Modern marketing is and should be data-driven. Without reliable insights on the success of your initiatives, you will not be able to make informed decisions on how to best promote and increase the sales of your building materials.
But just what metrics best indicate success? How can you make sure that your key performance indicators (KPIs) are just that, rather than impressive numbers that don't lead to actual business and sales growth? To understand which key sales and marketing metrics you should track to evaluate and predict the success of your building materials, you need to consider the difference between outcomes and process metrics.
Outcome vs. Process Metrics
In tracking your metrics, be sure to always distinguish between these two general areas. Outcomes describe the real, economic impact a sales or marketing effort has made on your business. Process measurement, on the other hand, show your success in engaging building materials prospects on their way to ultimately achieving the outcomes.
Outcome metrics, at their core, are sales-oriented. They show your current revenue, sales growth, and other economic indicators of success. While process metrics allow you to evaluate the success of your individual marketing and sales efforts, tracking anything from email open rates to average number of sales touches per customer.
This distinction may lead some building materials companies to treat outcome and process metrics as separate entities. In reality, however, your sales and marketing efforts need to be closely connected for success.
A process measure like email click-through rate, for example, matters little if you cannot connect it to at least an estimate of the actual revenue this click could generate for your business. To maximize the success and optimize the integration of your sales and marketing efforts, here are 5 types of metrics you should be tracking.
1) Conversion Rates
This one is crucial. Your conversion rate should matter throughout your marketing and sales efforts. It allows you to determine anything from the success of an individual marketing initiative in terms of generating new customers to the average percentage of leads that actually impact your bottom line.
2) Sales Funnel Journeys
A second set of metrics is connected to how your leads move through the sales funnel. Here, you can track anything from the average number of emails your audience needs in its nurturing process and average sales cycle length to individual actions (such as emails or calls) that made the biggest impact in moving a lead to become a customer.
3) Revenue Per Lead
If you know your average customer value, as well as your conversion rate, you have everything you need to determine how much each lead is worth. That, in turn, allows you to prioritize your marketing and sales efforts on initiatives most likely to generate actual revenue, not only lead volume.
4) Retention Metrics
Once a customer purchases building materials from you, their likelihood of doing so again in the future increase greatly. Tracking your retention rate along with other, related KPIs allows you to build a marketing and sales strategy that is focused not just on growing your customer base, but maximizing the revenue potential of your existing base.
5) Lost Opportunities
Finally, don't forget about tracking the reasons why some of your leads opt against becoming customers. Understanding these reasons can be vital in both improving your marketing and sales strategy, and analyzing your competitive environment. A lead that does not convert because a competitor offered a seemingly superior product will provide very different insights than one whose interest was simply never high enough to actually become your customer.
Are you tracking these metrics and optimizing the promotions and growth of your building materials company? If not, it may be time to start. Especially if you are looking for ways to better integrate your sales and marketing efforts, finding the right KPIs to evaluate both your individual strategies and overall business growth is a crucial step.