During the past 20 years as CEO of the company I co-founded, we pivoted several times and successfully navigated two of the worst downturns in recent memory, in the process becoming a sustainable, high-growth business.
I'm often asked what contributed most to that long-term success. There are many factors, of course, but my answer is always the same: We became a viable business when we stopped looking at Marketing as a "nice to have" team and started looking at it as a business department that impacts our bottom line.
Though I had previously thought of Marketing as a softer function—one that made materials look slick—our business was transformed when we converted our marketing team from a cost-center to a revenue driver. We did that through a range of measures, including conducting quarterly business reviews and ensuring we hit our goals for marketing metrics that actually impact our revenue and bottom line.
As we were changing the focus and goals of our marketing team, one of the struggles we found early on was determining which metrics truly matter to our business and produce the highest ROI.
CMOs and CEOs looking to supercharge company growth need to start measuring marketing by the metrics that will matter most to the business's bottom line. Start with these.
This one may seem obvious, but you'd be surprised how many marketers get it wrong. In fact, many get it wrong on purpose—to improve their numbers.
If you're undergoing a marketing team transformation, you should take the time to sit down together with your salespeople and attempt to understand which leads really are moving the needle for them, and why.
With the help of your sales colleagues, you should create a narrower description of a Sales qualified lead (SQL) so your marketing team can focus on the right prospects and segments of the industry to go after. For example, if your business sells to VP-level roles primarily, and rarely closes a deal with those at the managerial level, an SQL should include only those at VP-level or higher.
Yes, your pipeline will inevitably decline when you make that change. But if you have an honest conversation with your company leadership about how this new description will help you engage the right prospects and produce more ROI, they'll understand the dip and come on board with your long-term approach to pipeline.
Similarly, marketers should have a firm grasp of which touchpoints are working for their business.
Sure, if certain platforms, like LinkedIn and Google Ads, are most effective at converting customers, that's where more of your budget should go. But, beyond that, marketers should understand the "digital body language" of your customers: What are the actions or touchpoints that indicate a prospect will become a customer? What indications show that you're about to lose them?
You should know the most important indicators—both good and bad—that your prospects give you. Then, you should engage accordingly, based on those signals.
Of course, there may be some campaigns you need to run from a brand standpoint, no matter what the attribution looks like. But you should have a clear idea of the initiatives that are driving the most dollars to your organization.
That doesn't mean you shouldn't experiment with new marketing tactics, but those tactics should be informed by and guided by past successes and the digital body language indicators.
Churn and Customer Lifetime Value
These two are separate metrics, but they're so interwoven that marketers shouldn't think of one without the other. Customer lifetime value is the net profit you can expect from acquiring a new customer—a number that increases whenever you reduce churn.
Fully 70% of companies say it's easier to retain a customer than to acquire a new one. But many marketers aren't necessarily thinking about marketing to existing customers; they're too focused on trying to acquire new ones and increase their pipeline. That's a noble cause, but it might not be the most efficient way to gain true ROI on your marketing.
To attempt maximizing your ROI, read the digital body language of your existing customers to understand which ones are most likely to churn or which could be open to upselling.
As you transform your marketing metrics, come up with a way to measure retention and upselling. You may need to pull statistics to show your executive team how valuable retaining customers is, and why you should market not just to prospects but to existing customers as well.
Looking at impressions, website visitors, and reach is no longer enough for marketers. Heck, I don't even care how many views you get on a video.
Smartphones and the "always on" culture have changed things for marketers in key ways. It's easier to get clicks than ever before, but it's also harder to keep viewers engaged. CNBC reported that ads have just 5-6 seconds to keep Millennials engaged. One way to combat shrinking attention spans is to tailor your content on a personal level. McKinsey found that "personalization can deliver 5-8 times the ROI on marketing spend, and lift sales 10% or more." Now that's a metric we can all get behind.
Whether it's using personalized email campaigns, recommending relevant products or solutions, or engaging through chatbots, companies need to focus on how to engage with customers in a personalized fashion. And that approach will only become more important as Millennials and members of Generation Z join the workforce and make more purchase decisions.
* * *
Clearly, all these metrics help marketers stand out not just as the people who make things look pretty but as the ones who drive tangible value to their organization—and that makes marketers indispensable to any fast-growing business.
Continue reading "The Marketing Metrics That Matter to the Bottom Line" ... Read the full article
Subscribe today...it's free!
MarketingProfs provides thousands of marketing resources, entirely free!
Simply subscribe to our newsletter and get instant access to how-to articles, guides, webinars and more for nada, nothing, zip, zilch, on the house...delivered right to your inbox! MarketingProfs is the largest marketing community in the world, and we are here to help you be a better marketer.
You may like these other MarketingProfs articles related to Metrics & Measurement:
- The Biggest Benefits of Marketing Revenue Attribution
- Advanced Measurement Strategies: Metrics That Actually Matter
- The ROI Dilemma Marketers Face With Programmatic Advertising
- The Silver Lining to the Death of the Cookie: Better Measurement
- Six Key Metrics for Measuring Online Event Success [Infographic]