What metrics do you recommend marketers use to track the success of their demand generation efforts?

Here are three metrics most marketers don't think about, but that clearly relate to demand generation and mean a lot to the c-suite:

First-Month Customer Satisfaction. One month in, most customers haven’t yet realized the value of the product or service. But they should already have developed an opinion of how well what they’re now experiencing matched the expectations set by the sales rep. If your sales team is selling right – setting the right expectations, selling on outcomes & benefits instead of features – the customer should know exactly what they’re getting into and have a solid satisfaction level even in the first couple weeks.

Average Selling Price vs. Team Average or Expectations. Simply put, is the average deal size from each rep living up to expectations? Is an individual rep performing better or worse than the team average? This is an important and often overlooked metric, especially in markets where small deals take just as much work to close as large deals. Your reps may feel good about closing the small guys, or feel good about closing the “back up” sale of a smaller product to a bigger customer, but is that where their (and your) time is best spent? Make sure your reps are going after big-enough deals.

Current vs. Previous Territory Performance. Sales teams too often ignore historical performance. They don’t use the precedents set in previous selling periods or by previous sales teams to predict or expect future performance. Let’s say you have an experience rep working a new territory or vertical industry. Is their performance dramatically different than what you saw from that territory previously? There may be good reasons – you may be saturated, or inventory could be low. But if you’re seeing significantly lower performance vs. what was previously achieved, it could be a sign that potential sales are somehow being left on the table.

Lauren,

We've spent a lot of time thinking about this and going round and round with Sales. We've decided that Marketing will focus on how many Marketing Leads we generate and how many we're able to convert into Marketing Qualified Leads, or in our system, people who are ready to talk to either our Lead Qualification team or a Sales Rep. This is all well and good but we're also looking at conversion rates and the number of MQLs that turn into Opportunities as a measure of quality to supplement quantity goals.

To make a model for determining how many Marketing Leads we need to generate we built a model that accounts for an overall revenue contribution amount and our average conversion rates all the way through to closed won deals. Since Marketing loses control over the process once a lead is passed to a person, we're only fully accountable to our top of the funnel numbers.

Let me know if you have any questions, this stuff can get complicated quickly.

Marko Z Muellner
Director of Marketing
Webtrends

We've been looking at this issue a lot lately. We compete in B2B and based on how we do things around here, the top three measurements of "success" are related to revenue as Michael Brenner suggests. Specifically, I measure the following:

1. Not only the dollar volume of revenue that demand gen originated, but the percentage of the whole. My department has the dual goals of originating a specified dollar volume of new business AND the goal of originating at least 50% of total revenues.
2. MROI. We measure the total revenue return the company receives for every dollar they invest in demand gen. That gives us a X:Y ratio. We need to exceed a 4:1 ratio at a minimum and shoot for 10:1.
3. Progress over time. We measure to the same quarter a year ago to measure the % improvement of revenue and MROI compared to a year ago.

Based on these three things, I'm able to not only demonstrate our contribution to the company's success, but I've also been able to increase my budget by over 1,200% over the past two years.

Everything else helps us with in-flight optimization along the way so we can consistently hit the above goals. This includes measurements like:

- The dollar amount of opportunities (pipeline) that was originated from demand gen compared to goal.
- The lead-to-opportunity ratio. We've identified that for every 1% improvement in this ratio, it translates to $1.1 million in revenue.
- Volume of high quality leads compared to goal.
- Lead quality in terms of 1) fit and 2) interest level (we use a bi-variant scoring system)
- Campaign and channel effectiveness
- Cost per lead / opportunity / closed deal
- Time between high quality lead creation and contact (huge conversion improvement when we can contact someone within 5-10 minutes after the lead is created)
- Effectiveness of our nurture campaign. Only 11% of our leads are "sales ready" so we employ marketing automation to go to work on the rest. We measure the dollar volume of opportunities that stem from these drip campaigns.

Matthew Bowman
Director - Head of Demand Gen
Allegiance

I will second that success is solely based on revenue. Leads are good but if they are not converting to sales, those leads are worthless.

Inside the lead gen domain you can optimize on landing page conversion rates and other metrics that define efficiencies to generate traffic to the landing page. However, if they ultimately are not selling or you are not getting your money back, time to find a new source of leads.

Also, it is important (at least for us) to see through the sale and account for any cancellations. This gets more complicated because how do we know if they cancelled because of the lead source, sales rep tactics/promises, or customer experiences. We know because we ask. If they say its because they were promised one thing and got another, then we know it was poor sales tactics. If they are unhappy with something else like support, then we know its a customer experience issue. If it's neither, then we assume it is lead source.

Just remember...poop in = poop out