As a business owner, you’re likely focused on ROI (return on investment) when discussing marketing performance, and rightly so. But are you measuring the metrics needed to demonstrate ROI effectively, especially if your sales process involves multiple touchpoints and offline conversions?
Outsourcing digital marketing is often the best way to ensure expertise and efficiency for businesses offering high-value products or services. Yet, to make that partnership truly effective, you must know your sales KPIs (key performance indicators) and share them with your marketing partner.
Why? These metrics are the foundation for proving ROI and refining marketing strategies.
Unfortunately, in my seven-plus years of consulting for small and medium-sized businesses, I’ve worked with only a handful of clients successfully tracking the sales KPIs that matter.
Of course, ecommerce and digital businesses can track sales much more easily, but for offline service providers with more complex sales cycles, reviewing metrics beyond net new customers and revenue becomes an afterthought because there are so many other pressing priorities to attend to.
In this article, we’ll explore why sales KPIs are essential, which ones matter most, and how to track and share them effectively with your external marketing team, whether it’s an agency or a freelancer. By the end, you’ll clearly understand how to maximise your marketing investment and achieve meaningful growth.
Why ROI metrics are essential in marketing
When you outsource marketing, you’re not just paying for campaigns or content; you’re investing in results. ROI is the metric that ties your marketing efforts directly to revenue. In simple terms, you calculate ROI with:
(Revenue Gained – Cost of Investment) ÷ Cost of Investment
This formula is only as reliable as the data that feeds into it. While your marketing partner can provide insights into campaign performance, such as ad impressions, clicks, or website traffic, they rely on your sales data to calculate revenue gained. Without accurate sales metrics, the ROI equation falls apart.
Imagine spending thousands on an ad campaign that generates 100 website enquiries. If you don’t know how many of those enquiries convert into paying customers or the average revenue per sale, you’re left guessing whether the campaign was successful.
Marketing is not about vanity metrics like likes or impressions; it’s about outcomes. ROI is the ultimate measure of success because it’s the only metric that directly impacts your bottom line.
The sales KPIs your marketing partner needs
To calculate ROI and optimise campaigns effectively, your marketing partner needs specific sales KPIs. These metrics provide the clarity needed to understand what’s working, what isn’t, and where to focus efforts. Let’s break down the most critical ones:
1. Website enquiry to customer conversion rate
This KPI tracks the percentage of website enquiries that turn into paying customers. It’s particularly important for service-based businesses, where most leads come through the website.
Why it matters:
Knowing your conversion rate allows your marketing partner to:
- Forecast how an increase in website traffic and enquiries will increase customers
- Evaluate lead quality and refine strategies to attract more qualified prospects. For example, if sales conversion rates are low, it opens up conversations about why that might be. Is there a problem with the landing page content that’s resulting in less qualified enquiries? Or is there an issue with internal lead management, such as too long of a delay in replying to hot leads?
How to calculate it:
(Number of customers ÷ number of enquiries) × 100
Example:
If you receive 50 website enquiries per month and convert 10 into customers, your conversion rate is 20%.
2. Average sales value (ASV)
Your ASV represents the typical revenue generated from a single sale. For businesses selling premium products or services, this metric is crucial for forecasting revenue potential.
Why it matters:
Knowing your ASV helps your marketing partner predict how much revenue their campaigns can generate. It also informs ad spend recommendations, ensuring you’re not overspending to acquire customers.
How to calculate it:
Total revenue ÷ number of sales
Example:
If your total revenue for the month is £50,000 from 25 sales, your ASV is £2,000.
3. Customer lifetime value (CLV)
CLV measures the total revenue a customer brings to your business over their entire relationship with you. It’s particularly relevant for businesses with repeat customers or long-term contracts.
Why it matters:
CLV allows your marketing partner to take a long-term view of ROI. For example, if it costs £500 to acquire a customer with a lifetime value of £10,000, the ROI is clearly worth the investment.
How to calculate it:
Average sales value × average purchase frequency × average customer lifespan
Example:
If your ASV is £2,000, customers purchase twice a year, and the average customer stays with your business for five years, your CLV is £20,000.
The risks of guessing your sales metrics
You’d be surprised how often business owners approach marketing partners without knowing their own sales KPIs.
For instance, I once worked with a client who wanted an SEO strategy to generate more leads via their website. When I asked about their lead-to-customer conversion rate, they guessed “around 20%.” When I asked for their average sales value, they estimated “about £1,500.” These numbers turned out to be inaccurate, leading to incorrect ROI forecasts based on guesswork rather than facts.
This lack of clarity not only made it harder to calculate ROI but also limited their ability to plan for growth. If you don’t know your conversion rate or average sales value, how can you confidently decide where to invest or scale?
How to track and share sales KPIs
Tracking sales KPIs doesn’t need to be complicated or time-consuming. With the right tools and processes, you can gather accurate data and keep your marketing partner informed.
1. Use reliable tools
Invest in marketing tools that streamline data collection and analysis:
- CRM systems (e.g., Salesforce, HubSpot): Automate lead tracking and provide insights into customer behaviour.
- Google Analytics: Monitor website performance and track where leads come from.
- Manual spreadsheets: For smaller businesses, a simple spreadsheet can work to start tracking key metrics.
2. Set up a regular reporting rhythm
Schedule monthly or quarterly check-ins to review sales metrics and share these with your marketing partner. These check-ins should focus on identifying trends and opportunities for optimisation.
3. Collaborate with your marketing partner
Your marketing partner can help you set up tracking systems and interpret data, but the responsibility for accurate sales metrics ultimately rests with you. Be transparent about your numbers and open to their recommendations.
What to look for in a marketing partner
A trustworthy marketing partner will actively seek out your sales metrics because they know how critical they are for success. Here’s what to expect:
- Data-driven strategies: They use your KPIs to inform campaign strategies and budget allocation.
- Regular reporting: They provide clear, detailed reports showing how their efforts impact your bottom line.
- Proactive communication: They don’t just wait for you to share metrics, they ask for them and help you understand their importance.
If a marketing partner doesn’t emphasise the need for sales KPIs, it’s worth questioning their approach. Good marketers know that performance data drives results.
Take control of your sales metrics today
To maximise the ROI of your marketing investment, you need to take ownership of your sales KPIs.
Here’s a simple action plan to get started:
1. Audit your metrics
Review your current tracking processes. Are you capturing data on conversion rates, ASV, and CLV? If not, identify the gaps.
2. Implement tracking tools
Choose tools that suit your business size and complexity. CRMs and Google Analytics are great starting points.
3. Share metrics with your marketing partner
Make KPI sharing a regular part of your collaboration. The more informed your partner is, the better results they can deliver.
4. Review and refine
Regularly revisit your metrics to ensure accuracy and uncover new growth opportunities.
ROI metrics are the cornerstone of successful marketing. By knowing and sharing your sales KPIs, you empower both yourself and your marketing partner to make data-driven decisions that drive real results. Believe me when I say, your marketing partner wants them!
Don’t let guesswork hold back your growth. Start tracking your sales metrics today, and watch how it transforms your marketing investment into measurable, meaningful outcomes.
Need a partner to drive your search marketing and deliver ROI? Send me a message to see whether we’re a good fit to work together.
