Essential marketing KPIs to assist your business recovery
What is the best way to prove the worth of your marketing staff?
For marketers, this can be a persistent challenge. After all, much of what they do involves playing a long game. Articles, tweets, ads and emails they send one week might connect to a purchasing decision several months later – and this connection can be difficult to prove or demonstrate.
Another common challenge is persuading senior leaders that marketing activity is valid and important especially when the business is in recovery mode.
“Marketers can live too much in their creative, digital, and social media bubble, focusing on parameters such as likes, tweets, or followers – parameters that are judged by CEOs as ‘interesting but not critical’.”
– Jerome Fontaine – Global CEO of The Fournaise Marketing Group
Luckily, there are plenty of ways to impress C-suite executives and senior leaders that their investment in marketing is paying off. It’s very difficult to argue with numbers that demonstrate effectiveness.
In this article we look at 5 powerful metrics that you can use to get the CEO’s attention, prove your teams value, and remind all stakeholders of the central role that marketing plays in driving growth, building the brand, and retaining customers.
There are many metrics that can be useful to paint a picture of marketing performance and effectiveness. Aim to choose metrics that are relevant to your industry, meaningful for your business, and measurable for your teams. If the following metrics do not make sense for your marketing team, choose metrics that are relevant and meaningful.
In this article we explore these 5 metrics:
- Marketing Qualified Leads / Sales Accepted Lead
- Return On Ad Spend
- Customer Lifetime Value
- Revenue Impact
- Perceived Value / Brand Recognition
Marketing Qualified Leads / Sales Accepted Lead
These two metrics are slightly different ways of quantifying the same achievement. Both focus on the ability of the marketing team to find potential customers and prepare them to buy. The key difference between the two is that Marketing Qualified Leads may seem like prime prospects when they first appear, but may become less promising when the sales team picks up the baton. This can create a significant discrepancy between MQLs and actual sales, which can reflect badly on the sales team. For this reason, it may be preferable to use the more stringent metric of Sales Accepted Leads (SAL) to demonstrate to senior executives that your marketing efforts are attracting high quality prospects that lead directly to sales.
For businesses that don’t use sales people, such as ecommerce brands, new customer acquisition might be a more meaningful way to track performance.
Return On Ad Spend (ROAS)
How effective is your advertising spend? This metric helps to demonstrate that your wise choices in terms of creative, media spend and scheduling is effective, while also connecting the budget to the increased revenue it generates.
While ROAS is typically calculated by comparing your ad spend with the value of conversions it generates, you might also consider looking at the lifetime value of the new customers you acquire.
Customer Lifetime Value (CLV)
Your CLV calculation takes into account average customer spend, average order frequency, and how long you typically retain customers. This gives you a single figure that shows how much a single customer will spend with your business during the period they remain a customer.
This metric is interesting on two levels. Firstly, it helps to quantify the average value of a new customer. This helps to frame conversations about your marketing budgets, activities, and performance.
Secondly, CLV helps to track your effectiveness at retaining customers. Over time, your CLV should increase as you get better at retaining customers for longer. This customer retention or customer marketing activity is one of the main starting points during business recovery. Given the incredible value of retaining customers, senior leaders must respect and value the marketing activity.
Revenue Impact
Your marketing team is working hard to raise brand awareness, identify leads and convert customers. But what is the impact of all this effort? What is the impact on revenue?
Creating a formula for calculating revenue impact is a powerful way to demonstrate the importance of marketing. How much business revenue can be tied back to marketing activity?
Perceived Value / Brand Recognition
These kinds of metrics, which help to quantify how well your marketing activity is raising awareness of your brand, and shaping perceptions of your business post pandemic, can be problematic in the sense that CEOs and senior leaders may prefer the KPIs that have a clear link to revenue or profit.
However, there is clear value in a brand that is trusted, liked, and valued by customers and prospects. These factors can increase the value of your business while also making future customers easier to win. Not to mention the fact that if your business is making all the noise, your competitors may struggle to be heard.
With this in mind, you may want to include a metric like share of voice, customer sentiment, or net promoter score, to help track the perception of your brand over time.
Other useful marketing metrics
There are many different ways to measure your marketing performance and success, including:
- Conversion rate
- Click through rate
- Cost per click
- Customer acquisition cost
- Lead pipeline (forecast conversions)
Watch: Marissa increased website performance by 80%
Next steps
Perhaps the most obvious first step is to reflect on your current reporting and consider whether there are any other KPIs that might be more interesting to your senior leaders. Are there any other measures you can use to convince or persuade your colleagues? Or any new ways to define the connections between your marketing activity and your revenue? All valuable considerations when recovering from major impacts on the business.
If your business needs fresh talent to help you measure performance, achieve your marketing goals, or open up new channels, Tate can help. As specialist recruiters with a long track record in marketing, we can help you find talent with the right mix of skills and experience to prepare for tomorrow.
