Assessing the value of B2B marketing campaigns has been a persistent challenge for businesses. Unlike B2C marketing, where companies track the traffic source, conversion rate, and revenue, B2B demand generation involves myriad variables. Calculating demand generation ROI gets complicated due to the lengthier and multi-tier sales funnel. In addition, there are different consumer touchpoints, behavioural traits, and metrics that require consideration. Hence, establishing a comprehensive ROI evaluation framework is highly beneficial. More importantly, it helps understand which marketing strategies work best.
Here are five crucial steps for measuring B2B marketing ROI:
Maintain a Platform-wise Lead Tracker for B2B Demand Generation:
The first step to evaluating ROI is maintaining separate lead trackers for each platform or mode. B2B demand generation has various methods such as telemarketing, local SEO, email marketing, LinkedIn Ads, YouTube Ads, etc. If a lead is undergoing nurturing via more than one platform, allocate it to the primary mode. Steer clear of making multiple entries of the same lead on different platform trackers as it will wrongly inflate revenue.
Compute the Total Marketing Cost for Each Platform:
To put together the total expenses incurred on each marketing channel, both direct and indirect expenses need to be considered. Direct costs include the number of employees and their remuneration, infrastructure, electricity, maintenance, etc. If the entire marketing database has been purchased from B2B data providers, divide it equally between each channel. Similarly, other outsourcing costs fall under indirect expenses.
- Calculate both the Total and Average Revenue per Client for each B2B Demand Generation Platform: Getting the total revenue figure for every client doesn’t require much calculation. The figures are already there in the monthly revenue sheet and simply need to be summed up. The bigger challenge is to compute the average revenue per client for each marketing channel. For this, calculate the total revenue and divide it by the number of clients yielded by the particular platform.
- Calculate the Conversion Percentage for each Platform: B2B Data Providers and Data Analysts emphasise platform-wise conversion figures. While it is not a metric used directly in ROI calculation, it provides valuable insights into performance and efficiency. Just divide the number of conversions by the total number of leads and multiply by 100.
- Finally, Compute and Compare Cost per Lead vs Average Revenue per Client: While there is no fixed ROI formula, most data analysts and B2B data providers emphasize this method. For each B2B demand generation channel, compare the average revenue per client with the average cost per lead. If the former is higher than the latter, the ROI is positive. If that is not the case, it is best to rework the marketing strategies for the particular channel.
Conclusion
The most intriguing aspect of B2B marketing ROI calculation is that it is a highly subjective process. It differs from business to business, based on the industry, products/services, consumer profile, and sales cycle. While accuracy and constant monitoring are pivotal, keeping the evaluation process simple, easy to implement, and cost-effective is equally necessary. In this regard, the above guidelines are certainly noteworthy. Yet, the final process should be ideally chalked out by an experienced team of B2B marketers and data analysts.
Also Read – https://www.denave.com/resources/blogs/definitive-checklist-for-evaluating-a-b2b-data-provider/