7 Essential Marketing KPIs for Successful Smarketing in 2024

The worlds of marketing and sales are continuing to converge. Smarketing—the alignment of sales and marketing teams around shared goals—is becoming a necessity for driving business growth. But to make smarketing work, you need to be tracking the right metrics.

Key Performance Indicators, or KPIs, enable you to quantify progress, spot issues, and prove the impact of your smarketing efforts. However, with so many potential KPIs to track, it can be difficult to know where to focus.

To help you zero in on the metrics that matter most, we‘ve compiled this list of the seven essential marketing KPIs for smarketing success. For each one, we‘ll explain what it measures, why it‘s important, how to calculate it, and what benchmarks to aim for. Plus, we‘ll share some additional KPIs that can provide valuable insights.

By the end of this post, you‘ll have a solid grasp of the KPIs you need to be tracking—and how to leverage that data to supercharge your smarketing results. Let‘s dive in.

1. Number of Sales Qualified Leads (SQLs)

The first critical KPI is the number of Sales Qualified Leads (SQLs) being generated. An SQL is a lead that has been vetted by the marketing team and deemed ready for follow up from a salesperson. Typically, this means the lead has shown strong interest and engagement—perhaps by requesting a demo or signing up for a free trial.

Why It Matters: The number of SQLs provides a high-level view of the quantity of high-quality leads being produced by marketing efforts and passed along to sales. Measuring this KPI over time allows you to track the impact of initiatives like new marketing campaigns, shifting targeting criteria, or improved lead scoring models. Generally, an increasing number of SQLs indicates that smarketing efforts are headed in the right direction.

How to Calculate It: This is a simple quantitative measure—a straightforward count of the number of leads that meet your defined criteria for an SQL in a given time period (typically a month or quarter). Your marketing automation and CRM systems should be able to track this number automatically based on your SQL definition.

Benchmark: There are no universal benchmarks for SQL volume since it varies widely depending on company size, industry, business model, and other factors. The best approach is to benchmark against your own past performance and set realistic goals for improvement. Many organizations aim for 5-10% month-over-month growth in SQLs.

2. Quality of SQLs

Generating a large volume of SQLs is great, but only if those leads are high quality. That‘s where this second KPI comes in. Quality of SQLs measures what percentage of marketing-generated SQLs are accepted by the sales team.

Why It Matters: Just because marketing has qualified a lead, doesn‘t mean sales will agree it‘s worth their time. If sales is rejecting a high percentage of SQLs, it indicates a disconnect between how the two teams define a quality lead. Tracking SQL acceptance rates is crucial for identifying such misalignments so they can be addressed. Improving SQL quality translates into more productive sales efforts and higher conversion rates.

How to Calculate It: Divide the number of SQLs accepted by sales by the total number of SQLs generated by marketing in a given period. For example, if marketing generates 100 SQLs in a month and sales accepts 75 of them, the SQL acceptance rate would be 75%.

Benchmark: Organizations should aim for an SQL acceptance rate of 80% or higher. If more than 20% of marketing‘s SQLs are rejected, the two teams need to work together to redefine the characteristics of an SQL and adjust lead scoring criteria as needed.

3. MQL to SQL Conversion Rates by Lead Source

Moving up the funnel from SQLs, this KPI looks at Marketing Qualified Leads (MQLs)—leads which have shown some initial interest and engagement with your marketing but aren‘t yet ready for sales outreach. Specifically, this metric tracks what percentage of MQLs are converting to SQLs for each of your lead sources (like organic search, paid ads, events, etc.).

Why It Matters: Not all lead sources are created equal. Certain channels or tactics will naturally drive higher-quality MQLs than others. Measuring MQL to SQL conversion rates by source allows you to identify which are delivering the best leads so you can double down on those investments. Simultaneously, it reveals underperforming sources that may need to be optimized or eliminated.

How to Calculate It: For each lead source, divide the number of MQLs that convert into SQLs by the total number of MQLs generated. Let‘s say your webinars produce 200 MQLs in a quarter, of which 50 turn into SQLs. Your webinar MQL to SQL rate would be 25% (50 / 200 = 0.25).

