Marketing Metrics Makeover

marketing metrics
A few weeks ago we discussed marketing metrics that impress your boss: customer acquisition costs, the marketing percentage of customer acquisition costs, length of time to recoup those costs, customer lifetime value, number of customers marketing has acquired, and the number of customers nurtured by marketing. While presenting these metrics to your boss is sure to impress, what happens if the actual numbers are disappointing? Once you have benchmarks in place, give your marketing metrics a makeover by improving them. Here’s how to fix disappointing metrics.

      • Customer Acquisition Costs – Does it cost too much to acquire a new customer? Look at the sales cycle to see if you can shorten or streamline it. Work with the sales team to define the criteria for qualified leads, examine marketing campaigns to identify those that have the highest return on investment, and focus on using higher ROI campaigns to reach the most targeted, qualified prospects.
      • The Marketing Percentage of Customer Acquisition Costs – If the percentage of your marketing budget that goes toward customer acquisition costs has gone up, that’s a signal that it’s time to reevaluate your strategy. Again work with sales to ensure a cohesive approach. Examine conversion rates, look for areas of underperformance, and find ways to qualify leads more efficiently.
      • Length of Time Required to Recoup Customer Acquisition Costs – Does it take an excessive amount of time before customers become profitable? A three-pronged approach can shorten this timeframe. Start by revisiting your pricing structure, possibly requiring higher payments upfront in order to become profitable sooner. Next, maximize the value of each customer by identifying upselling and cross-selling opportunities. Finally, evaluate the nurturing and sales process to find ways to shorten it which reduces acquisition costs in the first place.
      • Customer Lifetime Value (CLV) – This is related to the above, but it also stands alone. Again, you will need to evaluate your sales cycle and acquisition costs in an effort to reduce those. Finding additional opportunities can also increase CLV. In addition, reducing “churn” should also be prioritized. Churn refers to customers who are dissatisfied and leave your business. Evaluate product quality, customer service, renewal processes, and other areas that affect churn and address areas that need improvement. By reducing turnover, you can increase the number of profitable customers and increase CLV as a whole for each segment of customers.
      • Number of Customers Directly Acquired by Marketing – If the number of customers directly acquired by marketing has gone down significantly, reevaluate your lead management process. Are leads being nurtured properly? Are they being given the right information at the right time in the sales and nurturing cycle? While it’s tempting to buy more leads, it’s not helpful if your lead management system isn’t working to move them through the funnel toward a favorable buying decision.
      • Number of Customers Nurtured by Marketing – This metric involves the number of customers that the marketing department has assisted. If this metric goes down, it means that marketing is becoming less involved in the process once a lead has been turned over to sales. It’s smart for sales and marketing to work together to nurture leads, not as separate entities. It may be time to realign sales and marketing to ensure that leads are both generated and nurtured efficiently.

As with most performance measures, these marketing metrics will fluctuate. When the metrics above change suddenly or dramatically, it could be a red flag that needs your attention. Even without dramatic changes, you may want to work on improving each of these metrics to ensure a shorter customer acquisition cycle and a faster time to become profitable.

Six Marketing Metrics to Impress Your Boss

lead generation strategy


Let’s face it, we’re all accountable to our bosses. As a marketing professional, you want to look good in the eyes of your boss, right? Unfortunately, it’s not always easy to figure out what the boss expects or how to build credibility. Fortunately, the following six marketing metrics can help you crack that code as well as provide you with the insights you need to do an even better job.

  • Customer Acquisition Costs – How much does it cost to acquire a new customer? This number is important! In order to determine customer acquisition costs, add up all sales and marketing costs for a given time period (month, quarter, or year) including advertising, overhead, salaries, bonuses, and commissions. Now, determine how many customers were acquired during that same time period. Divide your costs by the number of customers to come up with your customer acquisition cost.
  • The Marketing Percentage of Customer Acquisition Costs – How much of your marketing budget goes toward customer acquisition costs? Deduct sales from the equation and express marketing’s portion as a percentage. Once you have a baseline, you can watch the percentage for signals. For example, if your percentage increases or decreases dramatically, you may want to investigate.
  • Length of Time Required to Recoup Customer Acquisition Costs – In other words, how long until your newly acquired customer becomes profitable? For example, if it costs you $100 to acquire a new customer to a fitness center and the customer signs up for a $20 per month plan, it will take at least five full months before you recoup your costs. From that point forward, the customer will become profitable.
  • Customer Lifetime ValueHow much is each customer worth over time? For example, if the typical fitness center customer stays for an average of five years and spends $1,000 per year, the customer lifetime value would be $5,000 less acquisition costs. However, some customers will cancel which affects the entire customer pool’s CLV. To account for this, divide your initial figure by your customer churn rate. You can take this even further, and impress your boss even more, by calculating the ratio between customer lifetime value and customer acquisition costs. If you have a high customer lifetime value to customer acquisition cost ratio, this means that you have a higher return on your sales and marketing investments.
  • Number of Customers Directly Acquired by Marketing – This metric and the next one can be used to show your boss how many customers the marketing department was responsible for acquiring or nurturing. While you may have a friendly, or not-so-friendly, rivalry with the sales department, marketing is often undervalued. By showing your boss exactly how many customers your team has brought in, your department may get more respect. If this metric increases, it means that marketing is driving more sales or that the sales team has become less effective at prospecting.
  • Number of Customers Nurtured by Marketing – This metric shows the number of customers that your department helped at any point in the process. For example, the sales team may have been responsible for originating a lead; however, if that lead requests additional information by signing up for an autoresponder series, the marketing department becomes involved and helps nurture that lead from that point forward. Again, your department should be recognized for its contributions. If this metric increases, it means that marketing is influencing more leads.

Your boss may not know exactly what he or she expects as far as key marketing performance metrics go. By presenting these six marketing metrics, you can give your boss significant insights into your team’s productivity.