TMAI #477: 🫶 Best CEO Dashboard KPIs: B2B!

[The Marketing Analytics Intersect, by Avinash Kaushik] [1]

TMAI #477: BEST CEO DASHBOARD KPIS: B2B.

[ Web Version [2] ]

Salesforce finding the next customer for a SFCC sale is a B2B thing.

Selling Cloud computing capabilities to startups is a B2B sale.

An Agency, say Dentsu, seeking new clients is a B2B sale.

Lenovo selling laptops to United Airlines is B2B, while selling me a

new Snapdragon laptop a B2C sale. Ditto for Spotify: Selling ads is

B2B, selling music subs at the same time is B2C.

B2B selling has nuances worth appreciating:

*

B2B sales cycles can be longer.

*

They can be a complex - you might have to persuade multiple layers of

the organization at the same time during the sale and at different

times months or years before the sale.

*

Contracts can be for larger sums of money or longer commitments of

time. Often the _sale _starts after the handshake, when you go

through a complicated Legal and Procurement processes (where things

can, and do, die!).

Acknowledging above, my experience has led me to form a dislike for

the belief that B2B marketing is special, that it needs to be boring

as heck, that it is needs _magic juju_ like ABM (which is just a

glorious pre-qual thing at best), etc. etc. etc.

B2B marketing is still trying to persuade humans at the end of the

day. Everything we know and have mastered about B2C marketing can help

us be gloriously great at B2B marketing. Brand marketing is even more

important for B2B, emphatically so.

Acknowledging that, as I think about B2B CxOs making smarter

decisions, patterns 1, 2, 3 above demand thinking differently about

the KPIs.

Today, on request from one of your Premium peers, I’m going to

tackle the hardest one to get right: B2B CEO dashboard.

SELECTING DASHBOARD KPIS [B2B OR B2C].

Three simple rules that shift a number from being a metric to being a

KPI.

A. ALIGNMENT TO BUSINESS OBJECTIVE.

KPIs are directly linked to a company’s overall sales goals and

objectives.

It is even better if the KPIs is selected due to its alignment to

business strategy – which sometimes could be to lose a lot of money

in the short term.

Leads submitted is a metric. CAC is a KPI. A movement up or down in

the former is helpful to know. A movement in the latter results in

immediate profit or loss at a company level.

Website traffic, top pages viewed, “social engagement,” all nice

and tactical. Not KPIs.

B. CLARITY AND CONCISENESS.

My deep distaste for compound metric is sourced from the reality that

the metric going up or down does not illuminate the underlying change.

To be on the CEO dashboard, KPIs should directly illuminate a key

dimension of a critical part of the business. This should do so

clearly – without requiring a minor PhD.

C. REGULARLY UPDATED AND ACTIONABLE.

Customer Lifetime Value is a good example of something critical to

long term business survival, but it does not belong on a CEO

dashboard.

CLTV does not change every month, or even every six months for a B2B

company because the contracts are long, foundational changes happen at

a slower cycle. Unless of course something catastrophic has happened

– in which case there will be other immediate signs/metrics.

CEO dashboards are typically monthly, the KPIs on it should usually

live on that rhythm.

SELECTING KPIS FOR CEOS [B2B OR B2C].

B2B or B2C… CEOs should not care about _activity_, they should only

care about _outcomes_.

If your CEO is asking you about the _traffic to the website _or

_reach of a campaign_ or _clicks _or, god forbid, _engagement_… One

of two things has gone profoundly awry:

*

The CEO believes that the Marketing team is incompetent, hence she

needs to go that deep to understand what is going on (and then proceed

to micromanage everything).

*

The CMO is doing nothing of consequence, hence needs to data puke

_activity_ to show _Marketing is doing something of consequence_.

The truth could be a combination of the two. But. Notice the

pattern.

You will notice zero presence of _activity _metrics below. I’ve

selected the very best of _outcome _KPIs, to draw out layers of

nuance re Marketing’s effectiveness.

I have also chosen _outcome _KPIs only for the CEO dashboard because

I want the CMO to have the full freedom to execute her budget, choose

her initiatives, however she feels optimal in her judgment.