Benchmark: Again, there‘s no single ideal conversion rate to aim for as it will vary by source and the nature of your business. The key is to benchmark each source against the others to identify which perform above and below the average. Sources with the highest MQL to SQL rates should be prioritized and optimized for even better performance.

4. Lead-to-Customer Conversion Rate

Zooming out to take an end-to-end view, Lead-to-Customer Conversion Rate looks at how well your smarketing efforts are turning initial leads into paying customers. This "full-funnel" metric encompasses the combined impact of all your other conversion metrics.

Why It Matters: Ultimately, smarketing is about generating more customers and revenue. Leads and even SQLs are just stepping stones along that path—what matters is how many eventually convert to customers. Tracking this KPI provides a high-level assessment of how the entire smarketing machine is functioning and whether you‘re getting more efficient at converting leads into business.

How to Calculate It: Divide the number of new customers in a period by the total number of new leads generated in that same period. So if you brought in 1,000 leads last quarter and 50 became customers, your Lead-to-Customer Conversion Rate is 5% (50 / 1,000 = 0.05).

Benchmark: A good target to aim for is a 5-10% Lead-to-Customer Conversion Rate, though this will vary based on industry and business model (e.g., higher price point offerings will generally see lower conversion rates). SaaS companies often see 2-5% conversion rates, while e-commerce businesses may be 20% or higher. The most important benchmark is your own historical performance—aim to continually improve your rate over time.

5. Average Deal Size

Average Deal Size is a straightforward but crucial metric—it quantifies the average value of each new customer your smarketing efforts bring in.

Why It Matters: Average Deal Size provides essential context for all your other KPIs. You may be generating a large volume of leads and customers, but if they‘re mostly small deals, the revenue impact will be limited. Larger Average Deal Sizes mean you can hit your revenue goals with fewer deals. This KPI is especially important for companies with significant variation in deal sizes.

How to Calculate It: Add up the value of all deals won in a certain period (usually a month or quarter) and divide it by the number of deals. So if you closed 50 deals last quarter worth a total of $250,000, your Average Deal Size is $5,000.

Benchmark: Average Deal Size benchmarks vary wildly from business to business depending on what you sell, to whom, and at what price point. The key is to track your own Average Deal Size over time and aim for steady increases. Even small improvements can have a major revenue impact—increasing from $5,000 to $6,000 average deals yields an extra $50,000 per 100 deals closed.

6. Customer Lifetime Value (CLV)

Customer Lifetime Value takes your measurement of customer value to the next level by quantifying how much the average customer is worth to your business over the course of their entire relationship with you.

Why It Matters: CLV is the ultimate measure of your smarketing ROI. By understanding the long-term revenue generated by each customer, you can determine how much you can afford to spend acquiring them. Higher CLVs mean greater allowance for smarketing investments. This KPI is especially crucial for businesses with recurring revenue models and long customer lifespans.

How to Calculate It: There are various formulas for calculating CLV, but at its simplest, it‘s the Average Revenue Per User (ARPU) multiplied by the Average Customer Lifespan. Let‘s say you‘re a SaaS business with an ARPU of $100/month and customers typically stay for 24 months. Your CLV would be $2,400 ($100 x 24). More sophisticated approaches may also factor in gross margin or apply a discount rate.

Benchmark: Just like deal sizes, CLV benchmarks are highly specific to each business. What‘s important is to measure your CLV regularly and aim to increase it over time through a combination of increasing ARPU (e.g., upsells, cross-sells, price increases) and extending customer lifespans (i.e., reducing churn).

7. Marketing-Sourced Pipeline & Revenue

The last essential smarketing KPI looks at two interrelated measures: what percentage of your total sales pipeline and closed revenue is sourced from marketing efforts (as opposed to outbound sales prospecting).

Why It Matters: These metrics cut to the core of smarketing ROI—how much business is marketing generating for the company? Tracking marketing‘s contribution to pipeline and revenue demonstrates the tangible business value of smarketing efforts and helps secure budget and buy-in. It also shows marketing‘s influence on the metrics that matter most to the C-suite.

How to Calculate It: Pipeline contribution is calculated by dividing the dollar value of marketing-sourced opportunities by the total pipeline value. Revenue contribution is calculated the same way using closed-won business instead of pipeline. Remember to use the same time period (month, quarter, year) for marketing-sourced and total values. Your CRM should be able to produce these reports.

