What to expect in 2023? After the last two years, we are prepared for anything! There are ongoing changes to privacy regulation and management that will impact what you can measure, and what you should expect in the year to come.
2023 Market and KPI Assumptions
B2B tech only. We work with B2B companies in niche tech industries with complex sales cycles, such as advanced manufacturing, optics, and photonics, and automation. The key performance indicators (baseline and benchmark) data shared below are exclusive to those industries. This typically means:
- Complex sales cycles, from 2-6 months or longer
- Larger deal sizes, for example, $100,000 per customer in annual spend
- Multiple decision-makers
Based on organic growth goals. KPIs are appropriate for companies looking to beat the CAGR and pick up a little market share, targeting double-digit growth.
Pursuing an inbound marketing/digital marketing strategy. For companies in year 1 of a shift to digital, the gains are far greater. The gains are even greater for those pursuing an omnichannel strategy (investing in all of the channels).
Every company’s strategy and key performance indicators are different. Contact us for a data-driven look at your goals and targets.
Now, with those disclaimers out of the way, we are happy to share sample KPIs for advanced manufacturing and tech companies with a large deal size and a complex sales cycle.
Baseline and Benchmarks for Marketing KPIs
Revenue Growth:
- Expectation 15%
- Baseline 10%
The total US market is expected to grow at less than 1% in 2023 and possibly slower in 2024, with inflation and the banking crisis weighing on consumer and business spending.
Recurring Revenue and Customer Satisfaction:
- 80% recurring revenue
This may not be a blanket PO or a known product, but healthy companies in these sectors should be able to count on 80% of their prior year's revenue repeating from existing customers.
McKinsey research shows that companies that focus on the customer experience and have higher net promoter scores generate twice the revenue growth of companies with lagging net promoter scores.
This suggests a need to anticipate replacement revenue of 20% in your sales and marketing strategy. Seeing higher turnover? If you are not measuring customer satisfaction, 2023 is a good year to survey your customers and monitoring the results over time. An annual, quarterly, post-transaction, or milestone NPS survey is an easy and helpful way to tune into your customers.
Traffic:
- Ongoing: 20%, month over month
- Baseline: 15%
For companies moving to a digital strategy, launching a new website, or otherwise making a significant investment in overhauling their web presence, expect to double your traffic in a year as a baseline.
For those regularly engaged in inbound marketing, look for 20% to 30% growth this year. Watch for coming algorithm changes, and publish unique content regularly. Note that the move to Google Analytics 4 (G4) may require you to refresh your baseline metrics.
Leads:
- Ongoing: 15%, month over month
- Baseline: 10%
Be clear in what you mean by lead. New contact? MQL? SQL? Make sure sales and marketing and any partners share the same definition and criteria.
Conversion:
- Traffic to Lead: 1.25% baseline
- Lead to Opportunity: 5%
Deal size, average cycle time, and many other metrics are worth measuring. Conduct a periodic deep dive, but a few, forward-looking metrics belong on your dashboard.
Alternatives or additions to this KPI are:
- RFQs per month: easy to track, even if manual
- Quote win rate: under 33%, may require customer discovery. If your close rate is well over 50%, you may be underpricing.
- Deal size: what is the average deal size and what is the trend?
Email Marketing
This metric needs revisiting this year, due to privacy changes that can cause a falsely inflated open rate. 21% has been a long-standing industry benchmark. While email remains an effective medium, it will become harder to measure. Shift to a click rate or engagement metric and adjust your lead scoring accordingly.
Social Media
Two to three years ago, we would've argued that followers were a vanity metric and that it was most important to measure the percent of traffic from social media (an 11% benchmark). It’s imperfect: LinkedIn traffic registers as direct traffic in many analytics platforms, but month over month, it’s a pretty good guide. Behaviors have changed though: social media is driving engagement and sales without click-through to your website. Consider:
- Engagement metrics
- New followers/month: 1-2 a day, or 45/month
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A paid social campaign: grow your audience for future content
Video
Video has become an increasingly popular tool for marketing, sales, and service. Social media has the highest ROI when sharing videos. YouTube is the obvious choice, but also consider TikTok, Instagram, LinkedIn, and Facebook.
E-Commerce
B2B e-commerce is now rated the most effective sales channel. This, combined with digital self-serve channels, is winning market share for the companies utilizing it.
Account-Based Marketing
20% of accounts targeted through ABM become a qualified sales opportunity.
If you have a target list of accounts, you should track some marketing KPIs specifically for those accounts. Consider things like the number of new contacts, engagement, and conversions for contacts within your accounts.
How to plan for your 2024 sales and marketing plan?
In 2020/2021, we saw average deal size shrink dramatically due to risk aversion, but overall customer lifecycle value remains high. In 2022, customer behavior began to return to pre-pandemic behavior, while 2023 shows increased sales cycle length as companies voice concerns over global geopolitical conditions. What’s to come for 2024? It’s too early to say, but winning marketing strategies, customer personas, and the buyer's journey are changing rapidly. Now is the time to refresh your customer discovery, market analysis, and sales and marketing playbook. Book a meeting.
