Lasers, optics, and imaging are industries with high growth potential as biomedical and other companies turn to photonics in pursuit of miniaturization and performance jumps. Many optics companies reach a certain size by word of mouth and referral. As they enter second-stage growth, this isn’t a scalable approach. For engineers and scientists there’s an inherent skepticism of marketing, but establishing clear metrics and tracking them regularly can help business leaders prove ROI. So what metrics matter most?
We’ve identified seven key performance indicators that are especially valuable to optics companies in creating a marketing plan and assessing its effectiveness.
More on creating a simple B2B marketing plan.
7 Key Marketing Metrics
1. Cost per lead
Calculating the cost of acquiring a single lead helps you determine where to spend and where to save in your marketing budget. Here are some benchmarks:
• The average cost per lead for companies with $250,000 to $10 million in revenue is $26-50. (HubSpot)
• U.S. companies spending more than $25K per year on inbound marketing in 2013 saw an average CPL of $36 vs. $41. (HubSpot)
Trade shows such as SPIE Photonics West are an important lead generation tool for optics and photonics companies. To calculate cost per trade show lead, simply add up what you spent on exhibitor fees, travel, sales and marketing, and promotional items and divide by the number of leads obtained.
Exhibitor Magazine reported that the average costs per lead across industries from trade shows were:
• $189 per attendee that visits your booth
• $276 per attendee that engages in conversation
Number of qualified leads can be an even better indicator of success than total leads. Especially in targeted industries such as optics, it’s vital to know if your efforts are attracting the right type of prospects. According to Launch Team's 2016 survey of Photonics West participants, 63% of companies track qualified leads as a measure of trade show success.
We like ROI better for both trade shows and inbound marketing, but few companies have full-pipeline data available to calculate return on investment from a marketing activity. ROI equals the lifetime value of a customer divided by total acquisition cost.
2. New traffic
Companies that engage in strategic, monthly inbound marketing activities experience significant growth in new traffic each year. These companies are not startups—they’re pursuing organic growth and gaining market share through a content marketing strategy that that attracts the right visitors at the right time.
Learn how an optical assembly company doubled web traffic in one year and closed 6-figure accounts from web-generated leads.
3. Click-through rate
When quantifying the success of digital advertising, click-through rate (or CTR) is more important than number of impressions. Whether you’re using Google AdWords or paying for banners on a trade publication’s website, views alone don’t tell the whole story.
There is something to be said for impressions as a measure of brand awareness, if branding is your primary goal and your ad is well designed for that function. But for most product or capabilities ads, click-through visitors and their resulting interactions are better gauges of whether or not you’re effectively targeting your customer.
What should you expect?
• The average click-through rate on AdWords paid search ads is about 2%. (WordStream)
• Across all ad formats and placements, display ad CTR is about 0.8%. (SmartInsights)
4. Bounce rate
After visitors click through to your website, you want them to stay on your site for as long as possible. Companies in the optics industry should aim for a bounce rate under 50%. Keep an eye on your landing pages for Google AdWords and other campaigns, and evaluate both quantity and quality of leads generated. If your page has a high bounce rate and low conversion rate, or if those leads aren’t relevant to your business, then the traffic you’re paying for likely is not the right traffic.
5. Marketing budget as % of revenue
In B2B marketing, companies looking to grow should budget 1-6% of revenue projections for marketing. If you’re also expecting to overhaul your brand or web presence, budget toward the upper range.
6. Sales funnel conversion
Driving new leads is one thing, but closing them is another. Identify opportunities for growth in your marketing and sales process. Learn more about using metrics to improve sales and marketing alignment.
7. Close rate
Aim to close 30% of qualified leads. Qualified means they’ve passed the “money test” and have an interest, need, and budget to purchase. For those companies whose leads come almost exclusively from word of mouth or referral, the close rate can be as high as 80%. But are these businesses getting enough referrals to thrive?
Shifting to an inbound marketing approach can help you attract potential buyers, and it doesn’t mean you have to sacrifice personal, high quality customer relationships.
Launch Team’s Marketing KPI Worksheet can be used to easily track your most important business and marketing metrics. Download the worksheet, or contact Launch Team for more guidance.
