Defining KPIs for a B2B Lead Generation Service
If you are considering hiring an outsourced lead generation service instead of building an internal sales team, you’ll need key performance indicators (KPIs) to measure their performance.
Our guide will show you how to evaluate success for an outsourced lead generation vendor using concrete metrics and trackable criteria.
What KPIs Should I use to Measure Outsourced Lead Generation?
Businesses track KPIs to validate decisions, direct activities, justify new actions and intervene with corrective measures. As a founder, identifying which KPIs will work best for your startup is your first challenge.
To identify the appropriate metrics to be tracked, you’ll need to look at the makeup of your business. Mapping out your product life cycle can be useful for determining KPIs, and ensuring that your sales funnel is optimized is important if you want to accurately calculate the success of your reps’ demand generation strategy.
Most founders will find that these key KPIs are excellent indicators of how your agency’s lead generation campaign is performing:
Click-through Rate (CTR)
CTR is an interesting KPI for a B2B startup to track, as it proves how engaging a campaign is and therefore how valuable it is. This could be your landing page, content marketing like a white paper, Google Ads, or a marketing email. To calculate your CTR for a specific call to action, divide the number of clicks by the total number of visitors/viewers and multiply that by 100.
Your lead conversion rate is perhaps the most important KPI to track. This metric tells you how many potential customers responded to your agency’s messaging, and therefore how well their marketing strategy is doing. How you define a conversion will depend on your campaign goal, but as a guide, we recommend that you track:
- Visitors to lead – how many visitors become verified leads.
- Leads to opportunity – how many qualified leads progress through the buyer’s journey.
- Opportunity to confirmation – how many prospects turn into paying customers.
To calculate your conversion rate, simply divide your number of conversions by the number of clicks your campaign has had. To get this figure as a percentage, multiply it by 100.
Other useful KPIs for B2B external sales reps include:
- Calls and emails made – the average number of activities undertaken by a sales development rep in one day is 94.4. Lead nurturing typically takes 7-10 touches to convert, so this metric will give you an idea of the conversion rate you might expect to see.
- Customer acquisition cost (CAC) – This metric helps determine profitability and effectiveness. To calculate CAC, take your entire sales and marketing expenditure over a certain period and divide it by the number of customers acquired in that same period.
- Sales response time – Replying to sales-ready leads within five minutes is 100 times more successful than responding 30 minutes later, so you need to know that your vendors are responding to inquiries efficiently.
How do I Assign KPIs to a Lead Generation Vendor?
When devising KPIs for your lead generation vendor, simply dictating a list of KPIs to your agency won’t work. A good external vendor will collaborate with you to determine ambitious yet realistic goals for them to work towards.
Keep in mind that it can take a couple of months to get the right balance with your targets, so keep an eye on your metrics and make it clear to your reps that you expect complete transparency and regular progress updates.
How Can I Track These KPIs?
Once you’ve determined your KPIs and assigned them to your lead generation service, you’ll need to find a way to track them.
For website-based KPIs, Google Analytics can be used to measure things such as bounce rate. This helps determine whether your audience is responding to your marketing efforts as you’d expect them to.
For all other sales and marketing metrics, Salesforce is a great platform that allows you to create dashboards for individual sales reps. Another option is Grow, which connects to financial, CRM and marketing applications such as QuickBooks and Google Ads.
To know exactly how often you need to track and report your KPIs, you’ll need to consider a few factors:
- Sensitivity – If you made improvements today would you expect to see a change in your business in a matter of months or years? If it’s the former, review your KPIs every six months. For the latter, annually is enough.
- Urgency – If your startup’s revenue is close to the wire, your KPIs will be more important than ever and should be measured at least monthly.
- Development – If you’re in the stage of your business where you aren’t making big changes, performance is unlikely to change so you can review your KPIs annually.
- Sales cycle – if your customers buy from you frequently, you should review your KPIs regularly. If your customer purchase cycle runs on more of a 12-month cycle, metrics can be measured on a similar schedule.
How do I Know if I Should Change a KPI?
It’s important to know when a KPI should be changed or removed. Here are some useful criteria to help make that decision:
- If a goal is consistently being met there’s likely no room for further improvement, so your attention can shift to a new target.
- If your focus has shifted and another aspect of your business requires your team to work on improving it.
- New business strategies or financial targets may require a different marketing campaign, so your current KPIs may no longer be relevant.
- Changing your process, product or service may also mean that KPIs need to be changed accordingly.
Hiring an external agency to generate leads on your behalf can be nerve wracking because you are essentially giving someone else the power to make or break your business. But, by defining KPIs for a B2B lead generation service it’s easy to track whether your chosen agency is achieving the lead gen results that you expect from them.
Interested in developing KPI’s for your own lead generation process? Book a free strategy session with us here.