4 marketing metrics your boss actually wants to see in 2021

As marketers we have so many different acronyms, KPIs (there we go again with the acronyms!) and metrics thrust at us that it can be hard to know exactly what is valuable to report on.

This is especially true because, within our teams, a lot of these metrics are used regularly. 

But heads of companies and boards of directors don’t need all of the nitty gritty of our SEO rankings and social engagements. In fact, oversharing metrics with your boss can have them tune out as quickly as oversharing about your cat’s new toy. It’s not that they don’t care exactly, but their time is limited and they need you to get to the point.

Knowing all of that, we’ve put together a quick list of the metrics that your boss will actually want to see in the coming year. The kind of stuff that can help you show them just how valuable marketing really is (and maybe help you get more budget).

Return on investment (ROI)

Return on investment is a classic and you probably already know that your boss cares about this one. But it’s so important that we kept it in anyway, just to be sure.

Return on investment is calculated with a pretty straightforward formula: net return on investment / cost of investment x100 = ROI.

What tends to be the sticking point for marketing teams is having clear data to draw from. You may not be clear on which accounts and deals marketing played a role in or you may not have an accurate measure of the cost it took to get there. 

Sorting out your data is key here and will be something of a recurring theme in the next few metrics as well.

(Already know about ROI, but having trouble presenting it well? Check out our new guide:)

Customer acquisition cost (CAC)

Much like ROI, customer acquisition cost needs clean data to be accurate, but it is a valuable metric to know and use. 

The formula for this one is: total sales and marketing cost / new customers = CAC. 

In order for this to be effective, you should define parameters like a time period during which you calculate the spend and new customers. A month is a good starting point.

Calculating the total sales and marketing cost requires you to consider all of the following: advertising spend, salaries, commissions and bonuses plus overheads during the set time period.

To give your boss a better understanding of the impact of CAC and the efficiency of the work you do, it can be helpful to put it into context. Maybe CAC over a comparative period of time or by campaign! This can also help you as a marketer plan more effective strategies.

Marketing % of CAC

Even more exciting than CAC for you marketing leaders out there is the marketing percentage of customer acquisition cost! 

This one can easily get overlooked as it sometimes feels too granular. However, it can be helpful to understand which team contributes to the bulk of the cost for new customers. This is especially true for sales and marketing teams that may not be well-aligned.

Read more: 8 Ways to Align Sales and Marketing

The formula for finding the marketing % of customer acquisition cost is: marketing costs only/ total sales and marketing costs = Marketing % of CAC.

This percentage is useful for understanding where much of the spend for customer acquisition comes from and allows you to get a better view of where you can make things leaner. Disproportionate spend can also help identify problem areas that may need to be worked through.

Customer Lifetime Value (LTV) : CAC

The customer lifetime value: customer acquisition cost ratio is incredibly helpful when sharing your figures with your boss. 

This metric shows how valuable a customer is to your company. The reason that this one is so important is that you can see if your efforts are worthwhile.

It can, for example, show that although your CAC is quite high, it’s justified by the overall value that bringing in each customer adds to the business. Keep in mind that this can work the other way round too. If it turns out that the amount spent on bringing customers in won’t be recouped by them being customers, this is a good time to re-strategise.

To calculate LTV:CAC you need two numbers to start with - your LTV and your CAC. Customer acquisition cost we already covered. Lifetime Value (LTV) is calculated with this formula: (Revenue the customer pays in a period - gross margin) ÷ Estimated churn percentage for that customer.

Now that you have that, you can create the LTV:CAC ratio by: LTV / CAC = RATIO:1.

For instance, if your LTV is £150,000 and your CAC is £30,000, your LTV:CAC ratio is 5:1.

While this is, by no means, an exhaustive list, introducing these four key metrics to conversations with your boss can make a world of difference. You (and, by extension, your team) will be seen as knowledgeable and prepared and you’ll be better positioned to prove the value of marketing.

If you want to talk about how you can get more out of your marketing team, get in touch.

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