Metrics That Move the Needle: Key Insights for CMOs
Unlocking B2B CMO success: Moving beyond MQLs to drive revenue and growth.
Saima Rashid, SVP of marketing and revenue analytics at 6sense, examines B2B CMOs’ transition from traditional metrics to aligning marketing with business goals for improved growth and profitability.
B2B CMOs are at an inflection point: As the B2B buying process has become increasingly complex, marketing plays an increasing role in driving revenue and growth. The 26th October 2023 McKinsey report found that when marketing shapes growth strategy, there’s a big correlation with company performance.
“CEOs who place marketing at the core of their growth strategy are twice as likely to have greater than 5 percent annual growth compared with their peers,” according to the McKinsey report. That means that CMOs, who once were relegated to more supportive roles, are now leading significant aspects of the business and the bottom line.
Given this shift, it’s time to reassess the metrics that CMOs track and report on. From my experience running analytics for marketing, sales, and customer success, I’ve learned that CMOs can ensure that their efforts and investments drive a tangible impact on outcomes — and claim their seat at the revenue table — by aligning marketing metrics to business objectives.
From MQLs to Revenue: Reframing Success Metrics
Focusing on numbers that drive revenue means moving past the traditional focus on marketing qualified leads (MQLs) or other surface-level metrics that don’t align with business objectives.
For the modern marketing leader, that means tracking metrics that indicate current performance and predictors of future success in meeting revenue targets. By balancing leading indicators, like web traffic and engagement, with lagging indicators, such as pipeline generation and conversion rates, CMOs can make informed decisions, anticipate market trends, and pivot strategies proactively to drive growth and profitability.
4 Lagging indicators: Reflecting past performance
Lagging indicators are the high-level success metrics that let us know whether we’re meeting our major goals. We might report these metrics to our executive team or board as they are directly tied to revenue. Key lagging metrics include:
1. Pipeline generation and bookings: This metric tracks the pipeline volume generated and how effectively it converts into revenue. It’s a direct indicator of the success of your marketing and sales efforts. Modern CMOs must take ownership of the entire pipeline in partnership with sales rather than seeing themselves as responsible for just a part of it. Revenue is a team sport; taking ownership of the full pipeline number keeps everyone aligned and rowing in the same direction.
2. Conversions and deal velocity: Evaluating the rate of conversions and the speed of progression through the sales cycle provides insights into operational efficiency. Segmenting this data by go-to-market segment, geographical areas, and sales teams offers a nuanced understanding of where strategies are most effective.
3. Win rates: Monitoring win rates, especially in the ideal customer profile (ICP) accounts compared to a broader audience, helps ensure your targeting and engagement strategies are effective. To dig even deeper, you can glean valuable insights by profile win rates, new business versus upsell, competitive versus noncompetitive deals, and seasonality.
4. Average selling price (ASP): Knowing the ASP of your closed-won deals helps gauge the market’s response to your pricing strategies and product value proposition.
Analyzing these metrics can unveil patterns and opportunities for improvement, especially in ICP accounts versus control groups or non-ICP accounts. Seeing these metrics within the context of your overall plan allows you to adjust any gaps and strategy accordingly.
See More: Swapping MQLs for Intent Data Could Ease Your Marketing Troubles
6 Leading indicators: Predicting and shaping future outcomes
Lagging indicators look backward, and leading indicators offer foresight into current or future performance, enabling proactive adjustments in marketing strategies. These early measures of potential success include:
1. ICP Web traffic and engagement: Web traffic is a top-of-funnel metric, but when you analyze it in the context of your ICP accounts, you can see whether you’re attracting the right people to your website. Gauging your ICP’s interaction with your content tells you whether you’re doing the right things to speak to the accounts you want to sell.
2. Contact coverage: Ensuring that the right personas are identified and covered in your ICP accounts paves the way for effective account nurturing and sales engagement when the time comes.
3. Reach and engage accounts and personas: This involves measuring how extensively your campaigns reach the intended audience and which personas actively engage with your brand. Of course, the next step is understanding which campaigns and specific tactics are most effective at driving reach and engagement.
4. Marketing qualified accounts: How many ICP accounts have reached the target engagement criteria and intent levels that warrant getting sales involved? This is a key inflection point, and I set my pipeline plan starting at this level (i.e., how many MQAs are required for us to hit our pipeline and revenue targets).
5. BDR scorecard: Assessing how quickly and effectively inside sales teams respond to marketing-qualified accounts can indicate the efficiency of the interplay between marketing and sales. I look at a weekly scorecard of output by team/rep, along with details on activity volume, multithreading, and response time.
6. Meetings and stage 0 opportunities: Tracking the number of initial meetings and early-stage opportunities provides insights into the effectiveness of lead generation and initial sales engagement strategies. I like to have targets at this level to ensure we track against leading indicators to our pipeline plan.
Leading indicators may not make it into the board report, but they are at least as important as lagging indicators. That’s because they allow you to take a pulse on your programs to understand how your strategy is performing and, ultimately, generating revenue.
Source: 6sense
Data Culture Is Decision Culture
The fundamental objective in collecting, analyzing, and deploying data and analytics is to make better decisions. The indicators in the table above show that getting more granular with what we track and what actions we take is always possible.
For CMOs, the emphasis on metrics is not just about proving the value of marketing. It’s about taking a strategic, data-driven approach to drive the company forward. By focusing on metrics that align marketing efforts with overall business goals, CMOS can ensure its strategies fundamentally contribute to the company’s growth and success. This holistic approach to metrics paves the way for informed decision-making, enhanced collaboration with sales, and a stronger impact on the business’s bottom line.
How can enterprises align the metrics with business objectives? Are CMOs vital to plans? Let us know on Facebook, X, and LinkedIn. We’d love to hear from you!
Image Source: Shutterstock
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