For over twenty years I’ve helped Heads of Marketing build countless dashboards and analyses of their marketing metrics for directors and boards. But I remember a less than successful attempt in my early career to produce a marketing report.
Filled with excitement, I revealed my efforts, only to watch (with growing discomfort) the Director skim through my charts and stats – eyes glazing over at my detailed presentation.
I was lucky enough to be set straight that day, and since owning my own business, I have a greater understanding of the level of detail needed from a marketing department.
I also work with many clients who struggle with the same dilemma: “How do I condense all this down?”
Most leaders just want the top level figures that indicate how their business is doing and if their investments are getting a good return. The bottom line being – are we making money?
So here are some of the valuable lessons I’ve learned, and a few metrics that most of the board members I work with, want to see.
Tip 1: Keep it top level and reduce content until it hurts
You and your CEO are interested in different levels of information. They are not running the marketing function – you are. You will be interested in acquisition per channel, cost per channel, digital performance, the latest campaigns, keywords and social media trending. You need this data to make decisions and to allocate your budget.
The CEO isn’t making those decisions – they won’t need to see this data, and the more you send – the less they’ll see.
When everything is important, nothing is important. Beware though – they are inherently keen on marketing performance. It is a cornerstone indicator of the performance of the business they are running. But they need the data distilled to a handful of top-level metrics.
Tip 2: Support the business plan – if you haven’t read it recently, read it
Every CEO has a job to ensure everyone knows what the business strategy is. So, don’t forget there will usually be some strategic initiatives, outside of the normal metrics, which will need data to support them. Is the plan to grow customer volumes or consolidate, increase profits or grow revenue – whatever it is, support the strategy with your metrics and align them to it.
Tip 3: Provide prior performance and target comparison to understand direction of travel
Information comes to life when it is compared. An ROI of 20% might sound terrific – but if this time last year ROI was 30% – you would want to know why its reduced by a third, wouldn’t you?
Metrics in isolation seldom help. How are you performing compared to last year, how are you performing compared to last quarter, how are you performing compared to target? Comparison doesn’t just make data useful, it gives it context and it shows you direction of travel.
Tip 4: Focus on acquisition, cost, and value in your marketing metrics
We are all different, however, these are key metrics that every leader will want to see:
How many leads have been generated by marketing activity, how many customers have been acquired and what is their value? You need to bring all inbound sales channels together to give one or two metrics.
Tracking acquisition is critical to accurately reporting ROI. The more you automate, the more complete your results will be. You may need to check that your CRM or lead management system updates all inbound leads – online and through offline channels such as the phone.
2) Spend and customer acquisition cost
How much are we spending across all channels and all lead generation activity? Knowing your Customer Acquisition Cost is the first step toward understanding your ROI. If your marketing spend was £10,000 and you acquired 10 customers, then your Customer Acquisition Cost is £1,000. That’s straightforward. This leads us to Lifetime Customer Value.
3) Lifetime customer value
If you are able to increase the lifetime value (LTV) in relation to the Customer Acquisition Cost you will improve returns.
In its simplest form LTV = Monthly Revenue / Monthly Churn Rate. For example, you acquire one customer paying £100 per month, however you know that on average you lose 1% of your customers each month. LTV = £100 / 1% = £10,000.
4) Return on investment
Now it all comes together. Simply put, how effectively is your marketing budget being spent. You could use the LTV of your acquisitions and Customer Acquisition Cost to produce a straightforward metric.
Producing an informative and effective board level marketing metrics report
In summary, as a marketer you will have hundreds of metrics at your fingertips. This doesn’t mean you need to share it all. To produce a report that is meaningful to (and valued by) board members, is:
- Keep it top level and cut it back on content until it hurts
- Understand your businesses goals and strategy and align your report to them
- Put data into context by comparing against prior period and budget
- Focus on acquisition, cost, and value.