3 Metrics Every B2B Marketer Should Know

Razzled-but-not-dazzled“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind: it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science.”
– Sr. William Thomas, Lord Kelvin

The number one thing that has set me apart from other marketers throughout my career is my ability, and willingness, to do math.  It is not enough to make things look pretty or budget for events.  You must be able to express very clear and useful metrics that drive a business forward.  Here are 3 that I believe every marketer should know off the top of their head if ever asked.

ROI: Return on Investment


This is the basic of the basic.  You should be able to rattle off exactly what your ROI is for major initiatives and for your year overall.  Although we all know this is very basic, most marketers don’t actually bother to calculate it or share it.

If you have a negative ROI it could lead to negative consequences.  However, if you can get ahead of the question, report your negative ROI, and outline causes for this you will, most likely, be viewed as a professional in the eyes of your management.  Entry level marketers hide bad metrics.  Professionals address them head on.

Equity Value Creation

This equation literally tells the business how much more valuable you’ve made it.  Not how much money you’ve made it, but how much you’ve increased the company’s value.

This is a tough concept for many marketers.  We focus on the bottom line and how much deals are worth.  But how much is the company worth?  If you CEO decided to put the company on the market, how much more valuable have you made it?

This is a critical metric for marketers for two reasons:

  1. You’re communicating how your influenced deals affect the attractiveness of the company directly
  2. You’re communicating how your more fluffy work, like brand awareness and sales enablement, are contributing to the overall value of the company – if not the quarterly sales directly.

Equity Value Creation Formula

Let’s break this down:

  • Monthly Revenue – look at how much your influenced deals bill on a monthly basis.  If you’re measuring something like “brand awareness” look at your monthly revenue a year ago and compare it to now.  Calculate the difference.
  • Expense Ratio – What percentage of your revenue goes to cover expenses?  If you don’t know, a good estimate is 50-60%.  Expenses cover keeping the lights on, employees’ salaries, paying contractors, etc.
  • Multiplier – A multiplier tells a potential buyer of your company how much more than your annual profits they need to purchase you.  This one is tricky.  If your company is not publicaly traded, you likely don’t know what your multiplier is.

    Here are a few good rules of thumb I got from BusinessTown:

    • An extremely well-established and steady business with a rock-solid market position, whose continued earnings will not be dependent upon a strong management team:
      a multiple of 8 to 10.
    • An established business with a good market position, with some competitive pressures and some swings in earnings, requiring continual management attention:
      a multiple of 5 to 7.
    • An established business with no significant competitive advantages, stiff competition, few hard assets, and heavy dependency upon management’s skills for success:
      a multiple of 2 to 4.
    • A small, personal service business where the new owner will be the only, or one of the only, professional service providers:
a multiple of 1.

Essentially this equation takes your Annual Profits x your company’s multiplier and generates the value of the company if someone wanted to buy it.  You can use this to communicate how much more valuable your company is now that marketing is doing x, y or z.

NPV: Net Present Value

“A bird in hand is worth two in the bush.”

A dollar today is worth more than a dollar you make a year from now.  Marketers often report metrics based on the total value of a deal, which makes sense.  But to take your marketing game to the next level, start reporting on NPV instead.  Net Present Value is how much the deal is worth today.  For B2B marketers we often deal with more expensive, longer term solutions.   It could be years before our company realizes the actual full revenue from a sale.  By calculating your ROIs with NPV instead of total deal you’re indicating to your leadership that you understand the deal loses value the longer it lasts.  It shows you’re a professional.

Here is the actual equation:

Image result for npv formula

But only college students do it that way.  If your CRM doesn’t already calculate NPV for you, here’s a website that will do it for you.  There is an equation to calculate your discount rate, but here’s a cheat I found online for all our sanity:

  • 10% for public companies
  • 15% for private companies that are scaling predictably (say above $10m in ARR, and growing greater than 40% year on year)
  • 20% for private companies that have not yet reached scale and predictable growth

That being said, most CRMs can do it for you.  Just customize your opportunity page to include the field.

How to do market research with no time or budget

Image result for market researchMarketers get asked to do a ton – branding, sales enablement, event planning, content creation, lead generation – it never seems to end.  It’s even worse when you have to do it all by yourself.  Here’s one more skill any marketing manager worth their salt needs to master – market research.  Dun DUN DUN!

Here’s the thing.  You don’t have to be a big data or industry analyst to do it.  You already have all the skills you need to do basic market research.  You don’t even need a budget.  Just the willpower to try.

