I once had a boss who hated when processes or even employees were described as “efficient.”
“Efficiency should go without saying,” he would snap.
He had obviously never seen me clean a kitchen, an activity that typically includes at least one snack break.
Even if it has to be a behind-the-scenes measurement, as marketers, understanding the efficiency of our sales and marketing teams is very important. More specifically, we should be collecting data that justifies our marketing budget—especially because 73% of executives don’t believe that marketers are focused enough on results to truly drive incremental customer demand.
So if the majority of executives aren’t buying into your worth as a marketing department, it’s time to wow them with some metrics. You know how those folks love numbers. But with so many moving pieces—blogging, social media, website performance, online advertising, and so much more—how can you really know what’s working and what isn’t? Marketing metrics, of course!
What are marketing metrics?
One of the most important metrics to consider is customer acquisition cost (CAC).
What is customer acquisition cost?
CAC is the average amount your company spends to acquire a new customer. Obviously, the lower the CAC, the better. This figure is very useful in determining the success of various marketing strategies, as well as the performance of your sales and marketing teams.
How do I calculate customer acquisition cost?
To calculate CAC, focus on a time period (month, quarter, or year) and combine the total cost of all advertising, including things like online ads, print materials, and commercials, with all salaries, commissions, bonuses, and any other associated overhead spent on sales and marketing. Next, determine the number of new customers acquired in that time period. Then use the following formula:
Total Sales and Marketing Costs/New Customers = Customer Acquisition Cost
If your company is A/B testing different campaigns, we recommend looking at your CAC at least quarterly to compare the CAC in both campaigns to determine which is the most effective.
Why are you making me do so much math?
Because if we have to do it, so do you. Plus, it’s efficient.
There are several other metrics to consider when analyzing how efficient your inbound marketing strategies are, but 4 particular ones that we think your executives might actually be interested in. Check out our free ebook and start calculating your worth today!