In this video, Madison from our Earned Media team will guide you through the process of demonstrating the value of marketing to your organization. Continue reading to discover more insights!
Transcript
While it’s apparent to those in the marketing field that marketing is crucial for business success, decision-makers may not always see the value. They require evidence that your marketing efforts contribute to company growth and that their investment yields a positive return, rather than depleting resources.
Learn how to effectively communicate the impact of your marketing activities and demonstrate its value to your superiors in this article.
Executives seek to understand how marketing initiatives align with the company’s financial performance. Therefore, it’s essential to monitor key performance indicators (KPIs) that influence budget allocation.
Although website traffic and keyword rankings are significant metrics, they may not resonate with CFOs or CEOs when evaluating company performance. Therefore, while tracking these metrics is important, they should not be the sole focus.
Below are several revenue-centric metrics to include in your reports to leadership:
Return on Investment (ROI)
ROI illustrates the revenue generated by marketing relative to its cost. Some strategies, like PPC ads, may require a higher monetary investment than others, such as SEO.
By demonstrating that the costs are significantly less than the financial benefits, you can convince your company to continue investing in marketing. ROI can be measured for overall marketing efforts, as well as for individual channels and campaigns.
Revenue per Channel
This metric measures the revenue generated by each marketing channel during a specified period, such as SEO or digital ads.
Tracking this metric allows you to showcase the value of your marketing team and the effectiveness of each individual marketing channel. Demonstrating revenue generation can be a compelling argument for continued support of specific marketing channels.
Customer Acquisition Cost (CAC)
CAC measures the expenses associated with acquiring new customers. By calculating the total cost per customer, you can determine if the CAC exceeds the revenue each customer brings in.
A lower CAC indicates that more revenue is allocated to the bottom line, contributing to business growth.
Customer Lifetime Value (CLV)
CLV represents the total financial contribution a customer will make to your business over time. Consider factors like CAC when determining the true value of your customers.
Your marketing can significantly impact this metric by attracting high-quality leads and fostering customer engagement post-purchase.
Conversion rates can vary depending on the context. For instance, tracking sales conversion rates or email sign-up conversion rates can provide valuable insights into the effectiveness of your marketing efforts.
Lead generation rate is another critical indicator of your marketing team’s success. Calculate the percentage of website visitors who become leads and further qualify them as marketing-qualified leads (MQLs) and sales-accepted leads (SALs) before passing them to the sales team.
Monitoring these metrics can help you demonstrate the value of your marketing efforts and secure continued support from your organization.
Remember that not every marketing channel will directly generate conversions or revenue. However, indirect benefits, such as increased brand awareness and market share, are still valuable.
By showcasing your achievements and maintaining visibility, you can reinforce the value of your marketing efforts and contribute to your company’s success.
