What's your process for figuring out what metrics to hold demand generation accountable for?

Demand gen is responsible for every stage of the funnel but accountable for stages where they have ~50%+ of the influence on that stage compared to sales.

For example, 

Demand generation at the awareness stage is 100% responsible for delivering that message to the masses by driving the DG machine to those target accounts. 

Demand gen can support leads that come in by educating them through email and display even while sales reps work that lead. 

Demand gen also supports leads down to stage 2-3 SFDC by displaying social proof campaigns, and email campaigns about social proof, and even host events to invite prospects and clients to close big deals. 

Every stage after that is beyond demand gen in my opinion. There are ad hoc cases where custom landing pages, custom sales decks, and custom ROI packages are created and delivered but that's a tight partnership with sales so both marketing & sales are accountable for that. 

I’m going to approach this question from a product-led growth (PLG) perspective. My process for identifying the appropriate metrics consists of mapping out the user journey along with its associated metrics.

For example, a user will sign up, experience value, engage, stay retained and hopefully refer others and expand. Then I would identify the metrics that align with this flow. This would consist of metrics such as:

• Count of sign-ups
• Sign-up rate
• A quality metric based on your goals
• Activation rate
• Engagement rate
• Retention rate
• Churn rate

From a PLG perspective, I do believe in being responsible for metrics past the sign up. This does fall into the world of growth marketing, but especially in today’s economy, it’s smarter marketing.

Understanding what factors influence your company's buyer cycle is the first step, including the company's goals, market, and target audience. 

1. Define your goals: Start by understanding the goals of your company and how demand generation fits into those goals. Are you trying to increase revenue, expand your customer base, or drive more engagement or a mix of them? Your goals will guide your metrics.

e.g. for an early-stage startup, it is more important to create awareness and build a marketable database, therefore account engagement and lead generation metrics (# of leads, # of MQLs, # of SALs and account engagement share) are going to be very important. On the other hand, for a more mature company, revenue or margin metrics could matter more (ROI of marketing spend, attribution models, ABM engagements)

2. Identify your target audience: Next, you need to understand your target audience and what they care about. This will help you identify the metrics that matter most to them and the channels that will be most effective in reaching them.

e.g. In a technology company with sales cycles longer than 12 months and large buyer's committees, you will need to define audiences considering job titles and seniority and target them with different types of content on different channels based on their preferences. Each campaign based on the audiences and tactics will require different metrics.

3. Identify your channels: Once you know your audience, you can identify the channels you will use to reach them. This may include social media, email marketing, paid advertising, or other channels. Each channel will have its own set of metrics that you can use to measure success.

4. Determine the metrics: Based on your goals, target audience, and channels, you can determine the metrics that you will hold demand generation accountable for. Some common metrics include:

• Lead generation: This measures the number of leads generated by your demand generation efforts.
• Cost per lead: This measures the cost of generating a lead, and can help you optimize your spending.
• Conversion rates: This measures the percentage of leads that convert into customers or make it to different stages of the sales funnel.
• Customer acquisition cost (CAC)

Set targets: Once you have identified the metrics you will track, you need to set targets for each metric. These targets should be realistic, achievable, and aligned with your overall goals. Research benchmarks from companies in your industry and similar size.

5. Monitor and optimize: Finally, you need to monitor your metrics regularly and optimize your demand generation efforts based on the data you collect. As the business grows and market conditions change, so will your metrics. 

Overall, the process for figuring out which metrics to hold demand generation accountable for requires a deep understanding of your company's goals, target audience, and channels. The metrics that matter most and drive growth and success vary by industry, company/market maturity and so on, so always review your company's business model and be flexible to adapt and change. 

