As CEO, you need to know what’s going on in your company. Your daily decisions depend on it. But let’s face it - your marketing efficacy isn’t always easy to see. Marketing ROI isn’t generally as accessible as your sales numbers, and marketing analytics tend to add confusion rather than clarity.
Between the complex measurements and overwhelming amount of metrics to measure, it’s no wonder that 75% of executives think that marketers aren’t focused on results.
So how can savvy CEOs or presidents tune into what’s happening in their company’s marketing departments? Let’s dive into the world of marketing reports—the important marketing reports, the ones that you don’t need, and how quality reporting can drive results.
Why you should keep an eye on progress
You’re busy leading a company, which is why you hired someone to handle your marketing. But as captain of your ship, it’s crucial to know what’s going on at every level. There are several marketing metrics every executive should master to ensure that they're equipped to make decisions in the best interest of the company and the bottom line.
After all, you want your marketing budget to generate results. Seeing the big picture of cash spent to incoming revenue and ROI is crucial when it comes to allocating your marketing budget wisely.
Priorities, reports, and metrics
In business, numbers matter. That being said, knowing your key performance indicators (KPIs) in marketing, the incoming numbers, and how to calculate them will equip you to understand your progress and direct your teams accordingly.
But before you get bogged down by the different types of marketing reports and metrics, know this: not all marketing reports are created equal. All are important, but not every one will give you the snapshot you need to determine whether or not your company is on track. Knowing the best marketing reports that will give you a quick overview of your marketing performance is helpful in blocking out any noise that might distract you from your goals.
That said, priorities, reports, and metrics will vary dependent on your company’s marketing goals.
With the responsibility of your company’s success on your plate, you can’t spend the day sorting through myriads of reports that don’t really tell you anything valuable about how you’re meeting your bottom line. The marketing reports you should be consuming regularly should give you the best picture of your ROI and costs. Marketing reports for executives should be clear, and filled with need-to-know information pertaining to how well your marketing plan aligns with long- and short-term goals.
Marketing reports that matter
Tap into these marketing reports and marketing KPIs to ensure that your teams and strategies are driving your business towards excellence.
Customer acquisition cost (CAC)
How much is each new customer costing your company? Knowing this can help you determine where you might need to tweak things. Keep in mind, though, that your marketing budget includes more than just ad spend and the cost of content marketing. It’s also split amongst salaries, commissions, and leading customers through the funnel—to name a few. To determine your CAC, add up your total marketing cost and divide it by how many new customers you’ve acquired within a specific time frame—this might be by month, quarter, or year. The result is your cost of acquiring that new customer.
Sales and marketing cost / Number of new customers
Marketing percentage of CAC
Marketing percentage of CAC shows how your cost of acquiring a customer is related to your marketing costs. Monitoring this number over time gives a good overview of how your strategy is performing. If your numbers are too high or have recently increased, it can indicate that you’re overspending on marketing, sales quotas aren’t being met, or that your marketing team is trying to make up for low sales by spending more for better leads. Whatever the case may be, it’s an opportunity to retarget your audience or restrategize your approach, and evaluate how you can redistribute your budget across sales and marketing to maximize results.
Marketing cost / Sales and marketing cost
Marketing originated customer percent
This report will give you a quick look at what percentage of your new customers come from your company’s marketing efforts. This metric is crucial to help you understand the efficacy of the strategy and the justification of costs. Tally up your new customers within a given period and calculate the percentage that came from a marketing-generated lead.
Marketing originated customer percent =
New customers via marketing / New customers
Customer lifetime value : Customer acquisition cost (LTV:CAC)
The ideal situation for any business is that their new customer will be an ongoing and loyal repeat customer. But to determine if your spend to acquire this customer is justified, you need to know how much they’re spending on your business versus how much you’ve spent on them. Calculate a customer’s spend within a given period, like a year, and compare it to your CAC. The higher the ratio is, the more profitable your business. Alternatively, a low ratio may indicate that your sales team is underperforming, or that it’s time to reevaluate and trim your CAC costs.
LTV : CAC =
LTV / CAC
Sales qualified leads (SQL)
Marketing isn’t the little sister of sales. For marketing to succeed, CEOs need to ditch the old ideas of marketing as a sales support role, and get them to work hand in hand. While sales numbers are often precise and clear-cut, marketing efforts can be a bit more difficult to quantify.
Your sales and marketing teams should be working together to determine and align their goals. By clearly defining what makes an MQL (marketing qualified lead) and an SQL, your teams can enhance their ability to produce and lead more closeable, top-tier leads through the funnel. More sales qualified leads are a solid indicator that your marketing strategy is effective.
Average lead close rate
Once a marketing qualified lead is handed off to your sales team as a sales qualified lead, what is your sales team’s lead close rate? Again, this is a great indicator of the efficacy of your marketing strategy.
But be advised that low close rates don’t always mean your marketing team is providing bad leads. Sometimes it indicates that your teams may need to revisit and redefine what an SQL is. Also, both teams should develop a handoff agreement for lead transition. If these numbers continue to waver in the face of solid definitions and agreements, your sales team may simply be underperforming, or yes, your marketing team may need to adjust its strategy. Pay attention to these metrics to fine-tune your performance and lead closure rates.
Staying on top of marketing reports that matter is crucial to your company’s bottom line. While the CEO typically doesn't have a direct hand in marketing strategies and execution, having an informed view of the metrics will enable you to direct your marketing team in the best way possible, to ensure that your marketing spend is bringing in the highest returns.