Metrics matter now more than ever. As a six-time CMO over a 16-year career, I’ve tracked dozens (actually hundreds) of metrics and found that many measures are ultimately meaningless or only matter to marketers.

Having reported to six CEOs and six boards (three public and three private), I’ve presented marketing metrics at more than 60 board meetings. Based on this experience, I created The Marketing Performance Index (MPI) to track the key metrics for assessing a company’s relative brand, demand, and market strength, and provide a standardized marketing effectiveness score. This framework also serves to integrate program efforts better, helps connect brand to demand, and measures ongoing performance throughout the buyer’s journey and customer’s lifetime.

In the first part of the series, I introduced the MPI, and in this blog, I’ll illuminate why I picked these 24 key metrics for the MPI. But first a caveat: these are not absolute measures – companies can choose different ones or add weighting to various metrics to suit their needs. It’s critical to get agreement from key stakeholders, including the CEO, board, and investors, on what metrics they want to see, establish a baseline measurement (the current state) measure regularly (at least quarterly), and strive for continuous improvement of all results.

Market Presence and Brand Strength

The MPI has six distinct performance indicators (reach, share, engagement, loyalty, pipeline, and progression) across three measurement components (presence, brand, and demand).

Many CEOs (especially those of privately-held firms) make the mistake of believing that pipeline is created by executing effective demand generation strategies. Of course, it takes a modern tech stack, well-designed and implemented pipeline creation strategies, programs, tactics, and a highly experienced, well-managed staff to generate quality pipeline efficiently. However, funnel efficiency – defined as the comparative progression and velocity of the unqualified pipeline, the qualified pipeline, and the closed/won business – has a variety of variables that influence the actual efficiency realized.

Two of the most critical influences on pipeline efficiency are Market Presence and Brand Strength. Market presence is critical because it ensures that when prospects are seeking alternatives and new solutions (and only about 10% of buyers are truly “in the market” at any time in most segments), your company has adequate exposure.

Six Performance Indicators

The four “reach” metrics are:

• Earned Media
• Social Media
• Site Visitors
• Events Reach

The first three are self-explanatory, standardized measures. For this last one, I estimate the percentage of industry events the company participates in as a proxy for how visible a company is to their prospects. It’s common sense, you want to be seen when prospects are looking.

The four “share” metrics are:

• SOV (share of media voice)
• Indirect Sales (as a % of total sales)
• Unbranded +Search (as a proxy for SEO effectiveness)
• Branded Search (your company/brands)

The second area that greatly influences pipeline creation success is brand strength. If you have a comparatively weak brand (in your chosen category), your demand will suffer, and if not, it will cost a lot more to create every dollar of pipeline than your stronger competitors.

The four “engagement” metrics are:

• Social Media
• Owned Events
• Community
• Third-Party Events.

Savvy readers will note that social media also appears in reach –that measure is for the relative number of followers; this is for how engaged your audience is. If you have 50,000 followers who are largely unengaged (1% or less) vs. a competitor who has 10,000 followers who are very engaged (5% or more), and is adding followers faster, it’s easy to determine that the more engaged audience is more activated and likely to respond to your communications, campaigns, and overall value proposition.

The four “loyalty” metrics are:

• NPS
• Customer Satisfaction
• Gross (Customer) Retention
• Net (Dollar) Retention

.When CEOs think about how the eight metrics contained in the two measurement components for presence and brand can vary vs. competitors, it’s a lot easier to understand why comparatively weak numbers can lead to reduced, if not anemic market demand.

The third measurement component, pipeline health, is certainly the most scrutinized area in B2B companies today and often the one that CMOs feel the most pressure to deliver results (returns, ROI, etc.). The reason is that market share and revenue growth, along with profitability, are the primary drivers for company valuations, both public and private.

The four “pipeline” metrics are:

• Leads
• Conversion
• Pipeline Coverage
• Marketing ROI

Leads are standard (MQL or MQA) and volume is important for top-of-funnel health (ignore the provocative declaration that the “MQL is dead,” you need a lead source to prove contribution and attribution). Conversion is a pick field to select which type of conversion matters most to your business (e.g. website registrations, demos, free to paid, etc.). Pipeline coverage is closely tied to close and win rates, but most companies need at least 3x to have a chance to achieve their bookings target.

And finally, the four “progression” metrics are:

• MQL to SQL (Marketing Qualified to Sales Qualified)
• SQL to SQO (Sales Qualified Lead to confirmed Opportunity)
• Close rate (from stage 1 opportunity to close)
• Win rate (head-to-head win rate vs. top competitors)

During the vetting phase for the MPI, some of my colleagues argued that I should exclude any sales efficiency and progression metrics. There’s a very important reason I did. Every CMO I know is facing unrelenting questioning about the pipeline they create or contribute and the progression of leads from the initial scoring as an MQL/MQA to conversion to close. And along the way, sales can push, delay, evaporate and lose quality pipeline to competitors all by themselves in a variety of random and unmanaged ways.

The Importance of Measuring Sales Efficiency in Marketing

In today’s competitive business landscape, marketing plays a crucial role in driving revenue and growth for companies. However, without proper measurement and analysis of sales efficiency, it can be challenging to determine the effectiveness of marketing efforts. In order to maximize ROI and drive business success, marketing must measure every aspect of sales efficiency, ideally in collaboration with the sales team.

Key Metrics for Measuring Sales Efficiency

From lead qualification and processing SLAs, to conversion to pipeline, to stage-by-stage progression and velocity, to close, marketers must track and analyze key metrics for every customer segment and distinct selling team. By measuring these metrics, marketers can identify areas of improvement, optimize processes, and drive better results.

At this stage, it is essential for marketers to align with key stakeholders, including the CEO, CRO, CPO, and other C-suite peers, to agree on the key metrics that determine marketing’s objective performance measures. By collaborating with key decision-makers, marketers can increase their contribution, recognition, and rewards within the organization.

Addressing Underperformance in Sales Efficiency

In our next installment of the series, we will explore how to address underperformance in the three major measurement components of sales efficiency. By identifying and addressing areas of underperformance, marketers can drive continuous improvement and achieve better results for their organizations.

FAQ

What are the key metrics for measuring sales efficiency?

The key metrics for measuring sales efficiency include lead qualification and processing SLAs, conversion to pipeline, stage-by-stage progression and velocity, and close rates for every customer segment and distinct selling team.

How can marketers increase their contribution and recognition within the organization?

Marketers can increase their contribution and recognition within the organization by aligning with key stakeholders, such as the CEO, CRO, CPO, and other C-suite peers, and agreeing on key performance metrics that drive business success.

Conclusion

Measuring sales efficiency is essential for driving business success and maximizing ROI. By tracking key metrics, collaborating with key stakeholders, and addressing areas of underperformance, marketers can optimize their efforts and drive better results for their organizations. In our next installment, we will dive deeper into how to address underperformance in sales efficiency and drive continuous improvement.