Alright, this will be a bit of a heavy one - but trust me, it’ll be worth your time.
Growing a B2B company comes with its challenges, we all know that. However, when focusing on measuring the right metrics, you can make your path much clearer. Also, you need to remember metrics are more than just numbers, they provide insights that help you understand where to focus your efforts, what impacts what and where adjustments are needed.
They can also help you figure out whether your long term focused strategies are making an impact on your business. Holdout groups can be specifically interesting in this regard as well, but that will be for a later blog post.
For now we’ll look at the essential B2B metrics every company should track and to make it easier, I’ve grouped them into the following sections:
Customer Acquisition Metrics: Measuring how efficiently you’re acquiring new customers.
Revenue and Retention Metrics: Understanding and increasing customer value over time.
Sales Metrics: Optimizing your sales pipeline for faster, more effective deal closures.
Strategic Metrics: Gaining a big-picture view of your business’s overall health and alignment.
Each section is designed to build a cohesive growth strategy, showing how these metrics interconnect to drive better results.
Let’s get to it 🤺
Every successful business starts with a solid understanding of acquisition costs and efficiencies.
These metrics help you evaluate how much you’re spending to bring in new customers and whether those efforts align with broader financial goals. Without these benchmarks, it’s very difficult to know if specific activities are driving good enough results to continue doing them, or to understand when certain activities are performing really well.
Both are interesting scenarios and you should be making sure to learn from them.
This is the cornerstone metric for evaluating how much your company is spending to acquire new customers.
When combined with e.g. customer lifetime value or similar metrics (those will come later in this post), your CAC can quickly tell you what activities you’re making money from and where you’re not.
How to calculate it:
CAC = (Total Sales + Marketing Expenses) / Number of New Customers Acquired
How quickly does a new customer’s revenue cover their acquisition cost?
This metric answers that question, helping you manage cash flow and reinvest intelligently.
How to calculate it:
CAC Payback Period = CAC / Average Revenue per Customer per Month
Shorter payback periods mean your company can scale faster without getting in trouble with your cash flow.
Conversely, if you’re experiencing a long CAC payback, you’d likely want to figure out how you can (1) create opportunities cheaper (through outbound or inbound), (2) bettering our sales velocity, (3) look at your pricing or (4) see if you can influence your expansion revenue (will be explained later) on your customers.
While CAC measures the big picture, CPL gets more granular. It shows how much you’re spending to generate individual leads, making it easier to compare the effectiveness of different marketing channels or campaigns.
As mentioned in the CAC payback period, here’s one example of where you’d look to bring down the cost per opportunity, which in turn can help you bring down your total CAC.
How to calculate it:
CPL = Total Marketing Expenses / Number of Leads Generated
A high CPL might signal misaligned targeting or an underperforming campaign. On the other hand, a low CPL could mean you’re generating unqualified leads that don’t convert. Finding the balance is key and ultimately what you’re looking for is figuring out how you can create as many high quality leads as possible.
A typical trap is to believe a campaign is underperforming solely because the CPL looks high compared to other campaigns or platforms. Because, when you’re instead comparing the price per opportunity or CAC, those high CPLs might be those worth the most to your company. This is often the case when companies compare LinkedIn to e.g. Meta or similar.
You need to invest in a CRM (e.g. HubSpot) and preferably an attribution software (as for instance Dreamdata) to better understand not only what drives the lowest CPL, but more importantly the highest ROI.
This ratio highlights the efficiency of your lead qualification process. A strong ratio means your marketing team is great at identifying leads that are likely to convert, while a weak ratio can indicate misalignment between sales and marketing, or the need for more nurturing after generating new leads.
How to calculate it:
MQL to SQL Ratio = Number of SQLs / Number of MQLs
When it comes to lead qualifications processes, it’s important to have patience.
You can greatly increase your chances for converting MQLs or SQL into opportunities by accepting most needs to be nurtured for a longer period of time before wanting to talk to sales.
This is an important one.
Because, how well are your leads converting into paying customers?
This metric measures the effectiveness of your entire sales and marketing funnel.
How to calculate it:
Lead-to-Customer Conversion Rate = (Leads Converted to Customers) / (Total Leads) × 100
This will quickly tell you if there’s either something wrong with your quality of leads or with your sales process.
It’s also interesting as heightening your lead-to-customer conversion rate can be much more impactful in the short-term than just increasing your volume of leads. Many companies are so focused on lead volumes they forget how much they can actually improve their business by focusing on converting more of their existing leads in the first place.
Alright, so above I introduced you to some key metrics regarding how efficiently you are at getting new business.
However, after you’ve gotten your new customer, you’d now like to look at revenue and retention metrics as they shine a light on the customer journey beyond acquisition.
They focus on building long-term relationships, generating recurring revenue, and reducing churn. Doesn’t sound too bad, right?
First one is the famous customer lifetime value.
