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January 4, 2023

How to Select KPIs Using Backwards Planning

Key performance indicators (KPIs) are an essential tool for marketing and revenue leaders. They help to track progress toward specific goals, inform decision-making, and allocate resources effectively. But with so many different KPIs to choose from, how do you know which ones are the most important for your business? One effective approach is to use backwards planning.

4 Steps to Backwards Planning for B2B Organizations

Backwards planning, also known as "backward planning" or "backward design," is a process for designing a lesson, unit, or course of study by starting with the desired outcomes and working backwards to determine the necessary steps to achieve those goals. This approach can also be used to select KPIs that are well-aligned with your business objectives and that will help you track progress toward achieving those objectives.

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Here are the steps for using backwards planning to select KPIs for your B2B organization:

Step 1: Define your overall business goals and desired outcomes

The first step in backwards planning is to define your overall business objectives and the specific outcomes you want to achieve. These might include goals related to sales, revenue, customer satisfaction, or any other metric that is important to your business. Consider what success looks like for your organization in the short and long term. This will help you to determine the KPIs that are most important for your business.

Step 2: Determine the key contributing factors

Next, you'll need to identify the key processes and activities that drive sales and revenue in your organization. These might include things like lead generation, customer acquisition, and upselling. Once you have identified these processes and activities, you'll need to identify the key drivers of performance in these areas. This might include things like conversion rates, customer lifetime value, or average order value.

Download our Sales Activity Planning Template to be sure you are on track to  crush your monthly and yearly revenue goals. 

Step 3: Select KPIs that will help you measure progress

Consider the balance between lagging and leading indicators, and choose a mix of both. Make sure your KPIs are quantifiable and measurable so that you can track your progress over time.

Step 4: Implement and track your KPIs

With your KPIs selected, it's time to implement and track them. Set targets for your KPIs and track your progress over time. Use your KPIs to inform decision-making and adjust your strategies as needed. By regularly reviewing and analyzing your KPIs, you can identify areas of strength and areas for improvement, and make informed decisions about how to move your business forward.

Selecting KPIs for Marketing Teams

For marketing leaders, backwards planning can be a useful tool for selecting KPIs that are aligned with your business objectives and that will help you track your progress toward achieving those objectives. Marketing is a complex field with many different variables that can impact your success, so it's important to choose KPIs that will give you a clear and accurate picture of your performance.

Are your marketing efforts resulting in good-fit leads? Request an assessment  with one of our advisors to find out. 

Some key KPIs for marketing might include:

  • Lead generation: the number of leads you are generating through your marketing efforts. You can track this metric over time to see if your lead generation efforts are improving or declining.

  • Conversion rate: the percentage of leads that are converting into paying customers. A high conversion rate is a good sign that your marketing efforts are effective, while a low conversion rate may indicate that you need to adjust your strategies.

  • Customer acquisition cost: also known as CAC, the cost of acquiring a new customer. A low customer acquisition cost is a good sign that your marketing efforts are cost-effective, while a high customer acquisition cost may indicate that you need to find more efficient ways to acquire new customers.

  • Customer lifetime value: the value of a customer over the course of their relationship with your business. A high customer lifetime value is a good sign that your marketing efforts are creating long-term value for your business, while a low customer lifetime value may indicate that you need to focus on improving customer retention.

Examples of KPIs Based on Backwards Planning 

Example 1: A B2B software company

Objective: Increase sales and revenue

Step 1: Define your overall business objectives and desired outcomes

Step 2: Determine the key factors that will contribute to achieving your objectives

  • Lead generation
  • Conversion rate
  • Average order value

Step 3: Select KPIs that will help you measure progress toward your objectives

  • Number of leads generated per month
  • Lead conversion rate
  • Average order value
  • Total sales and revenue per month

Step 4: Implement and track your KPIs

  • Set targets for each KPI and track your progress over time
  • Use your KPIs to inform decision-making and adjust your strategies as needed

Download our Marketing Goals Calculator Template to find out just how many  contacts you need at each stage of the funnel.

Example 2: A B2C e-commerce company

Objective: Improve customer retention and loyalty

Step 1: Define your overall business objectives and desired outcomes

  • Increase customer retention rate by 10% over the next 12 months
  • Increase customer loyalty score by 15% over the next 12 months

Step 2: Determine the key factors that will contribute to achieving your objectives

  • Customer satisfaction
  • Customer experience
  • Product quality

Step 3: Select KPIs that will help you measure progress toward your objectives

  • Customer satisfaction score
  • Customer retention rate
  • Customer loyalty score
  • Net promoter score

Step 4: Implement and track your KPIs

  • Set targets for each KPI and track your progress over time
  • Use your KPIs to inform decision-making and adjust your strategies as needed

Request a demo of Customer Nudges to learn how to deliver tailored, data-driven  outreach to your customers.

Example 3: A non-profit organization

Objective: Increase fundraising and donor engagement

Step 1: Define your overall business objectives and desired outcomes

  • Increase fundraising by 25% over the next 12 months
  • Increase donor engagement by 20% over the next 12 months

Step 2: Determine the key factors that will contribute to achieving your objectives

  • Donor acquisition
  • Donor retention
  • Donor loyalty

Step 3: Select KPIs that will help you measure progress toward your objectives

  • Number of new donors per month
  • Donor retention rate
  • Donor loyalty score
  • Total fundraising per month

Step 4: Implement and track your KPIs

  • Set targets for each KPI and track your progress over time
  • Use your KPIs to inform decision-making and adjust your strategies as needed

The Takeaway

By using backwards planning to select your KPIs, you can ensure that your sales and revenue management efforts are well-aligned with your overall business objectives. This will help you to track your progress, make informed decisions, and allocate resources effectively. To learn more about how your tech stack can revolutionize the sales process and drive revenue growth, get your tech stack audited by our RevOps and HubSpot experts! 

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Zach West

Zach leads New Breed's demand generation program. His areas of focus include in-depth market research and modeling, customer journey design and optimization, strategic application of data-based insights, technical integrations and data flow design, and technical content support.

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