People in the BtoB marketing department probably set numerous KPIs for each initiative and work on them. However, because BtoB marketing involves a mixture of various channels, it can be quite difficult to set KPIs that apply the numerical values set by the department to each individual initiative.
The marketing department builds a system for selling and works with various departments within the company to implement measures. However, unlike BtoC, final sales turkey b2b leads depend on the sales department, so it is difficult to see the actual contribution or effectiveness of each measure, which makes it even more difficult to set target figures.
When working, it is very important to be able to systematically position the organizational goals and your own work goals. In this article, we will explain the basics of KPI management for BtoB marketing departments.
The difference between KPIs and KGIs in marketing
KPI is an abbreviation for Key Performance Indicator, which literally means "key activity indicator." KGI is an abbreviation for Key Goal Indicator, which is equivalent to a goal or target.
Simply put, KPIs in marketing are indicators for reaching the "KGI = goal" in the shortest time possible. The purpose is to move in the right direction toward the goal by determining and measuring the degree of achievement at each intermediate point (each process).
In B2B, where the goal is big and many members are involved, each task is subdivided and assigned. Because the process is complicated, it is important to set KPIs for each process so that the people involved know what they need to achieve and by what point in time in order to reach the final goal.
KPIs by position
Within a company, KGI and KPI are set according to job title as shown in the diagram below. Generally, in a pyramidal organization, the subordinate's KGI becomes the superior's KPI, and the superior's KGI becomes the superior's KPI, and so on. (Note that while many companies in Japan and around the world have pyramidal organizations, the structure is much simpler in Holacracy organizations , which have recently become more common in the IT industry and elsewhere.)
The pyramid structure is a so-called vertical organization. Its advantage is that each member can focus on their own goals under instructions and limited discretion. On the other hand, it also has the disadvantage of being prone to short-sighted actions without considering the goals and direction of the entire company, and it is also an organizational form that is prone to sectionalism, which promotes local optimization.
Therefore, when marketing personnel work, it is advisable to at least keep in mind the "KGI of the entire organization = sales target" and the "KGI of the department's superior" and focus on achieving your own KPI. As a result, it should be easier to achieve the results that the company is looking for.
Many BtoB and SaaS companies struggle with how to set KGI and KPI. It is common for them to not have enough traffic to their website in the first place, or to use the number of inquiries as an indicator without generating any leads.
You should create realistic KGI and KPI definitions that are in line with your company's growth phase. It is also important to change the definitions of KPI and KGI once every six months or once a year.
KPIs for each initiative
Sales target structure
The KGI for the marketing department is generally the number of business opportunities created, the number of leads created, etc. In B2B, it is the sales department that directly increases sales, but in more advanced marketing departments, the KGI may be set as the sales revenue or profit generated by marketing activities.
The KGI for the marketing department of a SaaS company will vary depending on the organizational state and the stage of growth of the company itself, as mentioned above, such as Marketing Influenced MRR, number of MQLs created, number of leads created, etc. In any case, negotiate with the sales department and set it by working backwards from their KGI, sales.
For example, you can draw a KPI tree to calculate the number of business opportunities generated by the marketing department, and then work backwards from sales. The same goes for the KPIs for each measure. Then, when drawing the KPI tree, you can understand which measures you should focus on at the moment, taking into account the possibility of realizing them, and what you should do in the medium to long term.
