL). Defining which leads are qualified and which aren’t varies from industry to industry and business to business. It hinges on things like price points and sales cycles. Therefore, after taking into account all those sales calls, consultations, webinar signups, product demos, etc., the CPKL for your tech company is likely going to be much higher than your CPL.
How much does it cost to acquire new customers? This goes to the heart of conversion, which is the key metric that unlocks the final door regarding ROI. To understand it requires looking at Cost Per Conversion (CPC). A KPI like this is going to clue you in to how efficiently you’re acquiring new customers. Determining this is a simple formula that involves dividing your marketing spend by your number of conversions. This KPI is most important when you’d like to see how well a specific CTA offer on your website is performing, or when you want to boost efficiency after optimizing the previous KPIs we’ve discussed.
Return on investment
Revenue—that’s the name of the game. All those sales strategies and marketing initiatives are geared toward one goal: boosting return on investment. Return on Investment (ROI) gets right to the heart of things, telling you the amount of money you generated based on how much you invested. This is a great KPI to measure short-term marketing initiatives like PPC ads. However, it may not be the most crucial one to look at to gauge the success of more protracted initiatives, like website and mobile app redesign, because tracking ROI takes much longer in these instances.
But there are ways to further optimize the revenue metric. For example, you can look at yet another KPI, Average Order Value (AOV). The KPIs discussed above will tell you how much you’re paying for qualified leads and customers, but looking at how much each customer spends per order will tell you even more. Maybe you’re nervous about spending a thousand dollars to acquire a new customer; however, if each customer is spending an average of two thousand dollars, then you’re looking at a 200% ROI, and that makes it worth it. That’s the kind of insight KPIs like AOV can reveal.
More than anything, let your overall goals drive your marketing strategy. Is your ultimate goal to generate more web traffic? Maybe it’s time to increase signups for a product demo or webinar? Are you simply trying to boost brand awareness? Setting these clear goals will tell you exactly which metrics to focus on and which KPIs to use to reveal with pinpoint accuracy how your initiatives are paying off.