Benchmark: A study by Bizible found that marketing contributes 51% of total pipeline and 35% of total revenue on average. However, those figures vary widely—businesses with best-in-class digital marketing see contributions of 75% or more, while less mature organizations may be at 10% or less. Aim for continuous improvement in both metrics to maximize smarketing‘s business impact.

Additional Smarketing KPIs to Consider

While the seven KPIs above are essential for any smarketing operation, there are many others that can provide valuable insights. Here are a few to consider adding to your dashboard:

• Conversion Rates Through the Funnel: In addition to the full-funnel Lead-to-Customer metric, track conversion rates between each stage of your sales and marketing funnel (e.g., Visitor to Lead, Lead to MQL, SQL to Opportunity). This can highlight specific areas for improvement.

• Marketing Qualified Leads (MQLs): Just like SQLs, track the total volume and growth of MQLs being generated. This measures the top-of-funnel impact of your lead generation efforts.

• Sales Cycle Length: Measure the average time it takes to turn a lead into a customer. Reducing this cycle means more efficient revenue generation.

• Customer Acquisition Cost (CAC): Divide your total smarketing spend by the number of new customers to determine your average cost to acquire a customer. Compare this to CLV to ensure sufficient ROI.

• Website Traffic and Engagement: While not direct smarketing KPIs, metrics like traffic, bounce rate, time on site, and conversion rate indicate the effectiveness of your online lead generation efforts.

Aligning Around Shared KPIs

Tracking the right KPIs is essential for smarketing success, but just as important is getting your marketing and sales teams aligned around those metrics. Both teams need to be bought into the importance of the KPIs, understand how they‘re calculated and influenced, and be incentivized to improve them.

This alignment starts with shared goals. Marketing and sales leaders need to come together to set target benchmarks for each KPI and create a unified plan for achieving them. Those goals should be communicated clearly and regularly to both teams.

It‘s also important that both teams have visibility into the KPI data. Dashboards should be accessible to everyone and reviewed often in team and individual meetings. This keeps the metrics top-of-mind and enables both teams to spot issues or opportunities.

Finally, consider building KPIs into your compensation plans. Bonuses and commissions can be tied to hitting certain benchmarks. This ensures both teams are invested in the metrics and working together to drive improvement.

Leveraging KPI Insights for Optimization

Tracking smarketing KPIs is not just about measuring past performance—it‘s about uncovering insights you can use to optimize your efforts going forward. Regular KPI reviews should be focused on identifying areas for improvement and brainstorming experiments to run.

For example, if you notice that a particular lead source has a much lower MQL to SQL conversion rate than others, dig into why. Perhaps the targeting for that source is off, or the offers need to be better aligned with buyer needs. Use those insights to devise new approaches, then test them and measure the impact on your KPIs.

Or let‘s say your Average Deal Size is trending down over time. That‘s a signal that you may need to adjust your sales and marketing focus to target higher-value opportunities. Perhaps you start running account-based marketing campaigns to key enterprise accounts while simultaneously having sales reps prioritize larger deals in their outreach.

The possibilities for optimization are endless—the key is to regularly review your KPIs with an eye for insights and opportunities. Ongoing experimentation and iteration are essential for driving continuous improvement in your smarketing efforts.

The Bottom Line

In today‘s B2B landscape, sales and marketing alignment is more critical than ever. Smarketing is becoming a necessity rather than a luxury. But to make smarketing work, you need to be focused on the right metrics.

The seven KPIs we‘ve covered—from SQLs to CLV to pipeline contribution—provide a core set of measures that should be on every smarketing dashboard. They give you a essential high-level view of the health and impact of your smarketing efforts while also enabling you to drill down into specific areas for improvement.

Supplement them with other KPIs specific to your business, align your teams around your target benchmarks, and continually leverage your KPI insights for optimization. That‘s the recipe for smarketing success in 2024 and beyond.

Measurement is the first step that leads to control and eventually to improvement. If you can‘t measure something, you can‘t understand it. If you can‘t understand it, you can‘t control it. If you can‘t control it, you can‘t improve it.

So start measuring your smarketing efforts today—and start improving them for tomorrow. Your KPIs will light the way.