Key takeaways:
Feel like you’re talking to a brick wall during some (or most) of your CEO meetings?
You’re not alone – there’s a heavy disconnect between 75% of CEOs and CMOs. In fact, up to three-quarters of CEOs say they don’t trust their CMO. Yikes!
Marketing executives have a hard job with the potential to transform an organization, so why the disconnect? Shouldn’t a CEO be on the same page as the CMO more than 25% of the time?
The problem is communication.
CEOs want to see results, and CMOs want to deliver them… but they aren’t always on the same page about what that means.
You can talk about results until the cows come home and still leave your boss unimpressed if you’re not talking about the right results.
Think about it… you’re process-oriented because as a marketer, you’re in charge of the actual transformation of your marketing strategy. Every metric is important to your detail-oriented eye, but your CEO has a lot of tasks on her own plate and needs to see results that are dialed into what she expects to see.
That’s why it’s so important for CEOs to talk to their marketing people about expectations. And if your CEO doesn’t initiate that conversation, then it’s your time to start talking.
You could be secretly fuming about that massive ROI dashboard that you put together for the third time in three months, knowing only that your CEO didn’t “get it” and you’re expected to do better next quarter.
"Here’s a secret: Your CEO being unimpressed with your ROI dashboard doesn’t mean your results sucked. It only means that you aren’t presenting the right metrics at the right time."
Here’s a tip: Less is more when it comes to demonstrating marketing success.
Your CEO doesn’t want to see a complicated dashboard with every single metric you’re capable of measuring. Instead, they want to see that you’re dialed into their expectations.
You can create a better content marketing metrics dashboard by narrowing it down to just six valuable metrics that actually show your CEO that you’re doing your job.
Your customer acquisition cost (CAC) is the total sales and marketing cost for each customer you acquire. You compute it by adding together all the sales and marketing spend for a time period (usually a quarter), then dividing it by the number of new customers you got in that same period.
For instance, if you spend $50,000 on sales and marketing in three months and acquire 30 new customers that month, your CAC is $1,666.
Generally speaking, a lower CAC is better. That being said, you can justify a higher CAC if your customers also have a high lifetime value (LTV). That means longer relationships with customers who keep coming back to spend more.
You can find your marketing percentage of customer acquisition cost (M%-CAC) by taking all the marketing costs for a quarter and then dividing it by the sales and marketing costs for the same quarter.
Let’s say you spent $50,000 on sales and marketing that quarter, but $30,000 of it was marketing. That’s 60%.
Your ideal M%-CAC depends on how much you rely on marketing vs. how much you rely on sales. Generally, 60% to 90% means you’re doing most of the work through marketing, though it could also mean your sales guys are underperforming.
Customer lifetime value to CAC (LTV:CAC) can be calculated by taking one customer’s annual spending, then adjusting for your gross margin and dividing by the annual cancellation rate. Then, you divide the LTV by the CAC to get the ratio.
You generally want a higher LTV:CAC ratio because that means your sales and marketing ROI is better. A ratio of 4:1 is great, 3:1 is pretty good, and 1:1 means you’re losing money.
You can calculate the time to pay back CAC by taking the CAC and dividing by the average customers are spending per month.
If it takes you an average of 9 to 18 months to get back your CAC, that’s a decent benchmark. On the other hand, taking longer than 18 months is too long. If you’re getting your CAC back within six months or less, you might not be investing enough in sales and marketing.
Your marketing originated customer percentage is the percentage of all customers you signed up in a quarter who started with a marketing lead.
You want to aim for 40% to 80% marketing-originated leads as a benchmark here. If you can do higher, that’s awesome! If you’re doing lower, then you’re probably relying on sales a little heavily.
The marketing-influenced customer percentage is similar to the marketing-originated percentage, but not the same. Instead of measuring the percentage of customers who started with a marketing lead, you’re measuring the percentage of customers who had any interaction with your marketing funnel.
Here, you should aim for 70% or higher. That’s a good indicator that your marketing team is doing its job and influencing a lot of relationships.
Got your dashboard all put together, but worried your CEO still won’t like what they see?
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