LTV is your blueprint for understanding the long-term profitability of a customer.
It answers a key question: how much revenue will a customer generate during their entire relationship with your company?
How to calculate it:
LTV = (Average Revenue per Customer × Gross Margin) / Churn Rate
If your LTV is low, it could mean high churn, low gross margins, or a misalignment in your product’s value. You’d like to care deeply about your LTV, as improving it helps justify acquisition costs and generally opens up for many more ways of growing your business.
This ratio measures the return on your acquisition costs. For example, a ratio of 3:1 indicates that every dollar spent on CAC generates three dollars in lifetime revenue.
If the ratio is too low, you’re likely overspending on acquisition or underdelivering on retention.
How to calculate it:
LTV-to-CAC Ratio = LTV / CAC
Also, circling back to the point about worrying more about quality than volume, low CPL customers might have a much worse ratio than high quality, high CPL customers. Hence, be sure to monitor where you’re getting your most valuable customers.
High churn is always worrying and it can make it significantly harder to get great acquisition as churn can push for the need of an unrealistic CAC.
By measuring churn, you can pinpoint where and why customers are leaving and take proactive steps to fix it.
How to calculate it:
Churn Rate = (Number of Customers Lost in Period) / (Total Customers at Start of Period)
This metric focuses on the flip side of churn: how well you’re retaining customers.
A high retention rate often signals strong product-market fit and customer satisfaction.
Having a clearly defined Ideal Customer Profile really helps on this and the above metrics. I’ve written another blog post about ICPs and how you can build one for yourself. Take a look if you haven’t already.
How to calculate it:
CRR = ((Total Customers at End of Period - New Customers Acquired) / Total Customers at Start of Period) × 100
NRR tracks the net revenue impact from your existing customer base, accounting for upsells, cross-sells, and churn.
It’s a great indicator of how well your company is growing revenue without relying on new customers and as with so many of the remaining points made already in this post, learning how to make more out of your existing customers is a hidden gold mine.
How to calculate it:
NRR = ((Revenue from Existing Customers + Expansion Revenue - Churned Revenue) / Revenue from Existing Customers at Start of Period) × 100
You’d like to keep track of it because even with some churn, a high NRR (over 100%) means your business is growing within its existing base.
It’s particularly interesting for SaaS and subscription businesses.
You might also have heard about NRR as non-recurring revenue.
Likewise an interesting metric to keep an eye on, but for now, our NRR is net revenue retention 😉
Although this is partly accounted for in your NRR, expansion revenue tracks the revenue generated through upselling, cross-selling, and add-ons.
A bit more simple, but yet it’s crucial for businesses that rely on account expansion for growth.
Manufacturing companies could be a good example. They invest quite heavily in the production of specific goods and services and rely on customers returning with similar inquiries over a longer period of time.
How to calculate it:
It’s a tough one, but you do it like this 😎
Expansion Revenue = Revenue from Upsells + Cross-sells + Add-ons
MRR and ARR track predictable, recurring revenue streams, providing the foundation for revenue forecasting in subscription-based models or when needing to forecast periodically.
Formula for MRR:
MRR = Total Monthly Subscription Revenue
Formula for ARR:
ARR = MRR × 12
ARPU helps you understand the value of each customer by calculating the average revenue they generate.
How to calculate it:
ARPU = Total Revenue / Number of Customers
It’s particularly useful for segmenting customers by revenue potential and tracking the impact of pricing changes.
You now know how to measure how efficiently you drive in new business and you also know how well you’re managing growing your customers afterwards.
Going back to acquisition efficiency, you’d like to look at sales metrics to ensure your leads don’t just sit in the pipeline, they need to move through it efficiently.
The metrics in this section help you uncover inefficiencies, improve conversion rates, and close deals faster.
Sales teams rely on these insights to identify bottlenecks and prioritize high-value opportunities, while marketing teams use them to optimize lead generation efforts.
The longer it takes to close a deal, the more resources it consumes.
Hence, this metric shows the average time it takes to turn a lead into a customer.
How to calculate it:
Sales Cycle Length = (Sum of Days to Close Each Deal) / (Number of Deals Closed)
It’s not only interesting from a cost point of view, but also for forecasting and in particular, to know realistically how quickly you can expect to be able to measure revenue from your marketing campaigns.
There’s a measurement paradox being that more than 70% of all marketers attempt to measure the ROI of their B2B campaigns after only 1 month, while we know statistically that sales cycle lengths on average are 192 days - making it statistically impossible to measure whether the campaign drove closed won business or not.
Only 4% of marketers measure campaign ROI after 6 months or longer, which is what you should be aiming for.
To allow yourself to measure over longer periods of time, you should also be paying attention to all metrics leading up to a customer closing.
Sales Velocity combines several key factors (deal size, win rate, cycle length, and opportunity volume) into one metric that reveals how quickly your pipeline is converting into revenue and is a bit more interesting than your sales cycle length alone.
