Over 40% – 50% qualified marketers have no idea of what a 10% increase in budget could do for their companies. If you belong to the group of 40% – 50% then you will have difficulties protecting your budget rather you might end up asking yourself this question ‘’what is going to happen now since my budget has been cut down by 10%?’’ You won’t expect an organization to place a great value on something that is unquantifiable.
This guide will help you answer key questions bothering your mind like:
- What are the most important marketing metrics that I need to use?
- How do I measure my different marketing programs impact on revenue and profit?
- What is the best way I can communicate marketing results with my executives, teams and board of directors?
And lots more …
Marketing is known to suffer from a crisis of credibility. Typically, most often times executive outside the marketing department perceive or believe that marketing only exist to support sales and it does not command the respect it deserves.
What can you do as a marketer to be a driving engine to drive in revenues and profits? How can you take charge over the revenue processes and organizational peers and earn respect among the decision makers of your organization.
Using the right metrics that really matters to the CEOs and CMOs. It is no few facts that companies CEOs and board of directors don’t really care about the crowd you pull during your last campaign they are more concern on the revenues and profits.
- The rate of growth of growth now versus last quarter (Last Year)?
- The profit made last quarter versus this quarter
- The forecasted revenue and profit for next quarter
Why do we need marketing metrics now?
The way prospects nowadays conduct research and buy solutions has experience a great transformation by availability of rich and abundant information in websites and social networks and this in turn as called for a change in the way marketing and sales teams must work because the buying public already has access to information. This has presented a much needed opportunities for market to reposition itself as a core part of the company’s revenue engine.
I will be discussing with you some useful marketing metrics and marketing analytics
Establishing goals/ROI estimate upfront
When making plans for any marketing investment your first step is to quantify your expected outcomes. May at times marketers plan a program and commit huge budget without establishing a target or expectation and the impact they expect from the program.
The ultimate solution is to set aside a targeted goal, benchmarks and Key Performance Indicators (KPI’s) for each marketing programs. You firstly have to define your program big objectives and pick measurable metrics to support these goals. With ROI goals in place, the CFO’s, CEO’s will see the exact cost been invested and what it is been used for.
Revenue Cycle Analytics
The most important metric that builds marketing credibility are the metric that shows marketing aggregates impact on revenue.
Some old fashioned marketers would argue that marketing is not responsible for revenue I totally disagree. In the evolving world, online and social marketing is responsible for 70 of the entire buying process. This means marketing and sales team has to rethink and generate revenue. This measurement process is called ‘’revenue cycle analytics’’. The first stage is to define the stages of revenue cycle starting from the prospects awareness and moving through the marketing process to the close of the deal.
A best practice revenue stage model is based on three main fundamental principles.
- 1. Sales resources are relatively expensive
To provide the largest value, sales should not be engaged with the prospects until prospects are ready with sales.
- 2. No lead left behind
Do not let potential customers end up been lost along the line, ensure regular flow of lead forward or they are recycled back to marketing.
- 3. Make sure all leads are not static
Sometimes leads seems ready and they are not actually ready, make sure no lead is static along the process. Any lead not ready should be recycled back to marketing.
Identify the impact of each marketing investment
Single Attribution (First touch/Last touch)
The most common methodology used for tracking the result of marketing program is to assign all value to the first(or last) program implemented that touched the deal or sealed the deal.
Program specific metrics- what you do to measure and track
The CMO’s should be using methods like attributing and marketing mix modelling to determine the effectiveness and contribution. Campaign and program specific metric should never be ignored. Although it is less important to the CEO’s, these will be early indicator changes, and it will help track the growth so that program manager can ensure proper campaign mix. I will list some few metric that you might want to track on a regular basis and which is organised by program type.
- Unsubscribe rate
- Bounce rate
- Open rate
- Click- through rate
- Views/ Visitors
- Unique views
- Back links
- Unique Visitors
- Social share
Forecast Results, and not just spending the resources
Any CMO’s making a marketing forecast should be careful and rigid about the difference between Commit, Target and Forecast.
- Commit: This is the actual number that the CMO’s can actually guarantee and should not vary frequently; this number is used as a basis for CMO’s quota and bonus.
- Target: This is a number higher than commit which reflects what marketing teams should be aiming for. The goal of each groups or teams should be aimed on meeting the overall target and not commit.
- Forecast: This is the CMO’s best estimate for what might happen and it should be based on recent estimates and adjustment made.
A good and accurate forecast matters because impress the CEO and the board of directors, and if the marketing teams can project and accurate forecast and deliver on it they create a good reputation for themselves within the organization.
Having extensively discussed and highlighted some useful and key guides to marketing metric and marketing analytics, I bet we would introduce and start implementing this in your own marketing team and start experiencing some drastic positive changes.
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