Any Metric Can Become a Vanity Metric
Many marketers fixate on just a handful of performance indicators. They may boast about the number of prospects they’re generating or the speed at which MQLs (Marketing Qualified Leads) convert to SQLs (Sales Qualified Leads); but standalone metrics don’t always tell the full story. And, separated from its business objective, almost any metric can become a vanity metric.
Employ the Right KPI Mix
To avoid blind spots, consider the goal of each funnel stage. Then, review performance using a variety of indicator types?volume, efficiency, velocity and trend. The bottlenecks, low volume or inefficiencies surfaced can guide your optimization and prioritization of time and resources.
How to Measure This and That
Watch how good pipeline KPIs can be made better when reviewed with another indicator type.
Good: Website Conversion Rate
Better: Measure Website Conversion Rate and Prospect Count
You have a killer website conversion rate (love that high-value content!). Now, take a look at your Prospect Count. If it reveals the actual number of prospects generated is low, you’ll know to focus on driving more traffic to your site.
Website Conversion Rate is calculated as Number of Conversions / Number of Website Sessions.
Good: Prospect Count
Better: Measure Prospect Count and Cost Per Lead (CPL)
Events have generated a lot of quality leads this year—sounds great. But look at what they’ve cost you. Failure to factor in the cost of those event leads may mean you’re spending more than you have to. Direct budget where cost per lead is low to bring in quality leads for less.
CPL is calculated as Total Marketing Spend / Total New Leads. Adjust the numbers accordingly to evaluate CPL for a particular channel (e.g. events, partners, etc.).
Good: Prospect to MQL Conversion Rate
Better: Measure Prospect to MQL Conversion Rate and Velocity
Prospect to MQL Conversion Rate might show a particular campaign is attracting high-quality prospects. Now, take a look at the time it takes for them to move to the SQL stage. Fine-tuning content or increasing your nurturing efforts could help speed up the hand-off, so Sales can get those leads faster.
Good: Open Opportunity Count
Better: Measure Open Opportunity Count and changes over time
Reporting on open opportunity count each month helps you forecast marketing-sourced revenue. But it also offers the opportunity to track changes over time. Understanding historical trends can increase forecasting accuracy and help the business anticipate seasonality.
Each pipeline KPI has its value; but failure to look at funnel performance holistically could mean missing the big picture. The right KPI mix includes a variety of indicator types?volume, efficiency, velocity and trend?and metrics for each funnel stage. Use those KPIs together to get a complete picture of health. This not only gives you insight into what’s working and what’s not?at every stage?but can also surface new opportunities to optimize your efforts.
For more resources on marketing analytics, check out: