Key Performance Indicators (KPIs) measure performance. Understanding and effectively using lead generation KPIs and metrics is essential for any sales and marketing team to optimize their strategies and achieve business growth.
Now, you may be wondering: What is lead generation KPI, and what are the best KPIs for lead generation? Well, keep reading!
Lead generation KPIs and metrics used to measure sales funnel performance vary widely, the most important of which include conversion rate, customer lifetime value, cost per lead, lead value and quality, engagement rate, bounce rate, website traffic, and more.
In this guide, we’ll cover 16 of the best lead generation KPIs and metrics that you need to monitor to optimize your sales funnel.
Getting Started with Lead Generation KPIs and Metrics
Today, B2B marketing and sales have become more widespread and competitive than ever before. According to a report by Ruler Analytics, more than 91% of marketers and sales teams say that lead generation is their most important business goal and their biggest priority.
And no wonder!
Of course, the question arises: “How can we beat our competitors in the growing world of B2B marketing?“
The answer is simple: “We can stay ahead of the competition by monitoring our lead generation KPIs and metrics.“
It’s so easy, right? But you’re unsure how and where to start identifying and measuring your metrics and KPIs for lead generation.
First, it’s important to understand the concept of KPIs in lead generation before addressing how to choose specific KPIs and metrics.
What Is a Lead Generation KPI?
As we said in the introduction, KPIs are measurement criteria. Lead generation KPIs refer to key indicators for measuring the performance of your lead generation progress.
By identifying KPIs and metrics for lead generation, you can better assess the effectiveness of your strategies in attracting and converting targeted leads.
How to Identify the Right Lead Generation KPIs?
A single rule cannot be applied to all KPIs, as each business has its own set of goals, target audiences, marketing budget, and defined marketing strategies. Every business’s approach to lead generation and customer acquisition can be different.
Hence, defining your business goals to find the right metrics and KPIs would be best.
Key aspects to identify the right lead generation KPIs and metrics are as follows:
1. Target Audience
The target audience determines whether you sell your products or services to a small business, a large corporation, or individuals. You must answer three main questions to choose metrics and KPIs for lead generation. They include:
- What are your ideal customer profiles (ICPs)?
- What is the industry of your target audience?
- What are the right strategies for engaging with your potential customers?
2. B2B or B2C Business
Lead generation strategy is primarily based on whether you are a B2B or B2C business. The KPIs that are important to B2B lead generation are different from B2C.
Additionally, your lead generation channels will also be very different depending on your business type. Based on this, you can set metrics and KPIs that will help you grow your customer base.
3. Pricing Model
Pricing your products and services will help you understand how much you need to get new leads.
In addition, pricing plans play an important role in choosing the right lead generation strategies, which will help you identify your business KPIs and metrics.
It should be noted that after choosing your lead generation KPIs, you can start measuring them by investing in the right analytics tools that perform well, like Google Analytics.
The Best Lead Generation KPIs and Metrics that’ll Boost Your Sales Pipeline
To boost your sales pipeline and succeed in your lead generation efforts and marketing campaigns, here are the 16 top B2B lead generation KPIs and metrics that should be at your list.
1. Bounce Rate
Bounce rate is a core lead generation KPI for online businesses and websites.
Your website’s bounce rate demonstrates whether your website content can keep your website visitors engaged or not.
A high bounce rate indicates that the content of your website is not engaging enough for visitors and that they haven’t found what they’re looking for on your website. Overall, a high bounce rate harms businesses by negatively affecting conversion rates.
On the other hand, a low bounce rate is a good sign in lead generation. It means the right buyers visit your website, find it easy to use, and enjoy the content.
2. Cost of Customer Acquisition (CAC)
CAC, or Cost Per Acquisition (CPA), is a key financial metric for determining revenue generation efforts and return on investment (ROI). Customer acquisition KPI is important for the following reasons:
- Determining which channels to invest more money in
- Making decisions on the effectiveness of marketing budgets over time
For example, if you sell to a B2B company, the CAC/CPA will be high; if you sell to a B2C business, the CAC/CPA will be lower.
The CAC/CPA can be calculated by dividing the total costs (cost of sales and marketing) spent on acquiring more customers by the total number of customers acquired over a given time.
3. Website Traffic
Website traffic is another practical lead generation and conversion KPI for measuring the performance of your sales and marketing efforts.
Using an appropriate analytics tool, such as Google Analytics or Ahrefs, you can track & monitor the total amount of traffic your website or a specific page receives over time.
By monitoring this lead generation KPI, you can discover your ICP’s needs and preferences, as well as deliver them as they progress through the sales funnel.
