6 Marketing Metrics Your Boss Cares About
May 16, 2019
Marketers work tirelessly to move the needle on what often seems like a (never-ending) laundry list of metrics. We look at website visits, conversion rates, generated leads per channel, engagement on social media platforms, blog post shares, email click-through rates… you name it, we track it.
So, when the time comes to present the impact of your marketing efforts to your boss, what’s the best way to leverage all that glorious data to prove the value of your hard work?
Drill down, cut out the fluff and make the most of your next face-to-face; here are six marketing metrics that your boss actually cares about.
- Customer Acquisition Cost (CAC): This metric determines the total average cost your company spends to acquire a new customer. CAC takes total sales and marketing spend for a specific time period and divides it by the number of new customers in the same period. It illustrates how much your company is spending per new customer acquired. You want a low average CAC. An increase in CAC means that you are spending comparatively more for each new customer, which can imply there’s a problem with your sales or marketing efficiency.
- Marketing Percentage of Customer Acquisitions Cost: This metric is the marketing portion of your total CAC, calculated as a percentage of the overall CAC. To find it, take all marketing costs, and divide by the total sales and marketing costs used to compute CAC. This demonstrates how your marketing team’s performance and spending impact your overall CAC.
- Ratio of Customer Lifetime Value to CAC (LTV:CAC): This number helps estimate the total value that your company derives from each customer compared with what you spend to acquire that new customer. First, determine the LTV by subtracting gross margin from the revenue paid by a customer in a period, and divide by the estimated churn percentage for the customer. From there, the final metric is the LTV to the CAC ratio. A higher number represents a higher return on investment. Spending more on sales and marketing will reduce the ration, but could help speed up overall business growth.
- Time to Payback CAC: Determining the number of months it takes to earn back CAC is found by dividing CAC by the margin-adjusted revenue per month of the average new customer. The less time it takes to pay the CAC back, the sooner money is made from new customers. Generally, most businesses aim to make each new customer profitable in less than a year.
- Marketing Originated Customer Percentage: This ratio shows new business driven by marketing efforts. It’s calculated by dividing the number of new customers that started as a marketing lead by total new customers in a month. This metric illustrates the impact that lead generation efforts have on acquiring new customers.
- Marketing Influenced Customer Percentage: This metric divides the number of new customers that marketing engaged with during the lead process by the total number of new customers. The result illustrates the impact marketing has on a lead during their entire buying life cycle.
Assessing data is paramount to understanding what’s working and what needs refinement. But because there is so much to sift through, it’s easy to lose sight of what’s most important. Share your results in a way that your C-suite can get excited about.
When you present metrics that resonate with your decision-makers, you’ll be in a much better position to make the case for budgets and strategies that will benefit your marketing team now and in the future.