B2B Brand
Marketing Guide
Measuring ROI
In the previous chapter we examined the key brand metrics to report to the board and how brand equity is measured over the long term in the balance sheet. In this chapter we’ll move on to measuring how your tactical sales activation marketing has performed in terms of business generation. The results will be accounted for in your P&L.
Board report section 3: business generation
For the next section, you’ll start with performance metrics. This is where you demonstrate the marketing spend on direct response/ABM marketing to generate leads for the period, and what was delivered in return. For the board report, this should include:
- Total spend on media, production, agency fees etc.
- Return on advertising spend (ROAS) – Calculated by dividing the revenue generated by the total media spend.
- Return on investment (ROI).
ROI is more difficult to calculate, as it shows the amount of potential profit generated from the budget as opposed to the revenue generated in the ROAS calculation. You’ll need to work with your finance team to gain a picture of the average profit margin for each of your products and services, matching these against the records of what has been ordered in your CRM. If you’re purely a service business, the potential profit may not match the actual profit due to overruns.
Pipeline value
Sales cycles can be long, so your ROAS and ROI will show a trailing value. To give a holistic view, you may also show the value in the pipeline as estimated by your sales team.
Revenue growth
This should show the revenue generated from customers who entered the prospecting funnel through marketing activity and were converted by sales. The report should present figures for the period since the last report, and highlight the trend over previous reporting periods. Ideally, it will split this into revenue from tracked direct-response campaign activity against brand response (originating from website leads and inbound calls/RFP requests).
Other growth metrics
To supplement the top-line revenue figures, include the number of customers acquired and the average order value. You may also want to breakdown the results into segments of strategic importance such as industry and regional growth.
Quality metrics
To demonstrate the quality of leads generated, measure the conversion rates from lead to sales qualification and customer. Again, present these for the reporting period, as well as showing the trend over previous periods.
Less clutter. More clarity.
There’s a wealth of data you could present to the board, so don’t let us limit you. We’re simply suggesting the core metrics that will strategically demonstrate how effective your marketing activity is.
Don’t overwhelm your executives with data. Stick to what matters to them and avoid the temptation to try and look clever by throwing the kitchen sink at your report.
You may choose to add other information to provide further detail, but always remember that the key to effective reporting is clarity. Don’t overwhelm your executives with data. Stick to what matters to them and avoid the temptation to try and look clever by throwing the kitchen sink at your report.
Key takeaways from this chapter
- The results of your lead generation/ABM campaigns will be accounted for in your P&L
- There will be many tactical measures which your team will track to optimise results. However, the top-level report for the board should focus on:
- Total spend on media, production, agency fees etc.
- Return on advertising spend (ROAS), calculated by dividing the revenue generated by the total media spend
- Return on investment (ROI), showing the potential profit generated from the budget, as opposed to the revenue generated in the ROAS section
- Pipeline value