Digital marketing departments don't always get the credit that they are due. While the internet has made it easier to measure how well marketing is working for a business, it is still quite difficult to prove how valuable marketing is to the company overall. It can be especially hard to show marketing's worth to the CEO, board members and other executives. Using marketing metrics is a good way to show how useful marketing is. Metrics can also show exactly how much of the company's sales are due to the marketing department.
CEOs are taking more of an interest in marketing than ever before. They want to track the marketing department's progress and see how successful it is. It can be difficult to know what metrics the CEO and other top executives want to see. Choosing the best marketing metrics can be a challenging task. It is important to show how valuable the marketing department is, but it is also important to give accurate reports and data. It is vital that the CEO, CFO and board members be presented with information that is relevant to them.
Most people in charge just want to know how much things cost. They also want to know what the results were from previous efforts and expense. Top Marketing Metrics include how much marketing costs. This includes every cost related to the marketing department, including how much marketing employees are paid, general operating expenses and how much each marketing project costs. Some metrics are useful for deciding how to proceed with marketing projects and strategies. These include cost per page, cost per follower and cost per lead. This type of metric, however, might not be the best Marketing metrics for your CEO and other top executives.
The Most important marketing metrics will demonstrate how valuable the marketing department is to the success of the company. They will also show how much money marketing brings in and how it influences the business as a whole. There are several metrics that are particularly helpful when speaking with a CEO or members of the board. Including these is a good way to get the attention of executives and ensure that they know marketing's value.
- Customer Acquisition Cost, or CAC, is the total cost of the marketing and sales teams divided by how many new clients were acquired in a given period of time. These costs include salaries for department employees, advertising money, operating expenses, commissions and more. A high cost means that a company is spending a lot on each customer.
- Marketing Qualified Leads (MQLs) vs goals is an important metric to monitor in case the marketing team has disappointing lead production. If a problem here is caught early, a team can look for new ways to find leads before they fall too far behind projections.
- Time to payback customer acquisition cost is how long is takes the company, in months, to recover the cost of attracting customers. This is less important for businesses where customers pay only once, particularly in advance. If clients have yearly or monthly fees, the time to payback should be less than a year. That means the company begins to earn money and profit from a new client within a year.
- Marketing percentage of CAC is how much of the customer acquisition cost goes toward marketing. If it goes up, sales might be low or too much might be spent on marketing. However, spending more on marketing and finding better leads can raise sales. For this reason, it is important to know the context and approach of marketing and sales strategies before deciding the if marketing percentage is too high.
- Leads over time is easy to track and analyze. A company should have more leads during each consecutive period. If leads go down, there could be problems with sales or marketing.
- Ratio of customer lifetime value (CLV) to CAC is only used for businesses where customers continue to pay fees or purchase goods. It compares the customer acquisition cost to how valuable a customer is currently. The ratio should usually be higher than three. If the ratio is too high, however, it means the company isn't growing fast enough. More money should then be spent on marketing or sales.
- Marketing originated customer percentage demonstrates how much business the marketing department brings in. It can also be shown with revenue instead of individual customers. Marketing influenced customer percentage includes any customer that marketing influenced.
It can be challenging to show how valuable marketing is to a company. Higher-level executives and board members are very concerned with how much things cost. They want to see that efforts and expenses pay off in the long run. Using the right metrics when presenting to CEOs and other executives can show marketing's full value to the company.