Whether setting up goals for lead nurturing prior to its implementation or evaluating your already-existing strategy, there are certain key metrics that can not only prove the effectiveness of your lead nurturing program but also help you to iteratively improve it.
Can Marketing Automation Handle Effective Lead Nurturing?
Lead nurturing increases lead engagement and sales readiness. If done right, it can shorten your sales funnel and re-shape it to be more of a sales “pipe”. As the lead nurturing process usually consists of repetitive steps, a marketing automation workflow makes sense. But to avoid losing quality and the human touch of manual lead nurturing, marketing automation must be well-thought-out and provide great content through various channels that is, above all, enriched with personalization. Only then can your lead nurturing strategy be fully covered by marketing automation.
What Are Your Lead Nurturing Program KPI’s?
One possible way to evaluate the impact of your lead nurturing program is to compare specific metrics before and after implementing it. While “ceteris paribus” is difficult to ensure over a longer period of time, an alternative and more accurate method of evaluation is to divide your leads into two groups of similar size. One group of leads will be processed by your automated lead nurturing program and appropriately tagged so you can later compare these and those who received no lead nurturing.
Of course this greater accuracy is paid for with time, as this approach will take at least the length of your average sales cycle to bring in its first measurable results. And of course in this scenario, one group of leads is left without any nurturing.
The following metrics should also help you to not only validate your efforts and investment in lead nurturing, but also help you track the success of your ongoing lead nurturing program:
- Unsubscribe rates -- used with email drops as part of your marketing automation. Unsubscribe rates measure how well you hold your subscribers' interest over time. High unsubscribe rates signalize either inaccurate targeting, which calls for an adjustment in your buyer personas, or weak content. Rates above 1% call for your swift action. This metric should be part of your dashboard for a quick response to content apparently not appealing to the reader.
- Response rates (Open/Click/Conversion rates) -- represent the percentage of leads that performed an intended action. Response rates provide additional insight into the quality of the content you are providing. You might compare these with your standard rates or industry rates. If you tandem your creativity with AB and multivariate testing, you can considerably improve these rates on an ongoing basis.
- Average engagement points per lead -- as the main aim of a lead nurturing program is to turn cold leads hot, one of the metrics you should see skyrocketing is lead engagement. If you have lead scoring in place, you should compare the lead scores (or better still, just the engagement scores) of your nurtured leads with those untouched by nurturing. A drop in lead engagement scores is an early warning that you need to update content being used in your lead nurturing program or consider targeting your leads via new channels.
- Percentage of leads who performed certain lead activity -- while comparing average engagement points of leads that has been nurtured with those untouched will always bring positive results; it’s worth focusing on a particular activity that makes the most sense from a business perspective. These might be comparing the percentage of 1-on-1 meeting requests, add-to-basket actions, or purchase page visits counted in groups of nurtured and un-nurtured leads.
- Percentage of MQL/SQLs/opportunities/sales -- percentage of a chosen group (e.g. Marketing Qualified Leads-MQL’s) among all leads. The best for validating your marketing efforts is to measure the number of SQL’s within the groups of nurtured and un-nurtured leads, as it shows how many extra sales-accepted leads have been created without any additional explicit spending in your current lead generation program. It’s also worth comparing any increase in MQL’s and SQL’s. If the increase of MQL’s is significantly more progressive than the increase of SQL’s, this might point to mistakes within your lead scoring rules (and you might want to read the article: The 5 Most Common Lead Scoring Mistakes).
- Sales cycle time -- the length of time it takes for a lead to become a customer. Well-performed lead nurturing should shorten your sales cycle, which should not only result in financial benefits but should lead to higher close rates and better prediction of future sales opportunities.
- Cost per MQL/SQL/customer -- the cost per customer acquisition should decrease as you should be getting more customers from the current pipeline (i.e. without additional campaign costs). Of course this is only if the cost for your marketing automation is lower than these gains.
- Revenue per customer -- Interestingly, lead nurturing doesn’t only increase the number of customers, but, due to well-tailored and targeted educational content, it also helps to cross sell additional items and upsell more expensive items, upgrades or other add-ons. A highly engaged lead is often also a well-informed lead that, in the end, secures higher revenue per customer.
- Return On Investment (ROI) -- Knowing both your revenue and cost per customer, you can add the all-embracing metric of return on investment by dividing these two.
Lead nurturing is the guiding of the lead from their cold state to one close to the actual sale, therefore the reporting of the metrics above require either one system or a tight integration of multiple systems, such as your CXM (CMS) and CRM, to store all the information of your customer journey -- from your anonymous website visitor to your customer.
As marketers are no longer only responsible for generating a high volume of leads, but also highly relevant ready-to-buy prospects, these metrics should become an essential part of the online marketer’s dashboard.
What are the key metrics that you use to evaluate your lead nurturing? Tell us in comments below!
Editor's Note: Another great article from Petr -- TESTED! Personal vs. Business Email Contacts on B2B Websites [Infographic]