If you’re in Marketing, you know that you are constantly asked to justify the results of your campaigns and efforts. When it comes to their success or failure, the numbers don’t lie! If you are reporting your numbers back to the CEO, it’s important to identify the right key performance indicators, or you may not tell the whole story. Below we outline some guidelines for reporting the right metrics.
Less is More
While it is tempting to include every KPI available, a long report can be daunting to read and may not end up read by the people that matter. Not every metric should be included. Focus in on the most relevant metrics to your specific campaign.
Some critical questions to ask when deciding which metrics to include are:
1.Is this metric tied to my business goals?
2.Does this metric show my campaign’s effectiveness or fiscal impact?
3.Is this metric redundant?
Communicate Reasons for Change
In business, being adaptable can be the difference between success and failure. Communication strategies should address that business matters seldom remaining static. Instead of only reporting the success of your marketing, consider metrics that show future opportunities.
Below are some critical KPI to watch out for in your business:
Customer Retention Rates: The purpose of measuring Customer Retention Rates is determining customer loyalty. It’s good business sense to build a faithful customer base because it’s less costly to keep customers than seek new ones. Feedback demonstrates popular goods and/or services that the company offers and identifies some of the reasons why customers return. Marketing strategies that reward consumer loyalty benefit the business by increasing profits.
The customer retention rates formula uses established data for a designated time frame based on current, new, and lost customers.
Customer Lifetime Value: This metric establishes a customer’s overall economic value to the business from start to finish. It provides feedback about the success of long-term marketing levels. A positive return on investment (ROI) indicates the benefit of investing in customer retention.
The formula for Customer Lifetime Value relies on average order value. purchase frequency, and the length of time spent with the company.
Return on Advertising Spend (ROAS): One of the most useful metric formulas is ROAS. It is a formula designed to evaluate marketing campaigns and measure advertising profit. Dollars targeted for advertising that attract customers and additional business are frequently a matter of debate between executive and marketing departments. The use of Return on Advertising Spend measures marketing performance and revenue received for each advertising dollar spent in a specific campaign.
Analyze the areas to track in your business before selecting metric formulas to use for measurement. It’s easy to get caught up in looking at statistics and estimates used by larger companies. Avoid focusing on metrics that have little or no effect on your marketing tactics or business methods. Review which processes are important to success and identify where to find the statistics needed to track performance. Then use the appropriate data to provide viable marketing practices.