How to measure marketing success

This previously published article was updated on May 1, 2019.

How do you define marketing success?

A stronger brand image? Improved visibility or awareness in your marketplace?

Higher rankings in Google searches, paired with growing website traffic?

Maybe more visitors turning into tangible leads by filling out forms on your site?

When we see an uptick in any of these numbers, it’s easy to get excited. And rightfully so. Especially when we’re reinvesting hard-earned dollars into our websites and marketing initiatives, and when our teams are busting their tails to generate impact.

But before we throw a celebration for elevating website traffic from 1200 to 1400 visits/month, I’d like to emphasize one very important point:

These numbers are Marketing KPIs – not business outcomes.

The difference between Marketing KPIs and business outcomes

Marketing KPIs are exactly what they sound like – key performance indicators.

They’re barometers – signals that tell us whether we’re on the right path to something bigger.

Business outcomes, on the other hand look something like these:

  • $10M growth in sales
  • 20% growth in year-over-year revenue
  • 5% increase in gross margin
  • 25% increase in customer retention
  • 50% increase in customer lifetime value

I’ve yet to speak with a CEO, President or VP of Sales that took more interest in growing traffic than growing revenue. Or a higher website form submission rate than higher profit margins.

Now don’t get me wrong.

The basis of my argument is not that metrics like campaign reach, cost per click, website traffic or leads generated are unimportant or irrelevant.

My point is that when they’re evaluated as standalone indicators of success or failure, these Marketing KPIs are no more than vanity metrics.

They’re important predictors of whether we are (or aren’t) moving in the right direction toward a more substantial business outcome. On their own, however, these KPIs are not business outcomes.

How to design a meaningful system for measuring marketing success

So how do we go about connecting the dots between the physical activities we’re implementing on the Marketing front and those big-picture outcomes we’re trying to achieve at a company level?

We believe the following seven metrics serve as your best indicators of marketing success:

  1. Website traffic growth (KPI)
  2. Visitor-to-lead conversion rate (KPI)
  3. Sales-qualified leads generated (KPI)
  4. Opportunities (or pipeline revenue) generated (KPI)
  5. New customers generated (business outcome)
  6. Revenue generated (business outcome)
  7. Resulting profit (business outcome)

You can make an argument for a number of other metrics to sit on this list (for example, pipeline velocity, close rate, cost of customer acquisition, etc). But keep in mind that this article is about how to gauge the success of your marketing investment. So we’ll exclude some of the more sales-centric benchmarks here.

If you can successfully build a system for tracking each of these seven steps – from one right into the next – you’ll understand whether your marketing infrastructure is positively impacting the advancement of your business.

And if it’s not, you’ll also learn where it’s breaking down, so you can initiate change.

Let’s briefly touch on each of these seven key figures.

1. Website traffic growth (KPI)

Website traffic is a top-of-funnel signal of awareness. As you open your Marketing and Sales funnel at the top, and more of the right individuals flow into it, a waterfall effect should occur down the line. Related KPIs include organic search engine rankings, as well as impressions and click-through rates on your paid media investments. As these numbers grow, so grows your traffic.

2. Visitor-to-lead conversion rate (KPI)

As you fill up that funnel and get more of the right eyeballs on your website and its content, are you effectively driving up the rate at which a visitor turns into a physical lead? Anonymous website visitors are of little value to your Sales professionals if they don’t come with names, email addresses and phone numbers. Without the ability to proactively step into conversation with your website visitors, we can only sit back, hoping they eventually raise their hands and say “I need your help”.

3. Sales-qualified leads generated (KPI)

Though we’re still in the land of Marketing KPIs here, this is where they become more meaningful.

Your growing website traffic (and the new contacts generated from it) will have no discernible impact on your business if they’re not comprised of buying-process influencers from right-fit accounts.

But when your new leads are consistently passing your qualification screenings, now you’re receiving a signal that whatever you’re doing to fill up the top of your Marketing and Sales funnel is working. Assuming your Sales team is armed with talent, focus and sufficient support, your business outcomes start coming into view out there on the horizon.

4. Opportunities (or pipeline revenue) generated (KPI)

This KPI may be a better indicator of your Sales team’s effectiveness than anything on the Marketing front. But with blurring lines between Marketing and Sales functions at B2B organizations today, you need to pay close attention here.

If sales-qualified leads (SQLs) are growing, but the number of those SQLs engaging in active sales conversations is stagnant, you might conclude that you have a Sales problem. And you might be right.

But we believe Marketing also has a responsibility here.

Our Marketing teams need to empower our Sales professionals all throughout the funnel by helping them create focus and optimize their time as they manage a growing influx of SQLs. We need to enable Sales to activate, nurture and develop SQLs into active Opportunities by arming them with the right tools, processes and content.

5. New customers generated (business outcome)

Here we’ve officially left the world of Marketing KPIs and entered that of business outcomes. But we have to remember that all customers aren’t created equal. Are the new customers that you can trace all the way back to their origin in your Marketing and Sales funnel the right ones? Is your Marketing investment producing high-margin opportunities? Companies and individuals that intend to buy what you actually want to sell? And have the potential to live on and realize a significant lifetime value (LTV) for your organization?

6. Revenue generated (business outcome)

If you’ve established tangible goals and effectively measured results from numbers one through five, then numbers six and seven should fall right into place. So – is your marketing spend driving enough revenue to justify the investment?

7. Resulting profit (business outcome)

You could make an argument to throw out revenue altogether as a success metric and jump straight to resulting profit. Because if your Marketing initiatives are driving up sales volume, but with low-margin customers, it’s possible you’re doing more damage that good.

So, are your margins growing as all the other numbers on this list grow?

Is the impact on your bottom line positive?

If not, it’s probably time to look hard at who you’re targeting and the value proposition you’re putting in front of them. Perhaps it’s time to refocus – to examine your positioning and redefine who your ideal customers or end markets really are.

Where to go from here

You can’t measure success without knowing where you currently stand (and where you need to go). So we created a tool to help you out.

We call it the Marketing KPI Worksheet.

The spreadsheet is simple. You’ll plug in a few goals and benchmarks, and the rest of the numbers will auto populate.

Marketing KPI Worksheet

So use this as your guide. Apply those “vanity metrics” so they have meaning. Connect them to real business outcomes. And measure marketing success accordingly.

Most importantly, lean on your results to make future decisions about how and where to focus your marketing investment.

Download your Marketing KPI Worksheet

Starting with your revenue and profit goals, this tool will help you set targets for sales opportunities, leads, traffic and more to assure you hit your numbers.

Download Worksheet