I'm sure there will be questions about the best KPIs to track, what are some of the *worst* KPIs to commit to achieving?
- This is another great question!
- I think there a few categories of KPIs where you should be wary:
- (1) KPIs or metrics that are out of your control.
- I fully believe that marketing and demand generation should be really focused on driving meaningful results for the business. I see a lot of folks talking about demand generation having a revenue target. I think that's a relevant lagging indicator, but a really hard leading indicator to drive. You want to be able to have controls on the inputs in order to be fully responsible for a metric.
- In the example of wanting demand generation to own a revenue-related number, I'd recommend breaking this down into something that you and your team can drive from a leading indicator point of view. Ex. revenue could be equivalent to a closed/won sales deal. Closed/won sales deals come from opportunities, and those opportunities are sourced across various teams: CS teams, AE teams, BDR teams, and demand generation teams. Demand generation teams should be responsible for working with sales folks on generating those opportunities. Unless marketing can direct the activities of AEs or CSMs to actually close the deals, they shouldn't be fully responsible for the ARR outcome.
- In this example, marketing should be responsible for an SQL or opportunity generated target as the leading KPI, and then you'd want to make sure you are tracking the performance and seeing how it turns into revenue as a lagging KPI. If you are hitting the leading KPI and missing the lagging KPI, then you can dig in to see where the miss is once the opportunity is generated. If all of the down-funnel results are
- (2) KPIs that are not meaningful to the business.
- On the flip side, you also want to be wary of KPIs that are too far away from core company objectives. You don't want to crush it and knock it out of the park on metrics that ultimately don't support the business and what's important.
- (3) KPIs that don't take into account the addressable audience
- Ex. Signing up for 50 people to attend an event, when the total addressable audience is less than 500 people. You have to take a look at the various conversion rates you would expect to see. Ex. if you can send an email invite to 500 people, you are likely to get (at best) a 30% open rate. That's 150 people opening your email. Then MAYBE you'll get 20% of folks to fill out the form to register to attend, so that's 30 registrants. Then, depending on if it is a virtual or IRL event, you may get 25-30% of folks showing up: That's 8-10 people.
- (4) KPIs that you don't have the means to achieve
- Ex. I always believe in stretch targets and the value of setting goals that align to the overall growth you are looking to drive for the business, BUT, you also want to make sure that you have the means: resourcing, budget, time, support to make progress against that KPI.
I’m going to give you two specific KPIs that I recommend against committing to if not paired with a quality metric. Why? These two metrics in isolation are not meaningful. They are solely quantity metrics with no quality indicators.
- Sign-ups or MQLs. Why? Similar to what I noted above if you exceed your target for this KPI, but it doesn’t translate to quality or an impact on the business, does it matter?
- Website traffic. Why? While important when paired with quality metrics, this KPI by itself is not very impactful. If your target audience is not visiting your website, this metric will not support your desired outcomes.
When you pair these KPIs with quality indicators you can better understand if your targeting is correct. You can better understand if you are delivering on your `marketing promise` and providing value to customers. However, without this layered approach, they are solely just counts. This will differ depending on your go-to-market motion and business, but the recommendation holds true.
I love this question, though it’s a challenging one because there are plenty of KPIs that can be misleading or even counterproductive to commit to. Generally, I believe it's best to avoid KPIs that seem too easy, too vague, or overly flattering. The reason is simple: there are countless ways to tweak metrics to make them appear more favorable than they actually are.
Common Quantitative Pitfalls (often volume-based without a quality component):
-Leads collected during an event: For instance, it’s easy to boost lead numbers by simply scanning badges at the keynote entrance without real interaction. Many tradeshows now have strict guidelines on when, where, and how to scan leads to avoid these issues (I sense some crazy stories behind these rules). You may need 10 conversations at an event to get great results.
-Email open rates: These can be inflated by factors like bots opening emails or people who want to unsubscribe...
-Cost per lead (CPL): This one is particularly tricky. CPL can often be optimized in ways that look impressive on paper but don’t translate to real value. High CPL might yield more leads quickly, but without quality, it can flood SDRs with poor leads, erode trust in Demand Gen, and disrupt sales-marketing alignment. In my experience, CPL is one of the riskiest KPIs to commit to without a focus on quality.
Qualitative Pitfall: Committing to Company Names and Job Titles (Another Favorite Example)
This may sound counterintuitive, but committing to only high-quality leads based on company names, job titles, and professional email addresses can have unexpected drawbacks. In one case, we prioritized leads with ideal company names, professional emails, and fitting job titles, yet conversion rates declined over time. The reason? Cold channels like content syndication and LinkedIn Lead Gen were generating these ‘ideal’ leads, and more qualified leads without specific companies or emails (e.g., trial or demo requests) were deprioritized, which slowed down the sales pipeline on the long term.
Ultimately, the best KPIs balance quality with impact across the full funnel.