A growing business is proof that your practices are working. It keeps you healthy and competitive, encourages investors, and gives you time to identify problems and build solutions to create even more value and growth.
Yet it’s not always easy to tell how quickly your company is growing, or even why. How can you separate your company from the ebbs and flows of the market, customer demand, and the performance of your competitors to generate an accurate picture of your growth?
Welcome to the world of B2B growth metrics.
We’ve compiled this list of some of the most important B2B growth metrics you can track and ways to calculate them.
Measuring B2B Marketing Effectiveness
B2B success is not different from success at other companies. It requires growth, which means you’ll always be looking out for new customers who spend more than your old ones.
You’ll need to know how much it costs to acquire new prospects and how long it will take them to become buyers. You’ll also need to know whether it’s time to focus more on market share or if you can safely enjoy a wave of category growth.
The best way to measure growth is with some key metrics that we’ll recommend today. First, you should understand the importance of category growth and why it should affect the way you read your growth metrics.
Category Growth Metrics vs. B2B Growth Metrics
Category growth is the phenomenon of increasing demand in the category of products you sell. For example, a company that makes bowling balls might take a particular interest in increasing the popularity of the game of bowling to unlock new customers and new revenue streams.
This is in contrast to a company that only advertises to current bowlers and doesn’t try to convert new ones. The first company is engaging in category growth tactics, while the second isn’t.
Why Category Growth Matters
In general, pursuing a category growth strategy is a luxury. But knowing how to track category growth is fundamental.
If your company is growing quickly, but more slowly than others in your industry, you may have a problem competing with these companies when your market is mature (i.e., it stops growing so much).
Tracking your category growth can tell you whether you should be focusing on competition or growth.
5 Metrics to Track Category Growth
Here are five metrics to check on B2B growth vs. category growth.
1. Share of Voice
Share of voice is a very popular public relations metric. It essentially tracks how frequently your brand is mentioned in relation to other brands. If your share of voice is falling despite rising revenues, this may mean you’re experiencing a boom in category growth but falling behind in the competition.
2. Web Traffic vs. Competition
Another way to measure yourself against your competitors is to check on web traffic. How often are customers finding and choosing your content over others? Branded web searches is a similar metric that can be used to find the same information.
3. Backlinks
Backlinks are other websites linking to yours. A high number of backlinks can indicate domain authority and mean that your brand is outperforming others when it comes to brand awareness and reputation.
4. Social Media Followers and Engagement vs. Competition
Once again, if you’re experiencing lots of growth in this area, it’s important to see how well your competitors are faring. The speed of your growth vs. theirs is ultimately what will matter most.
5. Category Sales and Revenue
The most direct way to track category growth is by combining the sales and revenue of all companies in your sector. How quickly is your revenue growing in comparison? This insight can be a valuable indicator of how your company is performing relative to competition.
5 Best Forward-Looking Sales Metrics
These five sales growth metrics are the best way to measure the performance of your sales team, which should directly correlate to your growth.
6. Close Rate
The close rate is the percentage of leads converted into sales. It can be contentious because salesmen will naturally believe that if they didn’t close a sale, it wasn’t closeable. Often, they are right! This means that the close rate is not just a measure of sales performance but marketing as well.
7. Total Sales
You won’t find a KPI that more straightforwardly represents sales performance on a year-to-year or month-to-month basis than a B2B sales report.
8. Pipeline Velocity
How quickly are customers being pulled through the B2B marketing funnel? The more efficient the process of contacting, engaging, and converting customers is, the easier it will be for your company to scale.
9. Customer Acquisition Cost (CAC)
CAC is a measure of how much money was spent turning a prospect into a customer. This is the best metric for determining the ROI of your sales team. It may also be an indirect reflection of lead quality.
10. Sales by Product, Region, or Category
It’s important to parse data to make it more useful. Knowing that your total sales are growing is useful, but what if that growth is mainly driven by a rise in demand in a particular region or for a particular product? Knowing sales by product, region, or category allows you to leverage it to drive growth even further.
5 Best B2B Growth Metrics
These are the metrics we recommend checking to see how your company is growing.
11. Annual Recurring Revenue (ARR)
Recurring revenue is a prediction based on how much subscription-based revenue you expect to earn. You generally calculate ARR by first finding your monthly recurring revenue (MRR) and multiplying it by 12. Your churn rate will affect your ARR and MRR.
12. Churn Rate
Churn is the loss of customers due to failure to renew subscriptions. It’s a direct measure of how useful customers determine your product to be once they’ve used it.
A high churn rate could be cause for concern. You won’t get 2nd chances with most customers, so it’s important to keep churn manageable.
13. Net Promoter Score (NPS)
You measure net promoter score by simply asking customers to rank their likelihood of recommending your product on a scale of 1 to 10.
NPS is simple yet highly valuable. It directly predicts growth, since those who answer with high scores are very likely to recommend you to others. A high NPS score essentially correlates to how much of this free advertising you’re getting.
14. Average Deal Size
This can be measured by individual deals or by specifying a period of time. In the latter case, it’s akin to MRR/ARR. This is a great metric to track when going to market.
15. Average Sales Cycle
You want to know how long it takes to engage with prospects, turn them into buyers, and do it all over again. A long sales cycle is not necessarily a problem as long as it works for your industry. It may also ebb and flow during certain times of the year. You’ll need to pay close attention to this metric over a long period of time.
Product Analytics for B2B Growth is Easy with Hushly
Hushly’s automated customer experience platform collects data from every phase of the customer journey. We use this data to generate important insights that you can use to contribute to the growth of your business.
If you’re interested in a marketing partner ready and able to scale alongside you, contact our team and request a Hushly demo today.
