In the 20 years I spent as the CEO of the business that I co-founded, we have made several pivots and navigated through two of the most difficult downturns of recent history, becoming a high-growth, sustainable company.
Many people ask me what factors contributed to this long-term success. I’m often asked what factors contributed most to that long-term success.
Although I used to think of marketing as a soft function, one that made materials look nicer, our business has been transformed since we turned our marketing team into a revenue driver. We achieved this through a variety of measures, including quarterly business reviews and making sure we met our marketing goals that impact our bottom line and revenue.
We struggled to determine which metrics were most important for our business.
CMOs and CEOs who want to boost company growth must start measuring marketing based on the metrics that matter most to their bottom line. Start with these.
Pipeline
You’d be amazed at how many marketers get this one wrong. Many marketers do it on purpose to improve their numbers.
It would be best if you sat down with your salespeople to discuss which leads are really moving the needle and why.
It would be best if you narrowed down the definition of a sales-qualified lead (SQL) with the help of your colleagues in sales so that your marketing team is able to focus on the most relevant prospects and industry segments. If your company sells mainly to VPs and rarely closes a sale with managers, an SQL would only include those who are at VP or higher levels.
Your pipeline will decline when you implement this change. If you talk to your leadership about the new description and how it will help you attract the right prospects and generate more ROI, then they will understand and support your long-term strategy for the pipeline.
Attribution
Marketers should also be able to identify which touchpoints work for their company.
If certain platforms like LinkedIn or Google Ads are the most effective in converting customers, then you should allocate more of your budget to them. Marketers should also understand the “Digital Body Language” of their customers. What are the touchpoints or actions that indicate that a prospect is likely to become a client? What signs indicate that you are about to lose them as a customer?
You need to know what your prospects are telling you. It would be best if you then acted on these signals.
There are certain campaigns that you will need to run, regardless of the attribution. You should know which initiatives are bringing in the most revenue for your company.
It doesn’t necessarily mean that you should not experiment with new marketing techniques, but these tactics should be guided and informed by past success and digital body language indicators.
Customer Lifetime Value and Churn
The two metrics are distinct but so closely related that marketers can’t separate them. Customer lifetime value (CLV) is the expected net profit from acquiring new customers. This number increases when you reduce churn.
Seventy percent of companies agree that it is easier to keep a client than to find a new customer. Many marketers don’t think about marketing to their existing customers. They’re more focused on acquiring new ones and increasing their pipeline. This is a noble goal, but it may not be the best way to get a true return on investment from your marketing.
Read the digital body language of your customers to determine which ones are likely to leave or those who may be more open to an upsell.
When you are transforming your marketing metrics, find a way to track retention and upselling. You may have to use statistics to prove to your executive team the importance of retaining customers and why it is important to market to both prospects and existing customers.
Overall Engagement
Marketers can no longer rely on impressions, visitors to websites, or reach. Heck, I don’t care how many people watch a video.
The smartphone and “always-on” culture have changed marketing in major ways. The ability to click is easier than ever, but keeping viewers interested in your content can be a challenge. CNBC reported that ads only have 5-6 seconds to engage millennials. You can combat the shrinking attention span by tailoring your content to a more personal level. McKinsey discovered that “personalization could deliver 5-8x the ROI of marketing spend and boost sales by 10% or more.” This is a metric that we can all support.
Companies need to be able to interact with their customers in a personal way, whether it is through personalized email campaigns, by recommending products or solutions that are relevant, or by using chatbots. This approach will become even more crucial as Millennials, members of Generation Z, and others enter the workforce and begin to make more purchases.