4. Email Marketing Performance
Measuring your email lead generation performance, such as email open rates or Click-Through Rates (CTRs), is a great and proven way to monitor lead generation. It shows the success of your email campaigns and cold emails.
For example, you can measure
- The number of times a recipient opens your email (open rate).
- The total number of leads clicked on the links (CTR).
- The total number of times your emails have been forwarded.
All these examples of KPIs for generating leads can be measured using email marketing automation tools like Mailchimp to evaluate B2B email campaigns.
5. Conversion Rate (CR)
CR is a key metric in sales and digital marketing KPIs that tells you how many of your qualified B2B leads have converted to paying customers.
The higher the CR, the better your sales funnel output (more sales).
6. Monthly Recurring Revenue (MRR) and Return On Investment (ROI)
ROI and MRR are basic and key metrics for B2B lead generation, used to measure any business’s marketing and sales activities.
These two criteria determine the success of business campaigns. The higher your MRR and ROI, the more successful your marketing campaigns will be.
7. Cost Per Lead (CPL)
Your CPL is a key KPI for lead generation, especially used in paid advertising campaigns.
This metric focuses on cost-effective lead generation and can tell you what your best lead source is and what budget you can generate more leads on.
8. Return On Ad Spend (ROAS)
ROAS is a fundamental B2B marketing metric that is essential to inform companies and their sales teams about the performance and quality of their campaigns.
This metric can evaluate the performance and financial return of your advertising strategy. In other words, it measures the total revenue earned per dollar spent on advertising campaigns.
9. Lead Engagement Rate
Lead engagement is a lead generation KPI that includes all of your prospects’ reactions to your social media posts or blog posts, including likes, comments, reshares or reposts, and more.
This metric is related to bounce rate and website traffic and tells you how engaging your content is for your audience.
Good social media engagement shows that your campaign has attracted a large audience on its main lead gen sources, such as LinkedIn or Instagram. Its CTR has also increased, and its bounce rate has decreased.
10. Booked and Attended Meetings
This is a great B2B lead generation KPI that measures the total number of meetings booked and attended by prospects that your sales and marketing team conducts within a campaign.
By measuring your booked sessions, you can predict the number of Sales Qualified Opportunities (SQOs) and quality leads you will receive.
According to Whatagraph, If your meeting booking and attending rates are high in a campaign, it indicates that your prospect list, email template, and Call To Action (CTR) are aligned.
11. Lead Value and Quality
A critical lead generation KPI demonstrates the total value and quality of your leads in your campaign and is used to bring confidence to your B2B lead generation strategy.
This KPI will help you predict the revenue you will earn from incoming sales and allow you to make more informed and productive decisions about your lead generation strategy.
12. Customer Lifetime Value (CLV or CLTV)
CLV or CLTV is one of the most essential B2B lead generation metrics for determining your company’s income in a certain period.
In other words, it estimates the total amount of revenue a customer has generated over the entire length of their business relationship with your business.
This will help you know how much of your marketing budget to spend on specific marketing channels and your products or services as well.
It’s worthwhile to mention that higher CLV or CLTV suggests more profitable long-term clients.
13. Average Deal Size (ADS)
ADS is a key lead generation KPI that exhibits the average amount your customers spend per deal or transaction over a set time.
By measuring this key metric, you can predict future sales for your business and, as a result, improve the performance of your campaigns by setting budgets.
14. Sales Qualified Opportunities (SQOs)
SQO is the most significant lead gen metric that indicates a higher level of engagement and interest. Also, it’s strongly indicative of incoming revenue.
Additionally, measuring this lead gen KPI can help you generate more consistent, higher-quality leads. This results in higher CRs, reduced sales cycles, and better win rates.
15. Marketing Qualified Leads (MQLs)
MQLs are a vital demand generation metric that measures and tracks the amount of interest your brand has produced based on your marketing campaigns.
Meanwhile, it can help your sales and marketing team make a decision on how many qualified leads they need to generate monthly, quarterly, and yearly.
16. Average Revenue Per Customer (ARPC)
ARPC is a key performance indicator for lead generation that is also called Average Revenue per User (ARPU), especially in the SaaS world.
This KPI shows the average revenue generated from each of your customers monthly or annually and determines their profitability in a given period of time.
How to Measure the Lead Generation KPIs?
Understanding lead generation KPIs can help you generate more qualified leads, improve CTRs and CRs, increase CLV/CLTV, drive monthly revenue, and more.
