Wow…there are a lot of things marketers can measure these days. For years, it was difficult to provide any kind of meaningful data to support marketing efforts. It’s part of the reason CEOs have always been skeptical of marketing and the costs related to it.
Today, marketers no longer have that issue. There’s so much data that we can provide that it has shifted from not enough to maybe too much. Selecting the metrics to share with the CEO and senior leadership can be like picking which flavor of ice cream you want. While plain chocolate is always good, wouldn’t chocolate fudge-salted caramel-pecan be better?
More isn’t always better in ice cream flavors or marketing metrics. Are you sure you understand what metrics are most important to leadership? Are you sharing the data that really matters to the business or just a bunch of fluff?
CEOs are all different. The one thing they have in common is that at the end of the day, they all want to run companies that increase in value (whether that's measured by revenue, profit or enterprise value). As a marketing leader, part of your role is to provide the marketing-related metrics that will help your CEO and senior leadership team steer the ship in the right direction.
So what are those metrics? What do CEOs really care about from a marketing perspective? Well, opinions vary on the answers to those questions.
For example, a quick Google search of “What marketing metrics do CEOs really care about” yields 30+ articles and blog posts from the likes of HubSpot, Content Marketing Institute, Moz and many marketing firms. And while there is some overlap and general themes that emerge, the actual metrics they list are not exactly the same.
At Imagine, we measure a lot things but I had not asked Doug what he felt the most important metrics are for him as a CEO. Given his experience running his own company and working with more than 1,500 small and mid-size businesses, I feel that his opinion will give any marketer a great starting point.
Here are the six metrics Imagine knows (and recommends) all CEOs really care about.
1. Lead velocity
The most important metric for predicting growth is lead velocity and how can CEOs make decisions about the future if they are unable to predict growth?
If you’re not familiar with lead velocity, it is the rate of increase of lead generation from one period of time to another period of time. In this blog post, Doug explains the metric and why it is critical.
In a nutshell, a company cannot achieve predictable growth without predictable lead generation. This metric is a key indicator of how your early stage marketing efforts are doing. After all, if the top of your funnel is weak, the bottom will be too.
If you’re not tracking lead velocity, start.
2. Status of funnel relative to your SLA
Throughout the last year, we have been writing about the importance of establishing a sales and marketing service level agreement (SLA). We even created a workbook to help you create one. Did you know that companies with an active SLA are 34% more likely to experience greater year-over-year ROI than those companies that aren’t?
Once your SLA is in place, it is vitally important to measure qualified leads, marketing qualified leads, sales qualified leads and opportunities against the established numbers.
Chances are you are already tracking those numbers without an SLA. The SLA establishes the numbers necessary for the company to realize sales goals. If those numbers are not met at any stage of the funnel, it will impact overall results.
If you’ve created your SLA effectively, measuring the status of your funnel is another metric or tool CEOs can use to predict success or weakness allowing them to make better, more informed decisions.
Monitor the status of the funnel. Your CEO will appreciate it.
3. Cost per… (and trend … is it going up or down)
Here’s one that was pretty common in the articles and posts I read. Cost per...many things. Cost per qualified lead, cost per marketing qualified lead, cost per sales qualified lead, cost per opportunity, customer acquisition cost, etc.
Here’s an example. If you spend $25,000 on marketing in one month and have 250 qualified leads, your cost per qualified lead is $100.
But there’s more than just measuring the cost that’s important here. It’s about identifying trends. Are your costs going up or are they trending down? This forces the question…why? Why are you seeing these trends?
For example, if your cost per qualified lead is going up, you may be spending too much on top of the funnel tactics or possibly the wrong tactics. When these costs go up, profits go down which is something all CEOs are closely monitoring.
4. New qualified leads
The health of your funnel starts with new qualified leads. If you’re not generating enough new qualified leads, the rest of the funnel will suffer.
For example, if you’ve determined that you need 25 new qualified leads every month to maintain the optimum number of leads in the funnel to achieve your revenue goals and the number slips to 20 and then to 15, there could be trouble brewing.
Having this data will help your CEO and leadership team make decisions including those related to marketing spend. For example, if you’ve been advocating for a full-time writer to focus on premium content creation, this number can help you prove that you need more offers to attract more qualified leads to keep the number where it should be or higher.
5. Conversion rates through funnel
When a lead becomes a lead, the goal is for that person to keep converting all the way to customer. That means, every lead has the potential to convert multiple times.
It is important to measure these conversions. If you're meeting or exceeding goals from qualified lead to marketing qualified lead but then things stall between marketing qualified and sales qualified, it may indicate a lead nurturing or sales development issue.
It is important for marketers to understand that metric and also for CEOs. Sometimes marketing takes the heat when sales isn’t able to convert their leads to customers. Measuring conversion rates throughout the funnel helps to identify where the issues really exist. Without this information, CEOs and leadership teams are at risk of making poor decisions
6. Engagement at multiple levels
A lot of time, energy and money go into creating content that resonates with prospects. That content can be whitepapers, ebooks, web copy, email nurturing campaigns, video, etc.
Conditions can change in the marketplace without any notice. Content that was creating engagement six months ago may no longer work. It is important to stay ahead of these changes by measuring engagement at many levels.
Metrics that indicate engagement include website visitors, email click through, blog visits and social media metrics. While these things may seem very marketing-centric and not like something CEOs care about, they have impact beyond the marketing department.
For example, if your target industry is experiencing a change of some kind, it may impact how you position and deliver your products or services. It could also directly impact what you offer.
If engagement decreases and continues to trend down, the CEO needs to know. There may be bigger concerns that need to be addressed beyond fewer retweets.
A strong relationship with your CEO and leadership team is vital to the success of your demand generation strategy. Work with them to identify the metrics that are most important to them. Start the conversation with this list and build on it from there. Chances are they don’t need anything fancy and what you’re already tracking will put you on your way to meeting their needs.