The single biggest objective of every marketing and sales team is to generate demand. However, according to a HubSpot survey, 61 percent of marketers believe that generating traffic and leads will be the most challenging issue in 2021.
As a result, B2B companies across various sectors spend more than 11.3 percent of their annual budget on marketing in order to increase their ROI. However, few B2B marketers are happy with their demand generation rate. Why is this?
Data is a fantastic resource for marketers to learn how their marketing effort is performed and how they can effectively manage it to increase the demand generation rate because they don’t like data.
In this article, we’ll explain how to calculate the top seven demand generation KPIs for B2B companies. Know the top 7 demand generation metrics for B2B businesses and how to calculate them.
Key B2B Demand Generation Measurement Areas
Engagement metrics are the yardstick by which success is measured. This information aids marketers in determining how consumers respond to their advertisements. The engagement statistics reveals the number of users who visited your site, the click-through rate, and the unsubscribe rate, among other metrics.
The quality of your entire marketing funnel is measured by performance metrics. It demonstrates the effectiveness of your lead generation techniques in collecting and converting potential leads. Examples of performance metrics include marketing qualified leads, sales cycle time, and sales-accepted leads.
The most crucial statistic for determining whether or not your marketing budget is being used effectively is the rate of return on investment. If your ROI figures are in your favor, then your marketing budget is allocated properly. The common ROI metrics include customer lifetime cycle, conversion rate, and total revenue.
7 Important Demand Generation Metrics for B2B Marketers
- Marketing Qualified Leads
Marketing qualified leads (MQLs) are the first demand generation indicator that marketers should check (MQL). This is a simple metric for determining whether or not you are on track to accomplish your organizational objectives.
An MQL is a person who has a high tendency of becoming one of your customers. Marketing teams have thoroughly evaluated these leads. Basically, salespeople need to nurture them. MQLs aren’t your customers yet, but they can be if they’re fostered properly.
Marketing and sales departments must first determine key features of a qualified lead before measuring MQL demand generation metrics. MQLs can be identified using a variety of indicators, including:
- Click on the pages of the website.
- Spending time on the webpage
- Click on the product/service pages to learn more.
- Attendance at a webinar
- Downloading whitepapers
- Newsletter sign-ups
Your marketing goals and techniques will also influence the MQL key indicator. For example, if you use email marketing to engage with and nurture your subscribers, the key point of measurement for MQL metrics is a signup form on your website.
On the other hand, if you post original content and whitepapers on your site, your MQLs might be determined by the number of visitors and downloads.
- Sales Qualified Lead
The next demand generation statistic after MQL is SQL, otherwise known as sales qualified lead. MQL metrics will tell you who your potential clients are. SQL, on the other hand, will go one step further and provide you leads who are willing to convert. SQLs are the surest leads that require the least amount of effort to convert.
SQL will be calculated depending on specified indicators, just like MQL. Once more, your marketing and sales units must work together to determine variables that will help you navigate SQLs. SQL factors are usually more direct, such as:
- Go to the price page.
- Putting products in shopping carts
- Obtaining a free trial or sample subscription
- Contacting the sales department
- Chatbot interaction, for example.
It’s a well-known fact that your MQLs will become SQLs. However, you must properly nurture your MQLs in order to achieve this.
- Customer Lifetime Value
Customer Lifetime Value, or CLV, is an important financial indicator for marketers. This demand generation measure is extremely crucial if you want to maximize income from individual consumers.
Marketing teams generally devote a significant amount of time and resources to capturing leads, after which sales teams focus on nurturing those prospects. When you don’t gain optimal value for the time and money invested in nurturing a lead, it becomes a huge setback for your marketing initiatives.
CLV depicts the revenue generated by a consumer over the course of a business’s life cycle. Calculate the demand generation statistic to deploy your marketing and sales resources to high-value clients. You can even execute account-based marketing efforts for your high-value clients who bring in more revenue.
Customer lifetime value indicators are influenced by a variety of factors, including marketing strategy, customer service, after-sales services, and other internal considerations.
- Cost Per Acquisition
On its own, the customer lifetime value indicator is rather powerful. However, if you want a complete picture of your return on investment, you’ll need the super support of the cost per acquisition demand generation metric.
Marketers are spending a lot of money on digital marketing these days in order to expand their businesses. In total, almost 378.6 billion US dollars was spent on digital marketing during the pandemic crisis in 2020.
To establish a successful online prime, you may also be spending a lot of money on social media marketing campaigns, digital ads, or email marketing. But how will you determine whether all of your marketing budgets is actually paying off?
You should concentrate on the customer per acquisition metric for this. It will indicate to you how much income each of your marketing campaigns is bringing in. This insight will enable you to allocate more resources to the marketing channel that generates the most money for your company.
- Average Payback Period
Knowing your cost per acquisition will only inform you how much you need to spend on new customer acquisition. However, calculating the payback period is necessary if you want to know when your investment will begin to generate money.
As the name implies, this demand generation indicator will show you how long it will take you to recoup your investment costs. In layman’s terms, the payback period is the amount of time it takes for your customer’s journey to end in your demand generation funnel.
It refers to the point at which your marketing initiatives become profitable. If we use the example from the point above, the time it takes you to regain the $5 customer acquisition cost is your payback period. That period could be a week, a month, a year, or even longer.
- Content Performance
One of the most important demand generation measures that can greatly assist marketers is content. According to a poll, 47% of B2B customers want to engage with at least 3-4 pieces of content before making a purchase.
What that means is that when visitors click on your blog articles or download a whitepaper from your website, it indicates that they are interested in purchasing your product or services. As a result, it is critical for B2B marketers to spend on dynamic content marketing tactics in order to increase the number of leads entering the demand generation funnel.
Every piece of content you publish on your website or on social media networks delivers varied information about your users’ habits.
When a person downloads an eBook from your website, for example, it indicates that they are interested in learning more about the services you provide.
When someone follows you on social media, on the other hand, it indicates that they are familiar with your brand and still want to learn more about it.
Here, your sales and marketing teams must experiment with various content marketing methods in order to elicit diverse responses from your customers. You must use several keywords, publish a variety of content on your website, and engage your audience through social media posts.
The best illustration of this demand generation measure is Salesforce. To monitor significant demand generation indicators, the brand focuses on blogs, eBooks, tutorials, research papers, and other content marketing techniques.
- Close Rate
Every marketer should calculate this measure because it is the most essential and final demand generation parameter. The close rate indicator measures how many leads actually become customers. This is essential as every marketer wants to know what their conversion rate really is.
Close rates, on the other hand, should be calculated for each marketing channel separately. Assume you want to promote your business online using email, social media, and blogs. In such a situation, you’ll need to calculate the close rate separately for each of these marketing channels. Why is that?
Because each marketing channel has a different CLV, CPA, and budget, the close rate for each marketing channel should be determined independently.
To optimize your demand generation funnel overall, you must first determine the conversion rate for each marketing channel before comparing them side by side. This allows you to concentrate on the marketing channels that result in the highest conversion rate for your company.
Today’s marketing teams must collect marketing data and organize it into different segments in order to track their marketing performance. But the important thing is to choose the appropriate demand generation metrics.
There’s no use in complicating your marketing initiatives by calculating hundreds of demand generation KPIs. You only need to concentrate on 2-3 essential demand generation indicators that can give you a comprehensive picture of your marketing efforts.
Ultimately, choose the proper demand generation metric and give your firm a boost in 2022.