Three marketing metrics that will make you a hero to your CEO.
- 11 Mar
All marketers want their organisation, or their clients, to see value in what they do – which makes it critical to be able to quantify their contribution in terms that matter the most to decision-makers at the top of the tree. Measurement builds respect and accountability.
However, as marketers, we know this can be easier said than done. According to a recent study of 478 senior marketers worldwide by The Economist Intelligence Unit, only 21 per cent said they could measure marketing in terms of revenue.
The same study also asked marketers to list the biggest challenges they faced. Result: budget (45 per cent), the shift to digital and engagement (26 per cent) and measurement of marketing (21 per cent).
The advent of online and social media – and the resulting transformation in the way customers now buy their goods through a proliferation of channels – has meant that marketing is now responsible for much more of the revenue cycle than ever before (up to 70 per cent, according to Marketo). In theory, this should represent a golden opportunity for marketing to reinvent itself as an essential part of a company’s revenue generating capability.
However, in order to provide proof that it is central to a company’s success, marketing still has to be able to quantify its impact in terms of revenue – the only yardstick that will impress the CEO and the rest of the Board. But, as we have seen, this is not always easy to demonstrate.
In the past, marketing has been quite good at generating metrics that major on activity and, in some cases, efficiency. Metrics for brand awareness and cost metrics – which measure things like cost per sale, cost per acquisition etc. – are relatively commonplace. The same can be said of measuring the number of leads, followers and ‘likes’. The trouble is, they all measure quantity not quality, and not the revenue that contributes directly to the bottom line.
In fact, cost metrics have the disadvantage that they can actually show marketing as a cost centre rather than one that generates income. To the cost-conscious Finance Director, this is often all the evidence he or she needs to justify trimming back the marketing budget rather than increasing it.
So, what are the metrics that marketers should be showing to the CEO and his boardroom colleagues? The answer, of course, is financial metrics; i.e. anything that talks in the language of revenue, margins, profits, cash flow, ROI (Return on Investment) and shareholder value. Ultimately, they want to see statistics that show how to improve company performance and profitability.
These may be summarised as:
- Revenue metrics – marketing’s impact on revenue.
- Marketing programme performance metrics – incremental contribution of each individual programme.
- Profit per customer – LTV of an incremental customer.
The argument over justifying marketing budgets is not new, but is arguably more important than ever in today’s competitive market place. The measures are there for the marketers who are prepared to adapt and, if it requires a new take on statistics and marketing analytics tools, so be it.
If you'd like to find out how to create and manage a dashboard of leading and lagging indicators of sales and marketing performance for your business, please contact us.
- 23 Jul
SharpSpring recently announced the launch of their Visual Workflow builder. The new feature intends to make the process for creating workflows easier and brings it in line with the likes of Pardot...
- 17 Jul
Malcolm Gladwell, in his book Blink, argues that the lengthy procrastination that often takes place in decision-making is ‘post self-justification’, because we actually make up our minds pretty...
- 23 Jun
A news article came out through the Bangkok Post (we found it through The Verge) last week about the arrest of three Chinese nationals. The trio had been paid over £10,000 a month to run a...
- 17 May
Financial services marketing agency, The Marketing Eye, has appointed Jason Dilworth to the new role of Technical Director in a move designed to expand and develop the company’s data-driven...
- 24 Apr
For an industry whose origins and continuing existence rely heavily on the accurate analysis of statistics, the insurance sector would do well to note the seismic shift taking place in modern...
- 19 Apr
Asking someone to buy your product or sign up to your service after only one mail-shot or email is unrealistic. We can’t expect that one email, no matter how carefully crafted, will be enough to...
- 24 Mar
So, your business has splashed out on a big, beautiful high quality piece of video content, you are going to want to stretch it as far as it will go, right? Then don’t do what everyone else does...
- 23 Feb
With around one-fifth of the world’s population on Facebook, you would think generating brand awareness and leads from it would be a piece of cake. The reality is less straight forward. With a...
- 14 Feb
Marketing automation systems are powerful, intelligent and the bedrock of many businesses' marketing strategies, but getting to learn and understand them takes time and dedication. Not becoming...
- 08 Feb
If you look for evidence of the potential benefits to B2B organisations of social media, you will see both lead generation, as well as brand reinforcement are being addressed to great advantage....