Today senior executives are more fluent in analytics and spreadsheets than ever before. Not only do they understand the marketing metrics behind the output of your marketing magic, but they want regular reporting on their return on investment. So, how do you determine which analytics are the most valuable to share with your C-level staff?
To help you choose what marketing metrics to report to your senior management team, we have compiled a table that includes many of the terms and calculations of marketing metrics. Use this as a tool to gain further credibility and clearly illustrate marketing’s contribution to the bottom line.
|Customer Acquisition Cost (CAC)
|Total marketing and sales costs divided by number of new customers acquired in a determined time period.
|Understand how much you are investing to acquire each customer.
|Marketing Percentage of Customer Acquisition Cost (M% of CAC)
|Costs for marketing divided by the total sales and marketing costs used to compute CAC.
|Used to determine what percent of your investment is coming from your marketing budget.
|Lifetime Value to CAC (LTV:CAC)
|Annual payment from customer, subtract gross margin, divide by cancellation rate. Then divide LTV by CAC for the ratio.
|A high LTV:CAC indicates better ROI on marketing and sales activities.
|Time to Payback CAC
|Divide CAC by monthly income from customers (average).
|Determine how long it takes to recoup dollars spent to acquire the customer (via new revenue generated from them).
|Marketing Originated Customer %
|Total number of new business deals driven specifically by a lead generated by marketing, divided by total new business deals.
|How much new business is acquired by marketing activities (specifically lead generation campaigns).
|Marketing Influenced Customer %
|Total number of new business deals that specifically interacted with a marketing activity, divided by total new business deals.
|How much new business is acquired by marketing activities (specifically campaigns that involved some sort of interaction).
Today, more than ever, senior executives are interested in understanding the ROI on their marketing dollar investment. Make sure you are armed with specific data and metrics that will illustrate the value and ensure the credibility of your marketing programs.
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