Here is my step-by-step guide so that you look like a marketing rock star at your office:

Image result for audience1) Determine your audience

Who will consume the information?  When I produce reports I direct them towards two groups – sales leadership and product leadership.  You may need to provide useful information to your executive team or business development.  Figure out who you’re writing for and it will direct every decision from there out.

2) Create a report template

Image result for reportI find it’s 12x easier to do almost anything when I have a framework to work inside.  Here is the framework I use for my reports – feel free to copy or edit it for your purposes.

Header – States title and date

Industry News – I use this section to focus on news that is relevant for the entire industry.  This could include shifts in the market, new technology, or any other trends that may be happening at a macro level.

Competitor News – This section breaks down each of our competitors and what they’re up to publicly.  This could include product announcements, executive changes, public filings, important customer announcements – anything I think my audience would find valuable.

Word on the Street – Finally I have a section dedicated to the rumor mill.  Nothing is substantiated and nothing is verified – it’s just a few people’s opinions on a particular topic.  This is by far the most popular section month after month.  This is the stuff you’ll never read on a Google alert and is the hardest to capture.

3) Sign up for everything

Image result for sign upThere is a smorgasbord of information out there.  It’s your job to compile it.  Sign up for daily or weekly email updates from the following sources.  They get delivered to your inbox regularly and you won’t have to spend whole days doing research.  But it will look like you did.

  • Google Alerts – I recommend starting with 3-5 keywords that are most often used in your industry.  Then setup a Google Alert for each one of them.  Also set one up for each of your top competitors.  Every day you’ll get a few emails automatically from Google and you can file them away until you’re ready to read through them.
  • Business Publications – Whether it’s the Wall Street Journal or your local downtown newsletter, these things are packed with the best and most useful information you can find.  Most are free and are more than happy to send you a daily synopsis email.  Sign up for publications that cover your industry or geography or however you breakdown your business.
  • Industry Rags – Every industry has super niche publications.  Do a quick Google search and find them.  “_____ industry news” ought to do the trick.  I used to do marketing for the B2B drug testing industry.  My team tested workers’ comp patients for opioid abuse and marketed to risk managers.  You don’t get any more niche than that.  There were actually 3 websites I used that discussed little more than just this topic.  Trust me.  There are resources out there for whatever you sell.

4) Set a reminder to plug and play

Image result for copy and pasteNow set two 1-hour meetings on your calendar a month; one in the first half of the month, one at the end.  Open up that folder holding all your automatic emails and skim through them.  Click the links that interest you and copy/paste the best content into your report.

Be sure to include a link that reads “Full story” in case your readers want a deeper dive, but catch the high lights in your report.  Don’t include more than 2 paragraphs for any listing.  I actually prefer 3 sentences or fewer.  My audience is mostly made of VPs or higher so they don’t have time to read everything.  Get to the point and give them a means to learn more if they want to.

PRO TIP: No email to an executive should ever take longer than 30 seconds to digest.  Why do you think people created “executive summaries”.

5) Do some custom research

I mentioned my final, and most popular, section is called “Word on the Street”.  It never takes me longer than 2 hours to complete and it’s the most fun.Image result for research meme

  1. Identify a topic
    -Competitor pricing in a certain market
    -How a certain vertical uses your product
    -A new technology that your readers need to know
  2. Identify an expert
    If you’re looking at how competitors are behaving in a certain market, call the local rep that handles that territory and interview them.  What feedback is he/she hearing from local customers?  Where is your pricing being undercut?  What product/solution/competitor do folks love and hate?

    If you’re looking at a particular vertical, go for academics.  Professors love to talk – it is what they do for a living.  Let them tell you what a vertical needs.  Here’s an example.  I was doing a piece on the video gaming industry one month.  I found that Carnegie Mellon has an entire school dedicated to video game design.  I went to the website, emailed everyone listed and requested a 30 minute interview about the topic I was researching.  Within 2 hours I got 2 replies.  One of them, I later found out, also ran her own video game design company.  She was a wealth of information, was happy to let me pick her expert brain and didn’t charge me a dime.

  3. Write it all down.
    Take everything you just wrote notes on and translate it into something useful for your audience.  Stick it in your report.  Done.

6) Format and Distribute

You’ve collected all this information and interviewed experts.  Now you just have to put in a form that’s pretty and distribute it to your audience in a way they want to receive it.

After a year, what you’ll find is that you actually become the expert on your industry and people will start asking you for your opinion.  That’s when you know you’ve created something valuable.

Image result for expert meme