How to calculate it:
Sales Velocity = (Number of Opportunities × Average Deal Size × Win Rate) / Sales Cycle Length
If your velocity is low, it might indicate bottlenecks in your sales process or that you’re not focusing on high-value opportunities.
As the name implies, your win rate reveals how effectively your sales team is converting opportunities into closed deals.
Sounds simple, doesn’t it? (plot twist, it’s not).
If win rates are low, it might signal issues with lead qualification, competition, or your sales process.
How to calculate it:
Win Rate = (Number of Closed-Won Deals) / (Total Opportunities) × 100
To further elaborate on win rates, breaking down win rates by stage reveals exactly where deals are stalling or falling through in the pipeline.
Focusing on a more granular view here enables teams to focus their improvements on specific touchpoints and can impact your business very significantly. It can also shed light on whether your business is experiencing a marketing problem or a sales problem.
How to calculate it:
Stage Win Rate = (Opportunities Won from a Stage) / (Total Opportunities in that Stage) × 100
This is also a great way to be working on your sales & marketing alignment.
In many cases, making a metric like this one comes down to how well your two departments manage to work together in getting your prospects through your pipeline.
Way too often marketing to sales handoff happens too early in your sales process, instead of increasing your chances of closing new business by continuing to nurture your opportunities and their respective target buyers and hidden buyers at the same time.
Last but no least, you need to be paying attention to strategic metrics that offer a bird’s-eye view of your company’s overall health.
These metrics pull data from across teams and focus on long-term growth, customer satisfaction, and profitability. They’re the metrics that executives and decision-makers need in order to make informed, strategic decisions.
Pipeline Coverage shows whether your sales team has enough opportunities to meet their revenue targets.
How to calculate it:
Pipeline Coverage = Total Value of Opportunities / Revenue Target
If your sales team does not have enough opportunities, continuously keeping an eye on this metric can help you make clever decisions early, instead of waiting for the end of the year and then being forced into a lot of ineffective and costly short term panic decisions.
It might also be that you are pacing fine in one area of your business, but another one is having a hard time meeting the target of the year. In that case you’d like to channel your focus more specifically there and do so as early as possible.
Generally not having to make decisions in an instant helps you in the long run.
Gross Margin measures profitability after accounting for direct costs.
It’s a fundamental measure of how efficiently your business generates revenue.
How to calculate it:
Gross Margin = (Revenue - Cost of Goods Sold) / Revenue × 100
A healthy gross margin is important for maintaining operations and reinvesting in growth, especially in industries with high overhead.
ROMI evaluates the profitability of your marketing efforts, highlighting which campaigns deliver the best returns.
How to calculate it:
ROMI = (Revenue from Marketing Campaigns - Marketing Costs) / Marketing Costs × 100
However, be very careful when doing so!
Measurement and attribution might be the single most difficult task in B2B, so it’s very easy to end up shutting down important activities here - simply because you don’t have the tech stack to get accurate tracking or because you don’t have the talent or the resources to interpret the data you have available.
Again, investing in a CRM and an attribution platform is absolutely necessary to get just remotely close to a picture you can trust.
More and more businesses start to understand the importance of long term branding and demand generation strategies, but unfortunately they are also the hardest one to track. Additionally, as I’ve already mentioned multiple times, your ROI or ROMI should be looked at not from the surface, but from analysis looking at the actual pipeline.
Hence, make sure to refine your measurement as much as possible and recommendably also include something like self-reported attribution or alike.
CHS predicts customer renewal likelihood by combining factors like engagement, usage, and satisfaction. It provides an early warning system for identifying at-risk accounts.By tracking CHS, your business can intervene proactively to prevent churn and improve customer satisfaction.
NPS measures customer satisfaction and loyalty, providing insights into how likely customers are to recommend your company to others.
How to calculate it:
NPS = % Promoters - % Detractors
A high NPS correlates with increased referrals, stronger retention, and higher expansion revenue.
First and foremost, congrats!!!
You made it through and likely now much better equipped at looking at your business from multiple areas to identify windows of opportunity.
Okay, so - to conclude on all of the above, remember metrics aren’t just numbers, they’re the tools that drive decision-making and align your teams toward shared goals.
By organizing metrics into acquisition, retention, sales, and strategic categories, you create a clear framework for measuring success across your business.
Each metric serves a unique purpose, but together, they paint a complete picture of your company’s performance.
Whether you’re scaling operations, optimizing your pipeline, or building long-term relationships, these metrics ensure you’re growing with clarity and confidence.
Also, once you learn how to measure most of these metrics, you can talk to many more internal stakeholders in a language they understand and care about, while also strengthening your own ability to calculate in which ways you can make an impact on your business.
Hope you liked it!
Then reach out to me on email, kh@profoundnorth.com, or by phone, +45 28 88 12 62.
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