Here are the formulas to work out the lead generation KPIs and metrics:
1. Measuring Bounce Rate
To calculate your email bounce rate, use this formula:
Bounce rate = Total number of bounced emails divided by the total number of emails sent and multiplied by 100
2. Measuring CAC
A formula to measure your CAC is:
Cost of Customer Acquisition (CAC) = The Total Marketing Campaign Costs (MCC) for a set period divided by the Total Customers Acquired (CA) over the same time
3. Measuring Website Traffic Growth
You can work out your website traffic growth by this formula:
Website traffic growth = Subtract the number of sessions (previous month or year) from the number of sessions (this month or year) divided by the results by the number of sessions (previous month or year) and multiply by 100
4. Measuring Email Marketing Performance
You need to focus on your CTR and open rates to calculate your email marketing performance.
The formula to calculate the CTR rate is:
CTR rate = The total clicks divided by the total impressions, multiplied by 100
The formula to calculate your email open rate is:
Open rate = The count of recipients who opened the email divided by the total number of successfully delivered emails multiplied by 100
5. Measuring CR
A formula to measure number of conversions is:
Conversion rate (CR) = the total number of sales in a given period divided by the total number of leads generated during that time.
6. Measuring MRR and ROI
To calculate your MRR, you can use this formula:
MRR = the total monthly recurring revenue generated divided by that month’s clients
Measure your ROI with this formula:
ROI = Subtract the revenue generated from the total marketing cost, divide it by your total marketing cost, and multiply by 100
7. Measuring CPL
Here’s a quick formula to calculate your CPL:
CPL = The total marketing cost divided by the total number of new leads you’ve acquired
8. Measuring ROAS
You can calculate your ROAS with the help of the following formula:
ROAS= your ad strategy’s total revenue divided by the total advertising costs
9. Measuring Lead Engagement Rate
To calculate your lead engagement rate, employ this formula:
Engagement Rate = The total engagement (shares, comments, reactions, etc.) divided by the total followers and multiplied by 100%
10. Measuring Booked & Attended Meetings Rate
Here’s the simple formula to calculate your meetings booked & attended rate:
Meetings booked & attended rate = The number of meetings booked and attended divided by the total number of outreach messages sent, multiplied by 100%
11. Measuring Lead Value and Quality
To work out your lead value and quality, take a look at this easy formula:
Lead value = Your total sales value divided by your total leads
12. Measuring CLV or CLTV
You need to know two things to measure CLV/CLTV:
Average customer value (ACV) = Average order size multiplied by the average order frequency within the period
Average customer lifespan (ACL) = Add all your customer lifespans and divide them by the total number of customers
To calculate your CLV or CLTV, use this formula:
CLV = the ACV multiplied by the ACL
13. Measuring ADS
Here’s a formula to calculate your ADS:
ADS = Total revenue achieved in a certain period divided by closed-won opportunities, such as deals or transactions for that same period
14. Measuring SQOs
Use this formula to work out your cost per SQOs:
SQO = CPL divided by marketing spend for the total number of new leads
15. Measuring MQL Rate
Your MQL rate is calculated in this way, as follows:
MQL rate = The number of leads that were converted into marketing qualified leads divided by the total number of new leads generated during the specified time period
16. Measuring ARPC
To calculate your ARPC, follow this simple formula:
ARPC = Your total revenue divided by the number of customers over a specific period of time
Lead Generation Sales KPIs Template
If you can’t remember all 16 lead generation KPIs & metrics, as well as the formula we’ve listed above, don’t worry. We’ve got your back!
Here’s a simple lead generation sales KPIs template in this table that you can save for quick reference.
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Final Thoughts
Your lead generation KPIs and metrics are key to understanding if your sales and marketing efforts are paying off and achieving results.
In this article, we reviewed 16 of the best lead generation KPIs in the sales and marketing team dashboard and explained how to calculate them with simple formulas. Now, you can easily use these lead generation metrics to achieve your business goals.
FAQs
1. What Is the KPI for Lead Generation?
A key performance indicator (KPI) for lead generation is a critical metric for monitoring and tracking the performance of your sales and marketing efforts.
2. How Do You Measure Lead Generation?
To measure lead generation, you must use the lead gen KPIs and metrics, such as ROI, CR, CLTV, lead value and quality, etc.
3. What Is an Example of a Leading KPI?
Customer lifetime value is an example of a leading KPI for lead generation that helps marketers determine how much of their marketing budget they must allocate to specific marketing strategies.
4. Why Do You Need to Measure Lead Generation KPIs?
Measuring lead generation KPIs is an important step for any sales and marketing team. It boosts the team’s morale, affects the sales goals, and helps the sales team determine the right and successful marketing strategy. It’s also very effective when compared with competitors.
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