How to Measure the Success of a Demand Generation Campaign?
Imagine playing darts and never following up on your shot. You’ll never know if you need to and how to get better. That’s exactly what happens when you don’t measure the performance of your demand generation campaign.
In order to grow, one needs to analyze their actions. B2B demand generation works out only if there’s the right tracking involved.
What is Demand Generation?
Demand generation is a process that aims to generate awareness and induce interest in your products and services. And, every stage of the marketing funnel involves some kind of demand generation strategy to make this goal successful.
But, merely creating the strategies is not enough! It’s important to evaluate every step we take to make the demand generation funnel smooth and more effective. 66% of B2B marketers said that improving their ability to measure and analyze their marketing impact was a top priority.
Now, measuring the success of a demand generation campaign isn’t hard, you just need to know the right metrics. And we are here to help you with that. You can measure your performance correctly in two steps. Let’s learn about them?
1. Define KPIs
Having a systematic approach to measuring performance is the key to making the right decisions. Once you know what you want to achieve through your demand generation plan, the measuring process gets easier. Hence, you need to define your KPIs very carefully before you begin the demand generation process.
For those who don’t know, a KPI is a key performance indicator. Basically, any quantifiable element that helps in determining the success of an organization’s actions. These KPIs are helpful in understanding your progress along the way. Here are some KPIs that you need to keep an eye on:
(a) Number of Meetings Generated
Start with knowing how many people actually plan to learn more about your business and services. Keeping a track of your most qualified leads is important. This is the number of people who actually booked a meeting with your sales team. It means that they are Sales Accepted Leads (SALs).
But why should you track this? We’ll tell you. While a lot of people might give you their contact information, not everyone will be interested in making a purchase. It’s obviously important to keep track of all leads. But, it’s extremely important to note what leads are actually ready to become customers. This is a great way to know how your demand generation campaign ideas are working.
(b) Number of Opportunities Generated
To calculate the number of opportunities generated, begin with tracking the number of visitors who turn into leads and then examine how many of these leads are turning into opportunities. These opportunities are leads that you pitch to. This will define the credibility of your lead scoring system and make your demand generation marketing fruitful. You can then evaluate how many of these opportunities actually turn into paying customers.
(c) Average Deal Size
Average deal size refers to the average value of every new customer (in dollars). Simply divide the total revenue generated in a certain period of time by the number of deals closed in that period.
This will help you determine the revenue generated by your demand generation strategies. You can then target increasing your marketing revenue by focusing on the right set of prospects.
(d) Sales Pipeline Value
First of all, for those who don’t know, the sales pipeline value is the number of opportunities that are expected to close within a certain period of time. When the number of sales-qualified leads generated in your pipeline is multiplied by the overall win rate percentage of your sales team, which is then multiplied by the average deal size (in dollars) and divided by your current sales cycle (in days), you get your sales pipeline value.
This helps your sales team check how their pipeline is performing. You can also measure the percentage of your demand generation marketing’s contribution in the sales pipeline to measure your marketing’s team success rate.
(e) Customer Acquisition Cost
Generating clicks isn’t enough. Those clicks need to turn into revenue as well. Customer Acquisition Cost or Cost Per Acquisition(CPA) is one of the most important demand generation metrics. It helps you determine your return on investment. CPA helps you determine your financial success as it helps you estimate the amount of money it takes to acquire a paying customer through a demand generation campaign.
The above image depicts the formula for cost per acquisition. As you can see, it’s pretty simple. You just have to divide the cost spent on acquiring customers by the number of customers acquired. Ultimately, your demand generation strategy should aim at minimizing your CPA.
(f) Cost Per Lead
Cost per lead is similar to cost per acquisition except that it calculates the cost of acquiring a lead and not a paying customer. Calculate it by dividing the campaign cost by the number of leads generated.
You can determine whether your campaign is cost-effective or not with this metric. And this can help you calculate how much you should spend to make your demand funnel smooth. Make sure your revenue from leads is more than the cost incurred on acquiring them.
(g) Customer Lifetime Value
CLV or Customer Lifetime Value helps you calculate how much revenue a customer will generate for you throughout their association with your business. It’s the average value all your customers generate for you. It helps you determine the profitability of individual campaigns.
As displayed above, CLV is calculated by first taking into account the average purchase, number of purchases, and the average profit margins to determine an average yearly profit margin per customer. This yearly profit margin is then used with your customer retention rate to calculate the customer lifetime value.
Furthermore, CLV reveals how well you’re engaging with your customers and whether you need to get better or not. It’s mostly used in conjunction with other metrics like cost per acquisition to examine the overall profitability of your demand generation campaign.
