Measuring B2B Buyer Journey with Key Performance Indicators

Measuring B2B Buyer Journey with Key Performance Indicators

Statistics, UTM Strategy, Marketing Attribution, and More

by Tracy A. Wehringer

Understanding the buyer's journey is a fundamental aspect of successful B2B marketing. Each stage, from unaware to closed-won, serves as an essential link in a chain that leads to a successful sale. To ensure we're making the necessary strides and improvements in our marketing efforts, we must track specific Key Performance Indicators (KPIs). This article will outline which KPIs align best with each stage of the B2B buyer's journey.

However, before we delve into the specifics of KPIs, it's important to consider the broader context of marketing measurement. As of 2023, measurement in marketing still presents considerable challenges, as reflected in recent data:

• According to a 2022 report by Demand Gen Report, only 36% of B2B marketers felt "very confident" about their ability to attribute marketing touches directly to revenue. This points to a significant lack of confidence in attribution, suggesting that a majority of marketers may struggle to connect their activities directly to financial outcomes.
• Despite the availability of various attribution models, many B2B marketers are underutilizing them. A study by Forrester Research found that, as of 2021, around 58% of B2B marketers were using single-touch attribution models like first or last click, which are less accurate than multi-touch models in tracking the customer journey.
• A 2020 survey by the LinkedIn Technology Marketing Group revealed that 42% of B2B marketers listed "tracking touchpoints along the buyer's journey" as one of the most challenging aspects of marketing attribution. This highlights the ongoing difficulties in monitoring and understanding customer interactions.
• Despite these challenges, measurement remains a high priority among marketing leaders. In a 2022 survey by Gartner, 87% of senior marketing leaders indicated that they consider the ability to measure and analyze marketing performance and impact as a top priority.
• There is also a noted gap in the utilization of advanced attribution tools. In a survey by DemandLab, only 45% of CMOs reported using such tools to measure the impact of their marketing efforts.

These data points underscore the need for better understanding, improved tools, and more comprehensive strategies in marketing measurement. With this context, let's explore the KPIs that can help guide us in this journey toward improved performance and clearer attribution.

1. Unaware Stage

In the unaware stage, potential buyers don't yet know about your company or that they have a need that your solution could address. The primary goal here is brand awareness and exposure. KPIs to measure in this stage include:

• Brand Recognition: This is subjective and usually measured through surveys. Ask a sample of your target audience whether they recognize your brand, and calculate the percentage of respondents who say "yes."
• Website Traffic: Use tools like Google Analytics to track the number of visitors, unique visitors, and page views.
• Social Media Engagement: This can be measured using the formula (Likes + Comments + Shares) / Total Followers * 100 to get a percentage.
• Total Impressions: This metric represents the total number of times your content, whether it's a social media post or an ad, has been displayed, regardless of clicks or engagement. You can find this metric on your respective platform's analytics page.
• Ad Recall Lift: This is a measure of the increase in the number of people who remember seeing your ad within 2 days. The specific formula to measure it is provided by platforms like Facebook in their ad reporting.
• Media Consumption: This can include metrics like the number of views on your YouTube videos or listens on your podcast, depending on where you're pushing your initial brand awareness content.
• PR Mentions: This measures how many times your company is mentioned in the press or on industry websites or blogs. You might need a PR tool to track this.
• Reach: This KPI measures the total number of unique users who have seen any of your posts, ads, or other contents. Social media platforms often provide data on reach.
• Brand Search Volume: This is a measure of how many people are searching for your brand on search engines. This can be measured using Google Trends or a similar tool.

2. Awareness Stage

In the awareness stage, potential buyers realize they have a problem and start looking for solutions. At this stage, content marketing is vital. Important KPIs include:

• Content Engagement: This can be measured by tracking the number of views, shares, likes, and comments per piece of content.
• SEO Rankings: Use SEO tools like SEMRush or Moz to track keyword rankings. You're aiming for the first page of Google.
• Email Subscription Rate: This can be calculated using the formula (Number of New Subscribers) / (Number of Visitors) * 100 to get a conversion rate.
• Social Media Reach: This KPI measures the total number of unique users who have come across your content on social platforms. You can measure this using built-in analytics provided by social media platforms like Facebook, Instagram, Twitter, etc.
• Cost Per Impression (CPI): This is particularly useful for paid advertising campaigns. The formula for CPI is: Total Campaign Cost / Total Impressions * 1000. This gives the cost per thousand impressions, which is a standard measure in advertising.
• Bounce Rate: This metric shows the percentage of visitors who leave your website after viewing only one page. A high bounce rate could mean that your site isn't relevant or engaging enough. You can find this in your Google Analytics dashboard.
• Organic Search Traffic: This is the number of visitors who found your website through a search engine, not paid advertising. High organic search traffic usually indicates successful SEO efforts. Google Analytics can provide this data.
• Click-Through Rate (CTR): If you're running paid campaigns or sending out emails, you'll want to know the percentage of people who clicked on your link. The formula for CTR is: (Total Clicks / Total Impressions) * 100.
• Share of Voice (SoV): This is the percentage of mentions or conversations about your brand compared to your competitors within your industry. The formula for digital SoV is: Your Brand's Mentions / Total Market Mentions * 100. You'll need to use a social listening tool or SEO platform to gather this data.

