Do you know the phrase ‘Less is More’? It’s an ideal phrase to keep in mind when producing marketing reports, but what marketing metrics do board members need?
Money, Money, Money
For board members, what they really want to know is how much of their money is being spent and is it being converted in enquiries and sales?
The marketing manager and the board members are looking for different things in reporting than a marketing manager would want to see, they won’t be interested in acquisitions per channel or keywords.
Don’t fall for the common mistake some marketing managers make and assume they aren’t interested in marketing performance though, they most certainly are.
They just need to see how well the marketing is doing in different ways than a marketing manager.
Metrics Don’t Mean Anything On Their Own
A Return On Investment of 40% may sound good, it may sound bad, we don’t know because it hasn’t been compared to anything.
Could you compare it to this time last year, or last month? If it is a new marketing campaign and you can’t compare it to previous metrics, compare it to the agreed targets you should have put together at the very beginning.
Speaking of which…
Agreed Targets And Business Plans
When the marketing manager is first involved in the product cycle, they would usually work with other managers and have agreed on targets which are authorised by a Director.
These targets will usually fit in with the company’s business plan.
So, when it is time to produce monthly metrics for the board members, go back to these targets and plans.
It is very easy to get distracted and include all sorts of positive metrics which won’t actually mean anything to a board member.
In some ways, the more they are shown, the less they will see.
This is the first key metric you should report on. Basically acquisition is getting new customers.
So, if you have been cold calling some customers, how many of them have turned into leads.
Or enquires through a contact page, social media posts, ad campaigns.
How Much Are You Spending?
One metric we can guarantee board members will be interested to see is the spend!
As we mentioned earlier, don’t overload them with itemised analytics though.
Always report on Acquisition spend, if you spent £20,000 on marketing and got 20 customer leads, then your acquisition cost is £1,000. (just divide the cost by the number of leads).
Customer Lifetime Value
Customer Lifetime Value is simply how many customers you lose each month. The most simple way of calculating it is: Monthly Revenue/Monthly Customer Losses = Customer Lifetime Value.
For example, if you gain a customer who pays £500 per month but every month you lose 5% of your customers then the Customer Lifetime Value is £500/5% = £10,000.
Now, this is just a very basic Customer Lifetime Value and there many other variants to be taken into consideration.
Which is why it is handy the experts at HubSpot have put together this great explainer and even included a Customer Lifetime Value calculator to help you out.
Return On Investment
The Return On Investment is the road all the other metrics are leading to and is going to the main metric the board members are likely to be interesting in.
Quite simply, this is where they will see how well you are using your marketing budget!
In its most basic form, the Return On Investment (ROI) is calculated by taking the sales figures for a period, minus the marketing costs for the same period and divided by the marketing cost.
So, if the companies sales increased by £1000 and the marketing has cost £100, then the ROI is 900%.
Bear in mind this is the simplest way to calculate it and we included it so you would get a rough idea of how ROI works.
If you do manage to get an ROI of 900% please treble check your figures and give us a call, eh?!
For some in-depth but easy to understand information on how to calculate ROI in detail, the always knowledgeable SEO guru, Neil Patel, has made this excellent ROI Guide.
It’s not just Neil Patel who has been busy on this subject either. Here at GrowTraffic, we recently wrote about How To Improve Content Marketing When ROI Is Low.
Yes, the bit you have all been waiting for, the legendary Growtraffic blog summary.
- Less is more. Only give board members the metrics they
- Always make sure your reporting is in line with agreed target and business plans.
- A metric figure on its own is like Piers Morgan, confusing and useless.
- The three essential metrics the board members will need are acquisitions, costs and ROI (value).