(h) Average Sales Cycle Length
Do you know how long it takes for a prospective lead to finally turn into a paying customer? That’s what an average sales cycle length is.
To find out your average sale cycle, you need to add the length of each deal together for a total of 40 days for all sales combined. Then, divide the number of days by the number of deals to get the average length in days.
You can choose to determine the average sales cycle length per deal or for your entire campaign. The former will help you determine which channels are actually bringing in the most value. A shorter average sales cycle length tells you that your campaign is efficient.
(i) Revenue Generated Against Budget Investment
The title says it all, doesn’t it? You just need to calculate how much you are earning with respect to your investment. Take the money generated from a campaign, subtract the marketing costs, then divide that number by the marketing cost. Simple!
We help our potential users figure out the return on their investment with Outgrow before they even do any investment with us through this ROI calculator. Aren’t we adorable?
2. Track Data Over Time
Demand generation can be a long hectic process for some organizations. And measuring performance can get even harder when there’s no-one to compare to. Comparing metrics to industry standards might not always be fruitful, especially for startups. Thus, it’s better to track data over time.
Spend time measuring success against yourself. Ensure that your demand campaigns are yielding the results that you want by tracking channels and sources on a regular and individual basis.
The demand generation funnel expects time and patience from you. So, don’t hurry for results. Give the measuring process some time and thought. Well-thought tracking will lead to better results. Examine your metrics and see how they relate to your strategies.
We like to compare our performance too. And, we do this with our compare tab. This tab helps us evaluate which content piece is performing better and which one needs more effort. Easy-peasy-lemon-squeezy.
Check out this cool Compare tab by starting your free trial here.
What to Keep in Mind While Measuring the Performance of a Demand Generation Campaign?
While defining the key demand generation metrics, one must ensure that there’s nothing blocking or disrupting the process in any way. So, here are a few things that one should keep in mind:
1. Targeted Marketing
Targeted marketing means identifying a target audience who is likely to buy a certain set of products and services from you and promoting those products and services to that audience. Targeting campaigns are important. They help you generate the maximum ROI as you take your product to people who actually need it. Furthermore, this improves your lead quality and conversion rates.
Interactive content makes targeted marketing easy as it offers customization. For example, for someone who’s looking for body lotion, you can target them with a Skincare Quiz. Through this, the user gets personalized recommendations and a CTA to finally make a purchase. This results in successful demand generation marketing.
2. Multi-Touch Attribution
Multi-touch attribution is a marketing technique that assigns credits for sales and revenue to touchpoints across the customer’s journey. This helps in building an integrated system that further helps in creating a stream of insightful data that can be used to make marketing decisions.
Every touchpoint a prospect has with your brand influences their decision of finally turning into a customer. Multi-touch attribution helps you understand the role each touchpoint plays in creating a new customer and contributing to the revenue. Furthermore, this helps in designing new demand campaigns accurately.
3. The Small Picture
Many a time, marketers forget to look at how the little things work for them. While measuring the success of a demand generation campaign, it’s important to observe the performance of every little action you take. Every stage of the marketing funnel is supposed to generate good results (micro-conversions) and not just the final step (macro conversion).
Measuring campaign performance should be a regular step so that you can improve constantly. Maintain a structured approach for measuring small details. We are very particular when it comes to measuring campaign performance. We have a performance tab that tells how we are doing and how we can do better. Trust us, there’s always scope for improvement. 🙂
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4. The Sales-Marketing Friendship
A good B2B demand generation campaign works when the entire team works together. Your marketing team doesn’t want to reach out to someone who is already a sales-qualified lead. And, this chaos can be avoided with proper communication. Make sure your sales and marketing teams are always working in cohesion with each other.
Employing interactive content can be a great way to enforce sales-marketing alignment. The marketing team needs to target the audience with the right kind of content at the right time in the funnel. When this happens, the sales team gets the required information about the prospect and their position in the funnel. Since interactive content collects not only leads about also the user’s response, it gets easier for the sales team to gauge the user’s level of interest and preferences to make the pitch.
Measuring a demand generation campaign is a continuous process and one only gets better with time. Moreover, do not expect overnight success while tracking your outputs. Patience is important while you determine what works for you and what doesn’t.
Just keep in mind that what’s amazingly profitable for someone else might not be that wonderful for you. Track your progress against your own efforts. Demand generation requires you to put in extra effort as it gives good results in the long run.
And now that you know some excellent features and benefits of using interactive content for boosting your demand generation metrics, why don’t you try creating your own interactive content for free? Sign up here for free and get started!