3. Consideration Stage

Potential buyers are now aware of your company and are considering whether your product or service could solve their problem. Key KPIs to monitor include:

• Lead Generation: Simply count the number of new leads generated over a given period.
• Engagement Rate: This can be calculated as (Interactions / Impressions) * 100 for any particular campaign.
• Sales Qualified Leads (SQLs): Count the number of leads that have been identified as ready for the sales process.
• Lead Conversion Rate: This is the percentage of leads that convert to opportunities. The formula is (Number of Opportunities / Number of Leads) * 100.
• Marketing Qualified Leads (MQLs): MQLs are leads that the marketing team has qualified as likely to become a customer based on their behavior and engagement with your marketing activities. You can track this number directly.
• Engagement with Product Information: This measures how many potential customers are interacting with your product demos, downloads, and technical specification sheets. You can track this using website analytics.
• Email Open and Click-Through Rates: These metrics show how engaged your leads are with your email marketing during the consideration stage. Email marketing software can provide this information.
• Time Spent on Page: This shows how long leads are spending on key pages on your website, indicating their level of interest. Google Analytics or similar tools can provide this data.

4. Decision Stage

At this stage, buyers are deciding whether to buy from you or one of your competitors. KPIs include:

• Sales Conversion Rate: This can be calculated as (Number of Sales / Number of Leads) * 100 to get a conversion rate.
• Customer Acquisition Cost (CAC): This can be calculated by summing all marketing and sales costs and dividing by the number of new customers acquired. The formula is Total Marketing and Sales Costs / Number of New Customers.
• Time to Purchase: This can be measured by taking the date of first contact with a lead and comparing it to the date of purchase.
• Sales Conversion Rate by Lead Source: This KPI breaks down the sales conversion rate by where the lead came from (organic search, paid ads, referrals, etc.). This allows you to see which channels are most effective at generating paying customers.
• Average Deal Size: This measures the average revenue from each closed-won deal. It can be calculated as Total Revenue / Number of Deals.
• Product Trials or Consultations: For some businesses, a key step in the decision process is a free trial or a consultation. You can track the number of these and the percentage that convert into sales.
• Sales Cycle Length: This measures the average amount of time it takes a lead to go from the consideration stage to becoming a customer.
• Cost Per Acquisition (CPA): This measures the average cost to acquire a customer. It can be calculated by dividing total marketing spend by the number of new customers acquired.

5. Closed-Won Stage

The sale has been made, but the journey doesn't end here. Now we need to measure KPIs that tell us about customer satisfaction and retention:

• Net Promoter Score (NPS): You ask customers, "On a scale of 0-10, how likely are you to recommend our company?" Then, subtract the percentage of Detractors (those who answer 0-6) from the percentage of Promoters (those who answer 9-10).
• Customer Retention Rate: This can be calculated using the formula (End Number of Customers - New Customers) / Start Number of Customers * 100 over a certain period.
• Customer Lifetime Value (CLV): The formula is (Average Value of a Sale) * (Number of Repeat Transactions) * (Average Retention Time in Months or Years).

In addition, the one KPI that I personally like to measure that shows efficiency between marketing and sales is the hit ratio:?

The hit ratio, calculated as the number of Leads divided by the number of Closed Won deals, is a critical metric to understand the effectiveness and efficiency of the sales process, and it can also indicate the quality of leads that marketing is generating.

Let's explore this in more depth:

Hit Ratio (Closed Won/Leads)

This ratio gives a clear view of the efficiency and effectiveness of both your marketing and sales teams.

Sales Efficiency: A higher ratio indicates that the sales team is effectively moving leads through the sales pipeline and successfully closing deals. If the ratio is low, it might indicate that the sales team is struggling to convert leads, which could be due to a variety of reasons such as poor sales processes, ineffective sales techniques, or even the quality of the leads themselves.

Marketing Efficiency: On the marketing side, this ratio can reflect the quality of leads generated. If the ratio is high, it indicates that the marketing team is attracting high-quality leads that are a good fit for the product or service, making them easier to convert. Conversely, a low ratio might indicate that while marketing is attracting many leads, they may not be well-qualified, making it harder for sales to convert them.