_Activity _metrics kill that.

If you align with my recommendation, do a good job of the analysis

required (remember, IABI still applies [3]), I guarantee your

Marketing budget will go up by double digits each year – because you

are going to be that insanely effective at delivering value.

Select ONLY SIX from the eight below. [If you are a large B2B, ensure

#8 is one of them.]

You will notice they apply to Lenovo, Spotify, Dentsu, Google Colud.

The magic of being_ outcomes-centric._ 😜

BEST B2B CEO DASHBOARD KPIS.

Terms that will be used a lot:

LEAD: A record submitted into your CRM system.

MARKETING-QUALIFIED LEAD (MQL): A lead that passes the basic quality

filters Marketing applies before sending it to Sales. Ex: The lead

company’s fit with desired Ideal Customer Profile (ICP). Job title

of the individual. Complete contact information. Etc

SALES-QUALIFIED LEAD (SQL): A MQL that passes the quality filters

Sales applies before clearing the lead to be worthy of a

Salesperson’s time.

[CEOs only cares about the third one. Though B2B CMOs often

incentivize the first one!]

Your business might sell CRM software, Industrial Equipment, or Cloud

GPUs. With it will come some unique needs. Please select no more than

six of the most relevant CEO KPIs below.

1. MQL TO SQL CONVERSION RATE.

We all know the _scams_ 😊, pulled to get leads in. All those fake

email addresses you all are typing to download a “life altering”

white paper from the company.

The MQL to SQL Conversion Rate is clear, concise, regularly updated,

actionable.

The insight sourced helps identify the quality of the Marketing

enterprise by focusing on efficiency.

Is the top of the funnel growing, stable, or shrinking? Which

marketing channels are most cost-effective? Where do we need to shift

budget from? Ex: _If the trade show costs $100k, we need to generate

at least 200 MQLs at the cost of $500 each, or it is not worth

it. _Now, extend that math to SQL. Still worth doing the trade show?

2. QUALIFIED PIPELINE CREATED.

The Dollar/Yen/Euro value of SQLs created by Marketing for the next

two quarters – it is a measure of Marketing’s effectiveness.

When you present the data in the dashboard, cohort by _opportunity

create date_, and show forward pipeline by close quarter.

The insight sourced is an early read into whether future revenue

targets are coverable by Marketing-sourced demand.

3. PIPELINE VELOCITY.

Velocity = (#SQLs _ Win Rate _ Avg. Deal Size)/(Sales Cycle in Days)

The insights are sourced from the ability to identify the true

constraint between volume, conversion, value, or time.

Is our sales cycle getting longer, shorter? Are enough SQLs being

generated to _feed the machine_? Is our Win Rate improving? What needs

to change about our business model to increase the average deal size?

Tips: Use medians for cycle and wins to reduce skew. Compute by

segment and by source, every quarter – segmentation is always your

BFF.

4. CAC PAYBACK.

Months to recover fully loaded Marketing costs from Gross Margin of

new customers acquired in the period.

On the dashboard, show this KPI by channel and by cohort (by

opportunity created).

Tips: Ensure you include media + content + tools + team + agency +

events cost (if relevant). Fully loaded means fully loaded. Revenue

will be on a Gross Margin basis, and include churn within the first 12

months. Segment by major channel/initiative.

Typically, you’ll scale investment in channels with less than 12 or

18 months payback, eliminate those with greater than 24 months.

(Adjust both per your business facts.)

The insight sourced identifies the speed of Marketing investment

recovery, and the scale potential of each channel.

5. MARKETING-INFLUENCED NEW ARR.

If you are asked _what is the ROI of our B2B Marketing spend_, this is

the KPI that offers my favorite answer.

New ARR (or gross profit) in the period where Marketing either sourced

the opportunity or significantly influenced it.

Depending on your company’s analytics maturity, you can use _first

touch attribution _rather easily or you can implement multi-touch

attribution ONLY IF you have the ability to validate the model with

geo-based tests on major investment channels.