When demand generation teams are held accountable for sales qualified leads (SQLs), pipeline and closed-won revenue, the process defines itself. Here's why:

1. It encourages collaboration between sales and marketing. Marketing is incentivized to generate quality leads that convert into SQLs

2. Sales teams look up to marketers to help them meet their revenue goals

3. It is incredibly rewarding to look back at the end of the quarter/year to see that our campaigns drove x% customers and $ ARR

Framing KPIs in terms of control and impact: if you control it or influence it, you can own it. In Demand Gen, we can control lead quality, MQLs routed to sales, and even the initial stages, such as Sales Accepted Leads, meetings, and early-stage opportunities. However, once we move past meetings and into opportunity creation, we enter a gray area. At that point, we’re less in control of what sales is doing during meetings or POCs, making it harder to be accountable for bottom-of-funnel outcomes.

Similarly, in a self-serve model, it’s challenging to be fully accountable for results that are dependent on the product experience and UX. We can drive engagement with emails and in-app messages to guide users toward a successful trial, but ultimately, accountability for product and UX changes lies outside of our control.

Ultimately you want to work across the company's leadership team and determine what is most important to them and what success for marketing and demand generation looks like. If leadership is not bought into what marketing is measuring or finds important, then it will create a disconnect that is difficult to overcome. Now, seeing that all companies and leadership teams are different, I strongly recommend trying to tie your demand generation efforts as close to company revenue and tangible ROI as possible. So while impressions, clicks, click-thru-rates, website visits are all important marketing inputs to measure, it's always best to align on KPIs and metrics that show the impact on the business. This typically looks like number of MQLs, SQL, marketing generated and influenced opportunities and associated pipeline generated. Once you can align on the definitions of these KPIs for your business, signing up for a specific percentage of pipeline sourced via marketing is the ultimate way to show marketing accountability and impact on the business. Fewer actionable and impactful KPIs is better. The same is true for a self-service SaaS model. Tying your efforts and holding your team accountable to the metrics that matter is most important (i.e. product downloads, trials started, trails converted, paying customers, etc.).

I think most teams have got themselves to the point where the answer is pipeline and bookings. If you think about bookings and pipe as level one KPIs, then creating level two KPIs for your team to be held accountable for would be for programs and tactics that lead to pipe for your business.

Some examples might be source meetings (pre pipe), quality leads. I'll use this one as an excuse to also mention spending your budget! % of planned budget spent.

I always start with pipeline and am hard-pressed these days to find a DG team that doesn't have pipeline as their key result. The pipeline conversation should happen with all pipeline-generating teams – to ensure every team knows how much pipeline they're responsible for AND agrees on what's considered “marketing pipeline” vs “sales”, etc. 

Then I work backwards from pipeline. I look for the biggest impact levers I can pull in each channel - increasing conversion on the website; getting more meetings booked pre-event; improving speed to lead for demo / trial requests. I also have a “maintenance KPI”, something I'm not trying to increase or decrease but keep steady. If for example, I want to get more meetings from events, I'll also have a maintenance KPI of how meetings convert to pipeline. Otherwise, I might overachieve on meetings, but if they don't actually convert to the next stage, that's not really a win.

The process I use to determine which metrics to hold demand generation accountable for can be summarized into four key steps:

1) Assess the Current Situation

• Go on a listening tour: Speak with key stakeholders across marketing, sales, and customer success to understand how demand generation is currently perceived and what outcomes they expect. Gather insights into past campaigns, successes, and failures to build a baseline understanding.

• Gather tribal knowledge: Learn from team members with historical context about what has been tried before and what worked or didn’t work, which can reveal nuances that aren’t documented.

• Understand the martech stack: Evaluate the tools currently in place for lead capture, campaign execution, attribution, and reporting. Identify which tools are being used effectively and which are underutilized. This will inform what metrics can realistically be tracked and measured.

2) Identify What’s Important to Leadership

• Clarify business goals: Understand the overarching business objectives, such as revenue growth, market expansion, or customer retention, and how demand generation is expected to contribute.

• Engage with leadership: Collaborate with executives to define their expectations for demand generation. Do they prioritize top-of-funnel activities like lead volume, or are they more focused on pipeline velocity, deal size, or customer acquisition cost (CAC)?

