Identifying the right marketing metrics to track, can help CMOs justify the time and resources spent on their marketing efforts.
Competition in the B2B marketplace is becoming increasingly fierce with each passing quarter. With the introduction and implementation of the latest marketing technology innovations, it has become difficult to track the metrics that yield the required RoI. One of the reasons that most marketing teams still fail to justify the impact of their efforts tracking obsolete metrics that do not align with the marketing strategy’s key performance indicators (KPIs). Additionally, tracking such metrics does not provide actionable insights into the contribution of marketing towards growing the pipeline and revenue. In conclusion, marketing teams need to become agile and lean to deliver the maximum value possible to the organization. Then they will only track the metrics and measure outcomes and activities that bring value to the organization. Some metrics that CMOs should reconsider tracking and some they should start following up are:
Pipeline dollars per channel instead of pure leads
Tracking leads, whether raw, sales, or marketing-qualified, are inferior metrics to track in isolation when combined with several other metrics. Relying on leads gathered from marketing form-fills can be misleading as they are just the beginning of a prospect’s journey. It can even be harmful if the marketing department spends too much money without measuring the RoI on it. Instead, CMOs should emphasize on tracking pipeline dollars per channel. This will enable the marketing to see where the invested dollars are contributing to their revenue rather than tracking and following arbitrary leads that may or may not convert.
Customer acquisition cost (CAC) instead of cost per lead (CPL)
Tracking CPL allows the CMOs to invest their monetary resources in cheap lead sources. While following leads that have a higher probability of closing or, better yet, winning- conversion with CPL metric still does not provide the whole picture, these rates are only a smaller part of the equation for understanding how much it costs to acquire new customers. Irrespective of the cost or conversion stats, leads provide no real value to the organization if they have converted. However, with tracked customer acquisition cost (CAC), CMOs will know the accurate cost of acquiring new customers balanced against the revenue over the customer lifetime.
Also Read: Three Ways to Keep Customers Coming Back
Customer lifetime value instead of a vanity metric
Most marketing teams spend time tracking email clicks, page-one keyword rankings, and website bounce rates for optimizing their programs that do not directly add value to the pipeline and revenue. While it is acceptable to keep tabs on some of the individual channel performance metrics, relying on superficial metrics, as mentioned above, should not be the core part of digital marketing activities.
Considering customer lifetime value (CLTV or CLV) as a primary marketing metric can provide a benchmark for segments and vertical industries that will bring long-term profitable customers while adding revenue.
With the nature of marketing continuing to witness rapid changes, it is critical that CMOs reevaluate the metrics they are tracking. This way, they will be able to prove the worth of their marketing efforts.
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