The B2B industry has also realized the potential of the eCommerce industry, and thus it is utilizing the power of digital commerce for a successful business. Taking a B2B business online from the traditional physical store’s approach requires time, money, and resources. Thus, it becomes imperative for business owners to get maximum returns for their investments and efforts. Hence, it is critical to measure the success of your B2B store.
In the B2B e-commerce industry, there are several key performance indicators or metrics that you must measure, analyze, and compare. It is not like drowning in a pool of graphs and numbers, but there are some conventional metrics that you can check. Checking these few metrics can help you derive quantifiable insights on campaign performance. Understanding which metrics are essential for you can refine your approach and increase the chances of driving growth.
In this article, we will go through the critical metrics that you must take care of:
B2B eCommerce Metrics That You Should Focus Upon
Lead-To-Close Conversion Rate (CVR)
Conversion rate optimization (CRO) focuses on improving customers’ buying experience to increase your ecommerce store sales. This metric is critical as it can determine how successful your marketing tactics are as it measures the percentage of visitors converting into customers.
A high conversion rate signifies you have an engaging customer base, and it can double your conversion rate & will drive growth. But if it is low, then either you are targeting the wrong audience, or the customer engagement on your site is poor by which you do not convert them.
Since, B2B purchasing cycle is longer vis a vis B2C cycle, conversion rate calculation and assessing the marketing campaigns performance is also crucial. Thus, you must keep an eye on these numbers regularly instead of every month.
Customer Acquisition Cost (CAC)
Acquisition metrics determine the effectiveness of your site and other marketing efforts for driving people to visit your site. Its focus is not on telling the traffic volume but will also let you know who’s calling and where they came from to contextualize traffic numbers better.
By the customer acquisition cost, you will know how much money your company is spending to acquire a customer by totaling your marketing expenditure and dividing it by the number of customers. You will also come to know the brand’s total ROI for marketing and advertising. An active awareness of the company CAC lets you prioritize campaigns within your budget.
Many B2B businesses say that CAC is the only metric to know how good or bad their efficiency is. For other B2B businesses, it is a clear indicator something is not done right. Using the CAC numbers, you can identify where you should make some changes (program, campaign, initiative, channel, approach), and you can realize the negative or positive effect of those changes.
Marketing Percentage Of Customer Acquisition Cost
This metric is quite technical, but it is a useful metric as it tells you about the performance and spending of your marketing team. You will come to know the marketing percentage of your CAC, how much money it has spent, and how many new customers were acquired. You will get better insights into your marketing program, do not convert, and you can make better sales and marketing decisions.
1. Marketing Originated Customers
This metric will give you a clear insight into how much your customer percentage has been gained through marketing. You may have invested in tools and techniques, and thus you will want to grow your audience.
This metric understanding helps you identify how many individuals found out about your business and what you should do further for a better experience.
2. Churn Rate
This metric doesn’t make everyone happy and is an objective metric that determines the viability of your business. This B2B business metric calculates the number of customers who leave a product after a defined period, divided by the remaining customers.
By this metric, you can identify the instant from where you are losing your customers, and from there, you can develop a strategy to improve product interaction. The churn rate is essential as it requires fewer efforts to retain the existing customers than acquiring new customers.
3. Customer Lifetime Value (CLV)
This metric tells you that how much a customer has spent on your in their lifetime. A higher number is always good. Understanding this metric can determine how much money you should invest in acquiring new customers or retaining existing ones.
It focuses on the value exchange between your company & customer at a time they are with you. To get a high CLV, the acquisition cost should be low and retain & grow your customers.
4. Marketing Qualified Leads
These leads are those prospects who have shown the intention of buying products from your store to the sales team. However, MQLs require proper exposure to relevant promotional content for conversion. MQLs tracking lets your sales & marketing teams work in tandem as the marketing team is responsible for finding leads and the sales responsibility is to convert them.
This metric is different from qualified sales leads as it is more likely to convert to the other leads. On the other hand, Sales qualified leads are qualified as potential customers by the sales team. Both the marketing qualified leads, and sales qualified leads are crucial as they reveal the quality of the inbound inquiries and the efficiency of your lead qualification process.
5. Monthly Recurring Revenue
Growth in the number of leads is a good prospect for your business. But if these leads are not making purchases from your B2B store or not contributing to the revenue, then these metrics are in vain. After a point in time, you have to assess the ROI of your marketing efforts.
B2B firms driving recurring revenue should also track the monthly recurring revenue (MRR) and the annual recurring revenue.
There Are Many Benefits Of Measuring The MRR For A Company
1. Improvement In Performance
By MRR, the sales team can determine the account size they pursue. Therefore, if a sales representative closes a deal based on high or low MRR, the salary will be impacted. It will motivate the sales team to close high-value MRR deals.
2. Sales Forecasting
MRR metric helps the managers or business leaders to make more accurate sales forecasts and targets for the firm.
The revenue of the company decides future decisions. MRR tells the managers how much income they are generating in business each month. This helps them plan their investments and business development strategies.
In this article, we have gone through the essential B2B e-commerce metrics that you should focus on. At Emizentech, the best B2B ecommerce development company, we have expertise in building ecommerce stores from scratch. We have exceptional project managers and developers with experience and sound knowledge of B2B stores. B2B stores are different from B2C stores, and we understand this. Our developers will implement any of the customs to build your ecommerce store as per your requirements.