Ideally, of course, you measure _marketing-influenced _using

incrementality experiments longer than your median sales cycle OR

marketing-mix models (with robust trust, but verify).

The insight sourced is the most critical one: How much revenue does

Marketing truly drive?

NOTE: In numerous B2B companies, the actual closing of the deal is

done by Sales. In that scenario, Marketing-Influenced New ARR has that

other unknown variable (Sales Effectiveness, Sales value) that should

be accounted for. It is unwise to assume that as a constant as we dole

out credit to Marketing! 😊

6. PRODUCT ADOPTION RATE.

(Number of Users who use feature x)/(Total number of Active Users)

In a smartly deployed B2B Marketing org, a decent chunk of Marketing

will be directed towards existing customers. Say, to reduce Churn

Rate.

By, getting them to use the new “more sticky” features that

Engineering has released. That gets LTV to go up too. The

“Marketing” could be in-app, it could be via email, it could be at

a customer event, or even on the tech support site.

Product Adoption Rate driven by Marketing, hence is a fantastic way to

measure value added beyond just “filling the funnel.”

The features are identified by Engineering, ideally they would be

built with an eye towards high customer retention rates.

7. LTV: CAC RATIO.

More often than not cited as the most strategic metric. It measures

the long-term profitability and scalability of your entire

go-to-market strategy.

Lifetime Value (LTV) =

((Average Annual Revenue per Customer)×(Gross Margin %))/(Customer

Churn Rate)

Customer Acquisition Cost (CAC) =

(Total Sales & Marketing Expenses)/(Number of New Customers Acquired)

As recommended above, CAC must be fully loaded. Salaries, bonuses,

ad spend, software tools, event costs (if relevant), content creation,

agency fees, etc. When computing CAC, the time period should be

consistent, say quarterly.

The insight sourced can help capital allocation, pricing, and business

model strategies.

A ratio of 5:1 typically indicates underinvesting in Marketing –

great efficiency in acquisition, room to spend more. A ratio of 3:1

indicates a sustainable and profitable business model. A ratio of 2:1,

or less, indicates excessive spend to acquire customers relative to

their value – if you do this, also calculate how long before you go

out of business.

NOTE: I have expressed skepticism that you can attribute an entire

lifetime of revenue from any customer to initial Marketing. [LTV is

not Marketing's friend. [4]] LTV should be a COMPANY-LEVEL KPI, not

a Marketing-justification KPI. But. You are going to get asked to

report this metric, so read my concerns, report if you are pressured

to.

8. LONG-TERM BRAND RESONANCE.

There are a number of ways to solve for this, depending on your

company size and complexity.

You can compute your branded search volume vs. key competitors each

month (on Google, in the future ChatGPT). You can compute Unaided

Brand Awareness (UBA) via a quarterly study on LinkedIn. You can run a

Brand Tracker against a quote of ICP titles using a consistent

approach every six months (again measuring UBA).

I recommend the last one, it is the broadest view of the universe –

and the hardest for Marketing to move, hence perfect for a CEO.

Measure it every six months. Using the shortest possible survey

possible, via the most reputable vendor you can find.

The insight sourced can help you understand if your CMOs hobby of

putting your logo among 150 in the suit of a F1 driver is helping

anything (it won't) or that F1 driver patch was responsible for a 30

point jump in UBA, in which case your CMO sincerely should be the next

CEO!

BOTTOM LINE.

The best CEO dashboards are simple, exclusively outcomes stuffed, and

supported by IAbI that delivers the_ why_ behind the performance.

The best CEO dashboards don't explain Marketing, they explain

Marketing's incremental impact on the business - and ask for more

budget.

Carpe diem!

-Avinash.

PS: I feel the calmest in the deep ocean. Just a man, his snorkel,

and a camera. And... The sharks, giant bumphead parrot fishes, mantas,

and a million little creatures in hard and soft coral. Hello from

_Raja Ampat,_ please forgive the spelling mistakes in this newsletter.

;)

A favorite this time around... The Blue Dragon Nudibranch

(_pteraeolidia semperi_)...

IMHO, the most fascinating creature on the planet, the Mantis Shrimp

[5]...

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