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Are you monitoring the right “Smarketing” metrics to unlock opportunities for growth in your business? Before you wonder, we haven’t just misspelled “marketing”. “Smarketing” metrics are key data points that offer insights into how well your sales and marketing teams are collaborating.
In the past, sales and marketing teams often had a somewhat strained relationship in the business world. However, lately, companies have begun to discover that uniting these two customer-focused teams can lead to incredible results.
87% of sales and marketing leaders agree that collaboration between these two teams enables critical business growth, and 90% of professionals feel that when sales and marketing initiatives are aligned, they can deliver better customer experiences.
However, to ensure you’re getting the most value out of the strategic alignment of sales and marketing, you need to know which metrics to monitor.
Coined in the early 2000s, the term “smarketing” was used to refer to the connection between sales and marketing teams in a company’s go-to-market strategy. Ultimately, sales and marketing professionals aren’t as disconnected as they might appear.
They’re both responsible for connecting with customers and cultivating the relationships that help your business to grow. Sales teams are responsible for qualifying, nurturing, and engaging prospects, while marketing teams drive qualified leads towards sales teams.
Aligning sales and marketing helps companies to keep everyone on the same page in the GTM strategy. It ensures all of your employees are working together to not only capture and convert the right leads, but also enhance customer experiences, and drive long-term brand loyalty.
Ultimately, effective “smarketing” metrics are any data points that can help you to define how well your sales and marketing teams are working together. Here are 7 of the top metrics we think can help to unify, empower, and optimise teams.
Formula: CPL = Money spent on campaign / Number of leads generated.
CPL, or Cost Per Lead is a metric that calculates the average amount of money you spend on generating new sales leads. It’s one of the best tools you can use to determine how successful your marketing and sales campaigns are at capturing customer attention.
The lower your CPL is, the better your campaign is performing. As economic uncertainties continue to plague businesses, and marketing budgets drop, everyone wants to accomplish more with less.
Compared to other ROI-focused metrics, CPL can be more valuable, as it tells you whether your campaign was profitable, regardless of how many conversions it generated.
In general, aligned marketing and sales teams achieve a lower CPL, because they work together to evaluate the potential of each campaign, set collaborative goals, and adjust advertising budgets based on genuine customer insights.
Leads come in many different forms. One of the most valuable is the MQL, or Marketing Qualified Lead. These are prospective customers who have already interacted with your marketing materials, do their research and are ready to be passed onto your sales team.
Generally, you can identify MQLs as leads that have completed actions that show an intent to purchase, such as filling out your contact form, attending a webinar, downloading a lead magnet, or accessing a product demo.
A low number of MQLs tells you a few things about your team’s alignment. If you don’t have many MQLs, this could mean that your sales and marketing teams aren’t communicating enough. Sales teams could be wasting time on low-potential leads, while marketing teams don’t have a clear idea of what sales professionals are looking for.
Boosting the collaboration between your teams, refining sales, and lead qualification criteria, and streamlining the “handoff” experience can help you boost the quality and quantity of your leads. Make sure both teams know how to identify a “high-quality” lead, and how to nurture them.
Formula: Number of SQLs/ Number of SQLs x 100
SQLs, or Sales Qualified Leads are the next step from MQLs. These are the people who have demonstrated genuine and clear buying intent. They’re ready to close a deal with a salesperson and have all the information they need to make a purchase.
Monitoring how many of your MQLs convert into SQLs can offer insight into how effectively your sales teams are nurturing the leads your marketing team generates. A low conversion rate could indicate that sales professionals don’t have the right resources to educate, inform, and guide customers, or that your marketing team isn’t sending the right MQLs to your sales staff.
To boost your MQL to SQL conversion rate, make sure your sales and marketing teams are working together to ensure every step of the customer journey is carefully planned and aligned. Use data from previous successful conversions to determine how to convert your leads.
Formula: CAC: Cost of sales/marketing activities / new customers acquired
CAC is a metric a little like “cost per lead”. However, instead of looking at the price it costs to generate a lead, it looks at how much you spend to officially convert each customer. Customer Acquisition Cost is a critical B2B sales metric because it determines exactly how much you’re spending to acquire a new buyer.
If your CAC is high, this could be a side-effect of the current economy. CAC costs are on the rise, with some studies indicating they’ve increased by 222% in the last ten years.
However, a high CAC could also indicate that your sales and marketing teams aren’t working collaboratively to generate new customers. To reduce the number, encourage your teams to work together to identify customer touchpoints that can be optimised and enhanced.
Revenue is one of the most important Key Performance Indicators any business will monitor. It shows you, broadly, how successful your business is. However, some companies make the mistake of thinking revenue is a direct result of their sales team.
Looking at how your marketing efforts have helped to generate revenue; can help you enhance your go-to-market strategy. Using attribution methods, you can track which campaigns, channels, and activities are driving the most conversions for your business.
If the ROI for your marketing activities seems low, this doesn’t always mean that your sales and marketing teams aren’t aligned. However, many sales professionals agree that strategic alignment does help to boost revenue results.
Formula: Opportunity win rate = closed/won opportunities / all closed opportunities
Another major metric for tracking business success is your opportunity-to-win rate or ratio shows you how many qualified leads your sales teams successfully convert into closed deals. This KPI can help you identify which of your sales reps are excellent at initiating opportunities, but not necessarily closing deals, and vice versa.
You can also gain insights into how win rates differ across different products, regions, segments, and marketing channels. Analysing this metric carefully can show you which market opportunities are available, and which bottlenecks need to be fixed.
Often, a high level of sales and marketing alignment should help to boost the opportunity-to-win ratio, by ensuring marketing teams are sending the right leads to the right sales experts.
Formula: Customer retention rate: number of customers at the end of a period – number of customers acquired during a period / the number of customers at the start of a period x 100.
Converting customers isn’t the only thing you should be focusing on in today’s world. You also need to ensure you’re retaining those customers, and maximising their lifetime value. That’s where customer retention rates come in.
They show you how many customers are sticking with your brand for a pre-defined period. If your retention rates are low, this could be a sign that you’re not attracting the right leads (the people who can benefit most from your solution), or delivering the best features to customers.
It could also be a sign that your customer success teams aren’t working in alignment with your sales and marketing staff, leading to a disconnected customer experience. Improving the alignment between your teams, and ensuring everyone has access to the right data can boost your retention rates and your overall profitability.
Smarketing metrics can offer valuable insight into just how well-aligned your sales and marketing teams are. Some can even give you an insight into the strategic alignment of every group in your GTM strategy. The more connected your teams are, the more likely it is that you’ll collect the right leads, increase conversions, and retain more customers.
Use the metrics above to illuminate the gaps in your team’s alignment, and discover new opportunities for growth.
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