However, it's important to note that this metric should not be looked at in isolation. It needs to be considered in conjunction with other metrics like the total number of leads, lead quality, sales cycle length, and other context-specific factors.

Additionally, this metric becomes more valuable when tracked over time. This is because the ratios can change due to seasonal variations, changes in strategy, or changes in the market. By monitoring the hit ratio over time, you can identify trends, understand the impact of changes you make, and forecast future performance.

Remember, the journey isn't linear, and customers can loop back through stages. They might take one step forward, or two steps back. This is natural, but by keeping a close eye on your KPIs, you can identify any significant dips or trends that need attention.

The Role of UTMs in marketing attribution

UTM (Urchin Tracking Module) parameters are crucial tools for any marketer looking to understand the efficacy of their marketing efforts. They are snippets of code that can be added to the end of a URL to track the performance of campaigns and content. When a user clicks on a URL with UTM parameters, those tags are sent back to your linked analytics platform, such as Google Analytics, and are recorded.

There are five variants of UTM parameters: source, medium, campaign, term, and content. Each provides a layer of information about where your traffic is coming from, allowing you to track a variety of marketing KPIs across different channels and campaigns.

Importance of UTM Tracking for Marketing Attribution

• Accurate Attribution: UTM tracking helps in attributing the customer's journey accurately to the right marketing channel or campaign. This is critical for determining the ROI of different marketing activities and optimizing resource allocation.
• Insights into Campaign Performance: UTMs provide actionable insights into the performance of individual campaigns. You can assess which campaigns are driving the most traffic, conversions, or sales, and then adjust your strategy accordingly.
• Content Performance Analysis: By using the 'content' UTM parameter, you can track the performance of individual pieces of content, which can inform your content strategy going forward.
• Keyword Performance: If you're running a paid search campaign, the 'term' UTM parameter can help you understand which keywords are driving the most traffic and conversions.

How UTM Tracking Relates to Attribution in KPIs for the B2B Buyer's Journey

In the context of the B2B buyer's journey, UTM tracking plays a pivotal role in connecting marketing activities with specific stages in that journey, providing actionable insights for improving KPIs. Here's how:

• Unaware & Awareness Stage: At these stages, UTM parameters can help you track which channels and campaigns are most effective at driving brand exposure and website traffic. This can inform KPIs like Total Impressions, Ad Recall Lift, Reach, and Website Traffic.
• Consideration Stage: UTM tracking can show you where your leads are coming from, enabling you to calculate the Lead Conversion Rate and MQLs by channel or campaign. This provides critical information for optimizing your lead generation efforts.
• Decision Stage: By tracking which campaigns and channels are driving sales, UTM parameters can help you improve your Sales Conversion Rate and CPA. They can also help you identify which content types and themes are most effective at this stage, informing your content strategy.
• Closed-Won Stage: UTMs can be used to track post-sale customer behavior, such as engagement with upsell or cross-sell campaigns, helping you improve your Customer Retention Rate and Customer Lifetime Value.

UTM tracking provides a wealth of data that can help you understand your B2B buyer's journey in depth, optimize your marketing activities for each stage of the journey, and improve your overall marketing ROI. It's a critical tool for any marketer looking to track the effectiveness of their campaigns and drive results.

By tracking and understanding these KPIs, you'll be better equipped to make informed decisions about where to invest your marketing resources, how to tweak your sales process, and ultimately, how to drive more revenue for your business. These metrics provide crucial insights that allow you to identify strengths and weaknesses within your marketing and sales strategies. By acting on these insights, you can optimize the customer journey, increase customer satisfaction, and build stronger relationships that result in higher customer retention and a healthier bottom line. Moreover, in a rapidly evolving business environment, they allow you to stay agile, making timely adjustments to your strategies, ensuring your business not only survives but thrives in any market condition.

About the Author:

Tracy A. Wehringer is a highly experienced senior strategist with over three decades of expertise in revenue marketing best practices. Tracy has a proven track record in helping clients achieve their revenue goals and grow their businesses. Her skills in optimizing short and long-term returns have been honed through her senior-level marketing roles in several global enterprises. Tracy has also contributed her expertise to the industry by serving on two boards for over five years.

Tracy's expertise includes revenue marketing, business transformation, data analytics, KPI strategy, digital marketing, and Six Sigma process improvement. Her experience in these areas has enabled her to help clients adapt and succeed in an ever-changing business environment.

In addition to her professional accomplishments, Tracy is an avid learner and is always seeking out new trends and developments in the industry. She is passionate about sharing her knowledge and expertise with others and is a sought-after speaker and thought leader in the industry.

To connect with Tracy and learn more about her expertise, visit her LinkedIn profile at https://www.dhirubhai.net/in/tracyawehringer/ .