What Are the Most Important B2B Marketing KPIs?

Key performance indicators—KPIs are possibly the most informative tools in your arsenal for data-driven decision-making.

There are quantitative, qualitative, leading, lagging, directional, and actionable indicators. Then there are input and output indicators and process and practical indicators. Finally, the KPIs your accounts department and C-suite will pay the most attention to are the financial indicators that dictate whether you’re slowly sinking, staying afloat, or growing with the most substantial potential.

Is your head spinning yet? Don’t worry—we’ve got you. When picking out relevant B2B marketing KPIs for a SaaS project, we’re here to help narrow things down.

The KPIs relative to you are those directly aligned with your goals. And in marketing, it’s all about generating leads, conversions, customers, costs, and, of course, profit.

What’s so good about tracking KPIs?

• Data delivers informed decisions – Guessing gets you nowhere; it’s proven data that develops conversions.
• Qualified leads provide the highest ROI – Tracking your sources through KPIs shows you who your qualified leads are and where they come from, painting a picture of your ideal customer.
• Identifies your most valuable marketing spends – KPIs don’t just show you where your biggest converters are, but those who offer the best value and where your cost allocations are most efficiently utilized.
• Understanding the needs of your ideal customer – An ideal customer profile (ICP) helps you track down the most likely leads and spenders. KPIs show you what they look like, where you’re most likely to find them, and the best ways to lure them in.
• Testing streamlines performance >– A/B or other testing is redundant without measurable results.

So, with no further ado, let’s jump into our list of crucial KPIs for SaaS.

1. Customer acquisition cost

Customer acquisition cost (CAC) = Total marketing budget / Number of new customers

Customer acquisition cost is how much you have to spend to bring on board each new customer.

The lower the number, the better— it means you’re getting the most value from your marketing spend.

Tracking your CAC over time shows whether you’re improving your marketing successes or falling behind. Also, tracking customer acquisition costs per campaign is a great way to see what's working and what isn’t doing quite as well.

CAC is a big one. Everyone at the top of your organization is looking at metrics, too, although often different from those you’re most interested in.

They’re looking at the money—always the money.

Profit, ROI, share value, growth—it’s all about how much money they’re making and their success in the bigger business world.

Cost is a big deal, and when running an operation of size, there are costs by the thousands. To deliver the information they want to hear, you’ll need to provide accurate and easy-to-understand figures and reports, showing them just what a marketing superstar you are.

2. Cost per lead

Cost per lead (CPL) = Advertising budget / Number of new leads

Whether it's the total figure for all your campaigns or split between them, working out the cost of the leads you feed into your funnel reveals some great data.

It’s a vital KPI during paid marketing; as we all know, more expensive ads may convert better than cheaper ones, so it’s not about how much you save but how much value you get from differing opportunities.

3. Customer lifetime value

Customer lifetime value (CLV) = Annual profit from a customer x Years as a customer – Customer acquisition cost

Your customer lifetime value data helps you understand your ideal customer profile. They’re the ones you want more of; those who spend well and keep spending.

Profit means prizes, so monitoring this essential KPI can help drive the direction of your campaigns to attract your ICPs, also deciding on what’s feasible to spend acquiring a typical customer.

Customer lifetime value is about long-term income and profit, so the big marketing question is, what can you offer your customers to keep them buying and on board for as long as realistically possible?

4. Traffic to free trial conversion rate

Free trial conversion rate = Free trial sign-ups / Total traffic x 100

Web traffic is a huge player in B2B KPIs, but there are so many sectors to monitor that we think it needs to be narrowed down a little.

The traffic that converts is what you want to pursue, and your ideal customer profile includes those who engage with your brand and its products—in other words, those who are hungry for what you’ve got.

Leads from web forms and gated content are good, but those who sign up for a free trial are on the hook and ready to bite. The more leads you can generate, the merrier.

5. Marketing qualified leads (MQLs)

Cost per MQL = Cost per lead (CPL) / Marketing spend for the total number of new leads

You don’t want to waste your sales team’s time, so handing them any old leads simply won’t do. As a marketer, you want to ensure that all your leads show healthy signs that they’re ready to buy. You may have engaged with them already, or they could fulfill all the essentials of your ICP. If they’ve signed up for your newsletter, downloaded gated content, or even better, taken out a free trial, they’re qualified as a lead.

Either way, you’re targeting them with good reason and with a predicted hopeful, happy outcome.

As far as KPIs go, low-quality leads affect all of your sales KPIs, and you don’t want that if you want to keep your job. So monitoring the cost of the qualified leads you hand over each month is essential.

Discover: The best types of content to generate leads

6. Free to paid conversion rate

Free to paid conversion rate = Upgraded from free to full package users / Total free sign-ups x 100

Moving traffic through your funnel and into your free trial is a great sign that you’ve got a very interested user and a well-qualified lead. Sadly, they don’t all convert, and if your conversion rate is low, it could indicate something wrong with your product.

If the number is acceptable or, hopefully, high, then your free-to-paid KPI shows you just how many sign-ups you need to generate to meet your necessary targets.

7. Churn rate

Churn rate = Customers lost during the period / Initial customer quantity at the beginning of the period x 100

Churn is the rate your customers jump ship. Ideally, once you’ve taken a new customer under your wing, you never want to let them go, but sadly, it will happen.

Depending on your operation, the churn rate is generally a monthly observation. However, you can set those KPIs quarterly, annually, or during any specific term where you make significant changes to your service, product, or brand.

Again, whenever you spot a rising or high churn rate, you need to know why. For example, could your product have a limited shelf life, or are your customers getting a better deal, product, or service elsewhere?

8. Retention rate

Retention rate = Subscription renewals / Subscribers at the beginning of the period x 100

The opposite of churn rate; retention (as you’d guess) is how well you retain subscribers. A high retention rate will bump up your customer lifetime value, lower your customer acquisition cost, and flip your churn rate on its head.

9. Customer product engagement rate

Not all organizations can track how much, how often, and how their subscribers use their product. That said, a savvy development team should already be triggering data collection from the key features of your product.

Tracking how users engage with your product shows how beneficial it is to their working day or week and how dependent they are on its usefulness. If you can track and understand where the highest level of value lies for specific user types, you’ve got some brand new insights to persuade similar customer profiles to convert.

Discover: Engagement optimization is where the gold is at

How to track the B2B marketing KPIs properly

With your new list of hottest SaaS marketing KPIs for 2022, you need to organize them into a structured format that’s easy to read, analyze and act upon. For that, you'll need a KPI tracking or marketing measurement tool.

The best tracking tools integrate your data streams from every platform. They automate and organize the results into charts, graphs, and reports, using AI to make the connections that reveal behavioral or action-based patterns you need to know about. So with every new revelation, you’re holding the secrets to plugging the holes in your operation and boosting future successes.

Discover: How to determine and measure inbound marketing KPIs

Final thoughts

Marketers must build their systems and strategies on data if they’re going to maximize conversions and profits. Your B2B marketing KPIs will help drive your figures in the right direction, dictating strengths and weaknesses in your product and your sales and marketing practices.

KPIs help paint a clear picture of what’s going on under the hood of your organization. They show how each of your marketing metrics can make the difference between a company that’s just getting by, to one that’s thriving with tremendous growth potential.

After all, if you don’t know where you’re failing, you don’t know what to fix.