Your marketing efforts are bringing new prospects in the door, but can you prove it? Of course you can! It’s just a matter of tracking the correct lead generation KPIs.
Don’t underestimate the power of focusing on the right things. As marketers, we have access to so much data that it can be hard to understand exactly what it’s saying about our performance. By tracking the most essential KPIs, you give yourself more power to analyze what really matters.
And that’s what the following list is for. It’s a quick guide to measuring lead generation progress, assessing marketing’s impact on lead gen and optimizing campaigns.
KPIs for Measuring Lead Generation Progress
A lead is a contact that has been identified as a potential customer. Every organization is going to have a different definition of what a qualified lead looks like. Depending on your market and product, you might consider the contact’s location, size, industry or a wealth of other factors. One of the most important indicators for pretty much every organization is intent. Did the contact download a case study, sign up for a newsletter, request a consultation or take some kind of action to learn about your product or service?
Many organizations will differentiate a lead based on where it is in the sales funnel. A marketing qualified lead (MQL) is a contact that meets the basic definition of someone who looks like a prospective customer based on all those factors mentioned above.
A sales qualified lead (SQL) takes it a step further — someone on your sales team has spoken with the person and verified that, yes, this organization has the necessary budget, the authority to buy, a need for your offering and a timeline for making a purchase.
A sales opportunity is a potential customer that, after additional vetting, meets the above criteria and is a good fit for your product or service. They have a higher likelihood of signing, probably in the very near future.
As a lead works its way through your funnel, it’s smart to assess the potential revenue it could create if won. Let’s say your average deal is worth $100,000, based on past experience. If the typical MQL has a 1 percent chance of closing, each MQL can be valued as $1,000 in potential revenue. Maybe your SQLs become clients 25 percent of the time — therefore, each SQL can be valued at $25,000.
Tracking potential revenue can help your team pace performance against revenue goals and let you know if you’re generating enough leads.
You’ll also find it valuable to track days between lead creation, deal creation and won date, so you can forecast when potential future revenue will occur and identify where potential slowdowns and clogs are happening in your funnel.
KPIs for Assessing Marketing’s Impact on Lead Generation
You’re going to track cost — the amount of money spent on an advertising, marketing or promotional campaign, or activity. Because your boss / client will want to know how much you’re spending.
And understanding cost will allow you to track CPL (Cost per Lead). It’s how much money was spent on advertising per lead acquired — cost divided by the number of leads. CPL serves as a measure of your efficiency, especially if you can compare your CPL to industry benchmarks or your own historical performance for context, or if you can break out CPL by channel or tactic so you can highlight your most effective marketing investments.
An impression is a view of an ad, web page or marketing message — how many times did you reach your audience? A word of warning about impressions: A lot of marketers get really invested in this KPI, because it tends to be a larger number, and well, larger numbers look better in reports. You absolutely need to measure impressions. But you also need to put this metric in context.
You can do that with CVR (Conversion Rate). This is the number of leads per impression, shown as a percentage. CVR, along with CPL, are the most important for showing marketers their overall impact on lead generation and how efficiently they’re generating those leads.
If you’re differentiating leads by MQL, SQL or sales opportunities, you can also track conversion rates between stages in your sales funnel as a way to diagnose where your sales process is struggling.
And last but not least: ROI, the return on your marketing investment. Calculate ROI by subtracting cost from total deal value, then dividing that by cost.
total deal value – cost / cost
KPIs for Optimizing Lead Generation Campaigns
To make the most of your marketing strategy, you also need to look more closely at what tactics are and aren’t working. The following KPIs can help:
The single instance of a user following a link to visit another web page or to initiate an action. This KPI is a measure of engagement — is anybody doing anything after they see your ad or open your email?
CPI (Cost per Interaction)
Calculation of how much money was spent on advertising per interaction acquired — interactions divided by cost.
ITR: (Interaction Rate)
Calculation of how many users saw an ad and then interacted with it. If 100 people see an ad and 10 interact, the interaction rate is 10 percent. Counting interactions is great, but the interaction rate is really what helps you put your results in context if you can compare ITR by channel, platform or ad network.
For example, let’s say your social media generates interactions at a higher rate than display. That lets you know you should consider devoting more of your budget to social or taking a closer look at the display campaigns to see if there’s something that requires intervention. You can drill down even further, too. Maybe Facebook performs better than other social networks for you, and you’re getting a lot of juice from their carousel ads — a clue that you might want to spend more on carousel ads.
Keep Up the Good Work!
Keep in mind: These are the most essential key performance indicators for marketers to track. As you deepen your insight into lead gen performance, you might start looking at other measures. These KPIs, though, can prove marketing’s impact on lead generation and show you how to be even more effective. You’re doing great work — these KPIs prove it!
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