Most businesses these days drive lead generation and lead conversion by running multiple digital marketing campaigns. Digital marketing campaigns like social media ads and pay-per-click ads help enterprises to generate more leads in the short run by increasing traffic to their websites. At the same time, a business can generate more leads and increase conversion rate in the long run by running search engine optimization (SEO) and content marketing campaigns.
According to Amazon Advertising,
“Marketing metrics are a quantifiable way to track performance and are an important marketing measurement tool for gauging a campaign’s effectiveness.
The most appropriate marketing metrics vary greatly from one campaign to the next, but in general they measure the effects of your campaign on audience actions.”
The CEOs need to measure the performance of every digital marketing campaign as well as assess the impact of the campaign on preset business goals. They need to measure the performance of short-term and long-term marketing campaigns using different metrics. At the same time, they must use the right marketing metrics for CEOs to understand how a specific marketing campaign performs and what measures must be taken to boost the performance of the marketing campaign.
Identifying 9 of the Crucial Marketing Metrics for CEOs
1) Marketing Originated Customer Percentage
Every customer acquired by a business is not influenced by digital marketing campaigns. A CEO can measure the effectiveness of marketing campaigns only by knowing the percentage of customers acquired through lead generation activities. She can measure the important metric by dividing the number of customers acquired through lead generation campaigns by the total number of customers. Some CEOs replace the number of customers with the amount of revenue to measure the contribution of marketing campaigns more accurately.
2) Conversion Rates
This marketing metric helps a CEO to understand what percentage of website visitors convert into customers. But the way conversion rate is calculated vary across businesses and industries. For instance, an ecommerce business can calculate the conversion rate in terms of the percentage of customers who place orders. On the other hand, a lead generation business will calculate the marketing metric based on the number of website visitors who place an order or make an inquiry. Hence, the conversion rate will vary across ecommerce and lead generation businesses.
3) Cost per Lead per Channel
Every business these days connect with potential customers and generate leads through multiple communication channels. That is why; CEOs need to know the average customer acquisition cost across communication channels. The metrics help CEOs to identify the digital marketing campaigns or communication channels that generate more leads than others. Also, they can identify the channels that generate warm leads. Hence, CEOs can increase marketing ROI consistently by investing more in more impactful lead-generating channels.
4) Return on Ad Spend
Unlike return on investment (ROI), return on ad spend (ROAS) does not measure the profitability or efficiency of specific investments. Instead, this marketing metric helps CEOs to know the amount of revenue earned for the amount invested in marketing. A CEO can calculate the metric simply by dividing the sales revenue by the cost per sale. She can use ROAS to figure to ensure that the marketing and advertisement expenditures incurred by the business are delivering higher ROI in terms of revenue.
5) Traffic Channel Growth
A business these days divert traffic to its website from multiple channels – direct, organic, paid, referrals, email, and social media. The number of visitors diverted to the website from a specific channel varies from time to time. CEOs need to track if the number of website visitors from each of these core channels has been increasing or declining. This marketing metric helps CEOs to identify if certain marketing campaigns need to be optimized to drive the growth of low-growth channels.
6) Marketing Percentage of Customer Acquisition Cost (M%-CAC)
This marketing metric is calculated by expressing the marketing portion of the customer acquisition cost (M-CAC) in the form of a percentage. CEOs use the metric to compare sales and marketing expenditure using the overall customer acquisition cost (CAC) as the base. M%-CAC helps CEOs to know if the business is spending more on marketing campaigns than sales activities, marketing campaigns reduce overall sales costs by generating warmer leads, and the sales team is converting leads into customers efficiently.
7) Customer Lifetime Value
Customer lifetime value (CLV) complements another important marketing metric for CEOs – customer acquisition cost. The lifetime value of individual customers differs. Also, the customer lifetime value differs across businesses and industries. But the marketing metric is calculated simply by calculating three figures – average order value, number of orders in a year, and the average retention time in a year. CEOs can sustain profitable business growth only by increasing customer lifetime value consistently. Many organizations these days increase CLV by implementing customer retention programs.
8) Website’s Search Visibility
As highlighted by several studies, the average click-through rate (CTR) declines as the position or ranking of a website decrease on search engine results pages (SERPs). As a long-term and organic digital marketing strategy, search engine optimization (SEO) helps businesses to increase conversion rates and reduce customer acquisition costs. But a CEO can measure the performance of SEO campaigns only based on the website’s search engine ranking. Most CEOs monitor the performance of the website by checking its search engine ranking regularly.
9) Perceived value
In addition to driving sales conversion, customer referral helps businesses to reduce customer acquisition costs. CEOs can use perceived value as a key marketing metric to know if existing customers will promote or recommend the business to their friends, family, and coworker spontaneously. Also, they can know what measures must be implemented to boost customer satisfaction and get more customer referrals. CEOs can easily measure perceived value based on the widely used market research value – net promoter score (NPS).
CEOs can measure and optimize the performance of a digital marketing campaign only by using the right marketing metrics. But marketing metrics for CEOs must vary across marketing campaigns. The CEO must combine the right metrics to accomplish the business goals by finetuning the short-term and long-term marketing campaigns at the right time.