• Align on outcomes: Ensure the metrics align with both marketing and broader organizational goals, so that demand generation efforts are seen as directly contributing to business impact.

3) Determine Gaps in People, Processes, and Tools

• People: Assess whether the team has the right skill sets to execute and measure demand generation effectively. Are there specialists in analytics, campaign management, and martech who can ensure metrics are tracked accurately?

• Processes: Evaluate the current workflows for tracking and reporting metrics. Are there established processes for lead qualification, handoff to sales, and feedback loops? If not, how quickly can they be established?

• Tools: Identify gaps in tools needed for accurate measurement, such as CRM integrations, attribution software, or advanced reporting capabilities. Addressing these gaps ensures metrics are actionable and reliable.

4) Understand the Organization’s Data Maturity

• Evaluate data quality: Assess whether the organization has clean, consistent data across platforms. Poor data quality can lead to inaccurate metrics and undermine decision-making.

• Assess attribution capabilities: Understand how well the organization can attribute demand generation efforts to revenue outcomes. For example, can you track multi-touch attribution, or are you limited to first- or last-touch models?

• Tailor metrics to maturity: Set realistic expectations for metrics based on the organization’s data and reporting maturity. For example, if attribution is a challenge, focus on pipeline contribution metrics rather than precise ROI calculations.

Following this process helps to ensure that the metrics chosen are not only actionable but also aligned with the organization’s strategy, resources, and data capabilities. But it's also completely feasible that there may be additional steps to the process I outlined above and will depend on the overall maturity of the organization you are currently at.

Start with understanding what the business cares about most. All Demand Gen teams are expected to help drive pipeline and bookings, but you should try to get as much context on both as possible. For example, is the business trying to move upmarket? If so, over what timeline? To what extent do your current-state investments support that objective? Are you hiring new reps? If so, in what segments/markets?

The closer you can align your Demand Generation strategy to business objectives, the easier it will be to establish appropriate metrics for the team. For example, in the hypothetical above (i.e., business moving upmarket over X quarters), you will need to establish goals tied to growth within the Enterprise or Mid-Market segments instead of setting holistic lead, pipeline, and marketing-originating bookings goals.

The metrics you hold demand generation accountable for will vary depending on the stage of your business and the maturity of your analytics 🔍. A startup, for instance, will need to focus on different metrics than an established brand. Similarly, how well you understand your full funnel will dictate whether you prioritize testing new strategies or doubling down on proven tactics.

Here’s my (made-up-on-the-spot) step-by-step process for determining the right metrics:

1. Understand Your Funnel 🧩:

   • Map out your conversion metrics.

   • Identify key touchpoints: How many leads do you need to create an opportunity? What are your conversion rates from MQL (Marketing Qualified Lead) to SQL (Sales Qualified Lead) to SQO (Sales Qualified Opportunity) to closed-won deals?

   • This foundational understanding helps you pinpoint where to focus and what success looks like.

2. Define Accountability Metrics 🎯:

   • Early-stage companies might track activity-level metrics such as MQLs, meetings booked, or demos requested.

   • Later-stage companies often hold demand gen accountable for broader outcomes like top-of-funnel pipeline or pipeline contribution to revenue.

3. Start Small If Needed 🛠️:

   • If your analytics aren’t fully mature, focus on individual activities, such as evaluating the ROI of specific trade shows, ad campaigns, or events. This micro-level analysis can guide initial accountability until you develop a clearer picture of your funnel dynamics.

4. Align Metrics With Budget and Scale 💵:

   • Your available budget and organizational size will influence what you measure. For instance, a smaller budget might prioritize fewer, high-impact activities, while a larger one allows for broader experimentation.

By following this process, you’ll set demand generation up for success with metrics that are actionable, aligned with your stage of growth, and directly tied to business outcomes 🚀.