Metrics that matter

A rock and a hard place

Most B2B marketing teams are still KPI’d on MQLs, which incentivizes lead gen activity, gating everything in exchange for an email address, no matter who you are and where you are in the buying journey. This was fine in the age of ‘growth at all costs’, but it leads to a pretty dismal CAC (Customer Acquisition Cost). And when sales teams are more stretched than ever, Marketing won’t be making any friends flooding the funnel with unqualified leads.

Or, there are metrics based on pure revenue targets for the marketing team. But these don’t take into account the length of the average buying journey, or the time it might take for marketing activities to translate into revenue – particularly at the top of the funnel. This unfortunately means marketers must sacrifice long-term strategies and focus on sales enablement to try and get buyers interested and through the door.

The problem with both of these metrics, MQLs or Revenue, is that they lead to a focus on short-term tactics rather than long-term strategies. Not giving the long-term demand generation and brand awareness strategies enough time to make an impact or create long-term, sustainable growth.

Something needs to be done to make sure marketing teams are able to do what they know best – building awareness and demand, generating leads, and impacting revenue. And getting their fair share of the credit as companies seek sustainable growth.

Fuel growth

To fuel sustainable growth, SaaS companies have to start looking at the short and long-term tactics working together, allowing marketing teams to work across the full funnel. Of course there’s no one size fits all approach, but the 60:40 rule (60% branding, 40% direct response) has been well established by the IPA as the optimum split for business growth and success.

Because of the focus in previous years on growth at any cost, SaaS companies have had a worrying disregard of the 60:40 rule, instead focusing on short-term, product feature-led campaigns. These might have generated some impressive sales spikes, but it’s at the detriment of long-term profit growth, preventing awareness from developing into active, self-sustained demand.

Getting back to basics – where should we be spending our efforts, and how do we track it?

Brand awareness

You can’t buy from someone you’ve never heard of.

Brand awareness is about creating a strong and positive brand identity and shaping the perceptions and emotions of the brand which ultimately translate into a feeling of trust with potential customers. For enterprise B2B SaaS solutions, where decisions are involving significant investment and long-term commitments, trust is a critical factor. Choosing the wrong partner could impact the buyer’s company bottom line, or the buying committee. After all, there’s a reason for the saying ‘‘nobody ever got fired for buying IBM”.

The problem is that brand efforts are fairly intangible, focusing on building awareness and mindshare in the market. Here we’re looking at metrics like social media engagement, website traffic, and CRM tracking. The soft metrics are important too, brand recall, share of voice and sentiment. To get a true picture we need to move away from last touch attribution and embrace multitouch attribution.

Demand generation

Demand generation is key to a successful long-term marketing strategy because it addresses out-of-market buyers, who according to the 95/5 rule make up 95% of your target audience at any given time. By continually educating out-of-market buyers about the problem you solve and increasing your brand authority, you increase their demand and help transition them to in-market buyers.

While the words are similar, Demand Generation and Lead Generation are not the same thing. Demand Generation is about building a long-term pipeline through brand awareness and education. Lead Generation is focused on converting those in market today. The combination of these builds both your long-term pipeline and your short-term conversions. It should also be noted that demand generation reduces the price barrier and increases funnel velocity for optimized lead generation.

Demand Generation is a long-term game, but is a crucial part of the puzzle for creating sustainable growth. The goal of demand generation is to create a consistent pipeline of leads and prospects – feeding your growth engine.

It will be tracking view and clicks, from all your demand-based activity, such as paid media campaigns, SEO content activity, adding in your views and engagements from webinars, podcast, influencer activities and  also tracking offline activity like events, and sales calls.

Lead generation

Here, all of your data points should come together to optimize your marketing activity to focus on your ICP – specifically targeting those in the consider stage.

It’s about the high quality audience targeting combined with intent signals, tracking the ever-important hand raisers, whether that’s through paid campaign activity or nurture programmes. You’ve got their attention with demand generation, and now you’ve turned them into a fully-fledged lead through a demo request or trial sign-up.

Importantly, if the first two stages, brand awareness and demand generation, are working, the lead quality should be higher because they know who you are, they trust you, and have seen your brand authority for the problem they need solving. Meaning higher conversion rates and lower CAC.

Let’s stop holding SaaS marketing teams to standards that don’t actually align to the business goals.

Connecting brand awareness, demand generation and lead generation allows SaaS marketers to build trust with brand campaigns, create demand for a problem, and then leverage that credibility to influence prospects to purchase your solution when the time is right.

While lead generation can generate short-term leads and revenue, brand awareness and demand generation ensures a continuous flow of leads and nurtures potential customers for the long haul. In fact, according to the 2023 B2B Marketing Benchmark, an approach that pairs brand awareness with demand generation can yield 6x better results than demand generation alone.

Unfortunately, there’s no single metric that can tell the story of sustained growth. But if we look across the funnel we can tell the story of marketing’s crucial impact on creating sustained growth. Capturing marketing attribution or marketing influenced activity turns marketing from a cost centre into a revenue generator. Even better, if you can bring Sales and Marketing together and align on core goals your impact will be multiplied.