Businesses are increasingly focused on cutting costs and optimizing operations today than ever before, especially in the SaaS sector, where investor scrutiny has intensified many fold. Venture backed companies that could earlier rely on aggressive spending to acquire customers and boost valuations find that such strategies aren’t scalable anymore and have failed to deliver on its promise of long-term profitability. As investor interest in rapid, unsustainable growth wanes, the emphasis has shifted towards efficiency and sustainable business practices.
I was reading this interesting article on ScaleXP from their CEO Suezann Holmes and it got me thinking about how this changing environment in the B2B SaaS space is going to impact marketing. I have personally been in rooms where the business hasn’t done well however, ironically marketing seems to be painting a picture of success.
As someone who has been in this area for over 15 years, the ways I have approached marketing and determined the programs’ efficacy has evolved. 2025 and our current economic ecosystem demands another such pivot.
The Evolution of Marketing in a Changing Economy
Traditionally metrics like ad impressions, click-through rates (CTR), ad rank, number of MQLs, email open rates, and their conversion rates down the funnel have been monitored closely to help assess the effectiveness of marketing and the overall demand generation efforts. While these are still relevant in tracking performance they may no longer help measure marketing’s success as they don’t directly correlate with the health of the business.
As brands compete fiercely to capture consumer attention, marketing needs to adopt a more revenue-focused approach and ensure every marketing dollar spent works towards driving growth. This new reality necessitates a deeper understanding of which metrics truly matter and how to build a marketing funnel.
Why Traditional Marketing Metrics Fall Short
For years, marketing has been monitoring site traffic, volume of leads, and engagement across various channels (PPC, Social, Email etc). But while these numbers provide insights into how well a campaign is performing, they often fail to tell the full story as most times campaign performance measurement fails to roll up to the growth goals set by the organization. Therefore, there is a need to shift the focus from the micros and review performance across the whole set of marketing initiatives and take a bird’s eye view of marketing performance.
Similarly, focusing on the number of MQLs without considering their quality or how they move through the sales funnel can create a false sense of success. I have personally seen businesses working through hundreds of MQLs that marketing generates based on form fill data, content syndication or other acquisition channels but none of those actually converted to the sales qualified lifecycle stage despite all kinds of outbound and nurturing efforts.
Part of this is due to how prospects are buying today – self-service. Buyers have enough information online to get the answers they need. Form fills are declining and only after prospects find their way to solutions they really think can address their pain points, do they care to fill out a contact us form. That form fill, a hand raiser, is what must be defined as a Marketing Qualified Lead (MQL) after adding on the qualification layer of Ideal Customer Profile (ICP) fit.
Shifting to Revenue-Focused Marketing Metrics
So, what should businesses be focusing on instead? The answer lies in metrics that tie directly to revenue. Customer Acquisition Cost (CAC), for instance, is a critical metric that helps businesses understand how much they’re spending to acquire each new customer, including marketing and sales spend.
At a client we were recently working with, we found that marketing had been reporting excellent growth in the number of Qualified Leads that were brought into the funnel through a few very successful campaigns. However, only a small portion of those converted into SQLs (Sales Qualified) because the leads were higher up in the funnel and while being early is not necessarily a bad thing, the sales cycles tend to be longer for such higher funnel stage leads, there is often a lot of junk or there was ICP mismatch.
We dug deeper and also uncovered that Cost per MQL increased by over 67% and this metric was not even reported on and something that significantly increased the overall CAC. Here’s why this matters: when your MQLs don’t convert into SQLs, you’re essentially paying more for leads that aren’t contributing to revenue. This inefficiency inflates your CAC because you’re spending heavily on generating leads without seeing a proportional increase in paying customers. ToF PPC campaigns are often an area where we discovered such inefficiencies.
I won’t be surprised if you are reading this, and find yourself in a similar situation as a marketing leader or a business owner. I can assure you that you aren’t alone.
The pitfall of monitoring MQLs and keeping that as a sole metric for marketing performance must be revisited as it could be a costly mistake. As CFOs and CEOs tighten marketing budgets, improving the overall demand generation program that focuses on sustainable growth is a key step towards making this revenue-focused shift.
Embracing a Revenue-Focused Future
As marketing budgets come under increased scrutiny, focusing on metrics that directly tie to revenue—such as Customer Acquisition Cost (CAC), Customer Lifetime Value (CLTV), Return on Marketing Spend (ROMS) and Marketing Contribution to Opportunity Pipeline — are essential metrics that can help your business drive sustainable growth. I will talk more about each of these metrics in my next blog and also provide you with actionable steps that will help you transition to revenue focused marketing.
Feel free to reach out to me here in case you are looking to consult or would like to learn how DemandFlow can help your business.
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