In this white board video, we explore five key metrics you need be tracking to understand the ROI of your industrial marketing initiatives. From new customers to sales-qualified leads, total new contacts and website traffic, we’ll show you how to set targets that will help you reach the one marketing metric that really matters – revenue generated.
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Planning for results before choosing tactics
Like in the video on this page, this chapter from our Industrial Marketing: The Definitive Guide outlines an approach to planning a strategy around the results you want to achieve – from revenue to new customers to leads to traffic. View chapter of guide
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Hey, everybody. I’m Joe Sullivan with industrial marketing agency Gorilla 76, and today we’re talking about what marketing results manufacturers really need to be measuring.
So, we’re in kind of an interesting place in the B2B marketing world today. Ten or 15 years ago, it was all about print ads, direct mail, trade shows, cold prospecting. And probably some of these things still play a role at your company today in terms of your marketing strategy. The problem is, these traditional tactics can be really hard to measure in terms of their impact on your business. And it’s kind of a different story today as industrial buyers move online starting to look for solution providers, products, services, answers to questions they have, solutions to problems they have. Everything, all of a sudden, becomes measurable, and so you start to know what’s working and what’s not in terms of your marketing strategy. So we’re going to take a look at how you measure all that today.
The first thing you need to measure is really all that matters in the end, and that’s revenue generated by your marketing activities, right? That’s kind of why we’re doing marketing in the first place – to grow the business. So let’s just say that you’re a $20 million company and you’re targeting 20% growth this year. That means you’ve got a $4 million growth target for the year. And let’s say you want to be able to attribute 50% of that growth to your marketing investment. So, if that’s the case, it means we need $2 million to be generated directly from your marketing activities. Okay? Good starting point.
So, the next one is new customers. How many new customers is it going to take to get to that $2 million goal from your marketing activities? So the thing we’ve got to look at is, what’s a customer worth to you? You can think about this in terms of lifetime value or the customer’s spend over the first year – however you want to do it. We kind of prefer looking at it as lifetime value, but however you want to do it, let’s just say that a customer is worth $100,000 to you. So if we need to meet that $2 million goal, we’re going to need 20 new customers to be generated from our marketing activities. Okay, so that’s the first two.
Sales-qualified leads is the next one. And when I’m talking about sales-qualified leads, I’m talking about leads that are put on the table in front of the people on your team who are actually selling, that can be validated or verified by them as being the right type of company and the right type of person at that company. Like, “Yes, this is somebody that I would actually engage with. They fit our ideal client profile, and I’m going to pursue them.” So that’s a sales-qualified lead. So, how many sales-qualified leads do you need to get to 20 customers? Of course, a lot of this is going to depend on the effectiveness of your sales team. How good are they at actually closing a good lead when it’s put in front of them? Let’s just say that number is 50%. They can handle, you know, closing 50% of the leads put in front of them, so we’re going to need 40 sales-qualified leads to get to those 20 new customers. Okay, so the first three are covered.
The next thing we need to look at is, how many total new leads or contacts do we need to generate in order to get 40 sales-qualified leads? So, of course it would be wonderful if all of the leads generated through your online marketing activities and your website were sales-qualified. The reality is, you’re going to have students doing research projects, you’re going to have competitors spying on you, you’re going to have leads that just aren’t good. So let’s just say that 1 in 10 leads generated through your website is truly sales-qualified. So that means we’re going to need 400 total new contacts or leads over the next year to get to those 40 sales-qualified ones. It probably looks like an intimidating number, but you know, it’s actually achievable, depending on what energy you can pour into your marketing and how smart you are with it.
Okay, and so then the last thing we need to look at, kind of stepping back even further, is how much website traffic do we need to generate in order to convert, you know, 400 visitors into actual contacts on your site. So, if you’ve done any of your online marketing homework or you’ve learned a little bit about lead generation in the online world, you’re going to know that a good percentage of your website visitors are not going to be ready to talk to you. They’re researching, they’re learning, they’re trying to get questions answered. And so, if we know that only a small percentage are going to convert, or fill out a contact form, or request a bid form, then we need to think about, how are we going to get all the other visitors on your site that are actually qualified but not sales-ready to convert into an actual lead?
So, you think about who the different buyer types are that you’re targeting. Maybe engineers would download a technical whitepaper on a topic that, you know, is related to what they’re looking for, and they trade you some contact information for it. A procurement manager might download a buyer’s guide or a pricing guide, trade you some contact information for that. A CEO might use an ROI calculator, or a long-term cost of ownership guide, or something along those lines. So, however you do it, the key is to trade something of value to your website visitor in exchange for a name, a phone number, an email address, so that they actually become a physical lead for you.
So, if you’re doing this right and you’re doing a good job targeting the right types of buyers and putting offers in front of them that are going to appeal to them and help them in their buying process, you should be seeing about 2% to 3% of your visitors converting into real leads. So if that’s the case, if we need 400 new contacts and we know we can convert 2% to 3% of our visitors into leads because we’re doing such an awesome job with our online marketing, it means we’re going to need 13,000 to 20,000 visitors over the next year at a 2% to 3% conversion rate. That translates to about 1,100 to 1,700 visits a month.
So, this is the stuff you really need to be measuring. It all starts with revenue and it trickles all the way down to how much website traffic you’re going to need to generate the leads that it’ll take to get to that revenue.
So, the next thing I want to look at real quickly is measurement tools. How are we going to actually go about measuring this? What tools can you put in your hands to help you do that effectively?
The first one is Google Analytics. It’s kind of the obvious thing you need to install if you’re not using it yet. It’s a free tool, it’s going to provide you with a wealth of data, and it takes about five minutes to install. So Google Analytics is going to help you look at website traffic, to set some benchmarks, and look at your traffic growth over time. It’s going to help you figure out how visitors are finding you in the first place, their geography, what content they’re looking at that’s actually helping them convert into leads. So that’s Google Analytics.
The next one is HubSpot, or at least some kind of inbound marketing software. HubSpot’s our favorite, personally. HubSpot will help you look at comprehensive marketing performance online, and in particular, on your website. It’s also going to give you intelligence on individual leads in your sales funnel, what they’re looking at on your site, how they’re behaving, what they’re doing. It can be really great for framing sales calls and for segmenting your visitors based on all sorts of different criteria.
Moz is the next one. Moz is a search engine optimization tool that’s going to help you identify SEO opportunities, as well as track your SEO performance over time.
And then, Hotjar is a conversion optimization tool. It’s used for heat mapping and looking at how visitors are actually interacting with content on your site, how they’re moving through your site, what they’re looking at. Ultimately, the goal with using a tool like Hotjar is to help you improve your visitor-to-lead conversion rates so you can get to that 2% to 3% that you’re going to need to really start generating the leads you want.
So that’s all we’ve got for today. I’m going to post some links to related resources in the page notes on this page, and I would also encourage you to subscribe to our newsletter. So, thanks for watching.