The 6 Marketing Metrics: Used by Marketing Superstars

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The 6
Marketing
Metrics
used by
marketing
superstars
THE 6 MARKETING METRICS USED BY MARKETING SUPERSTARS
Introduction
As marketers, we work tirelessly to move the believe that marketers are focused enough on
needle on what often seems like a laundry list results to truly drive incremental customer de-
of metrics. We look at website visits, conversion mand.
rates, generated leads per channel, engagement
on social media platforms, blog post shares, When it comes to marketing metrics that matter
email click-through rates... and the list goes on. to your execs, expect to report on data that deals
When the time comes to present the impact of with the total cost of marketing, salaries, over-
your marketing efforts, you can’t present him or head, revenue, and customer acquisitions. This
her with everything you measure. guide will walk you through the six critical mar-
keting metrics your boss actually wants to know.
While many bosses theoretically understand that
a solid marketing team can directly impact your
company’s bottom line, 73% of executives don’t Let’s get started.
Customer CAC illustrates how much your company is

spending per new customer acquired. You want a
Acquisition Cost low average CAC. An increase in CAC means that

you are spending comparatively more for each
(CAC) new customer, which can imply there’s a problem

with your sales or marketing efficiency.
What It Is Sales and Marketing Cost Formula

The Customer Acquisition Cost Program and advertising spend sales and marketing cost ÷ new customers = CAC
(CAC) is a metric used to determine + salaries + commissions and
the total average cost your company bonuses + overhead in a month,
spends to acquire a new customer. quarter or year Sales and Marketing Cost = $300,000
How to Calculate It New Customers

Take your total sales and marketing Number of new customers in a New customers in a month = 30
spend for a specific time period and month, quarter, or year
divide by the number of new cus-
tomers for that time period.
CAC $300,000 ÷ 30 = $10,000 per customer
Marketing % The M%-CAC can show you how your marketing

teams performance and spending impact your
of Customer overall Customer Acquisition cost.

An increase in M%-CAC can mean a number of things:
Acquisitions
1. Your sales team could have underperformed (and consequently re-
ceived) lower commissions and/or bonuses.
2. Your marketing team is spending too much or has too much overhead.
Cost
3. You are in an investment phase, spending more on marketing to provide
more high quality leads and improve your sales productivity.
What It Is Marketing Costs Formula

The Marketing % of Customer Expenses + salaries Marketing Cost ÷ Sales and Marketing Costs = M%-CAC
Acquisition Cost is the marketing + commissions and bonuses
portion of your total CAC, calculated + overhead for the marketing
as a percentage of the overall CAC. department only Marketing Cost = $150,000
How to Calculate It Sales and Marketing Cost

Take all of your marketing costs, and Program and advertising spend Sales and Marketing Cost = $300,000
divide by the total sales and market- + salaries + commissoins and
ing costs you used to compute CAC. bonuses + overhead in a month,
quarter or year M%- $150,000 ÷ $300,000 = 50%
CAC
Ratio of Customer The higher the LTV:CAC, the more ROI your sales
and marketing team is delivering to your bottom
Lifetime Value to line. However, you don’t want this ratio to be too
high, as you should always be investing in reach-
CAC (LTV:CAC) ing new customers. Spending more on sales and

marketing will reduce your LTV:CAC ratio, but
could help speed up your total company growth.
What It Is Lifetime Value (LTV) Formula

The Ratio of Customer Lifetime (Revenue the customer pays in a LTV:CAC
Value to CAC is a way for companies period - gross margin) ÷ Estimated
to estimate the total value that your churn percentage for that customer
company derives from each custom- LTV = $437,000
er compared with what you spend to

acquire that new customer.
CAC = $100,000
How to Calculate It
To calculate the LTV:CAC you’ll need
to compute the Lifetime Value, the LTV: 437,000:$100,000 = 4.4 to 1
CAC and find the ratio of the two. CAC
Time to In industries where your customers pay a month-

ly or annual fee, you normally want your Payback
Payback CAC Time to be under 12 months. The less time it

takes to payback your CAC, the sooner you can
start making money off of your new customers.
Generally, most businesses aim to make each
new customer profitable in less than a year.
What It Is Margin-Adjusted Revenue Formula

The Time to Payback CAC shows you How much your customers pay CAC ÷ Margin-Adjusted Revenue = Time to Payback CAC
the number of months it takes for on average per month
your company to earn back the CAC
it spent acquiring new customers. Margin-Adjusted Revenue = $1,000
How to Calculate It
You calculate the Time to Payback CAC = $10,000
CAC by taking your CAC and dividing
by your margin-adjusted revenue
per month for your average new Time $10,000 ÷ $1,000 = 10 Months
customer. CAC
Marketing This metric illustrates the impact that your mar-

keting team’s lead generation efforts have on ac-
Originated quiring new customers. This percentage is based

on your sales and marketing relationship and
Customer % structure, so your ideal ratio will vary depending

on your business model.
What It Is What This Means and Why Formula

The Marketing Originated Customer It Matters New customers started as a marketing lead / New customers in a month
% is a ratio that shows what new A company with an outside sales = Marketing Originated Customer %
business is driven by marketing, by team and inside sales support may
determining which portion of your be looking at 20-40% Margin Origi-
Total new customers in a month = 10,000
total customer acquisitions directly nated Customer %, whereas a com-
originated from marketing efforts. pany with an inside sales team and
lead focused marketing team might
Total new customers started as a marketing lead = 5,000
How to Calculate It be at 40-80%.
To calculate Marketing Originated
Customer %, take all of the new
customers from a period, and tease MOC 5,000 ÷ 10,000 = 50% Marketing Originated Customer
out what percentage of them start-
ed with a lead generated by your
marketing team.
Marketing This metric takes into account the impact market-

ing has on a lead during their entire buying lifecy-
Influenced cle. It can indicate how effective marketing is at

generating new leads, nurturing existing ones, and
Customer % helping sales close the deal. It gives your CEO or

CFO a big-picture look into the overall impact that
marketing has on the entire sales process.
What It Is How to Calculate It Formula

The Marketing Influenced Customer To determine overall influence, Total new customers that interacted with marketing / Total new
% takes into account all of the new take all of the new customers your customers = Marketing Influenced Customer %
customers that marketing inter- company accrued in a given period,
acted with while they were leads, and find out what % of them had
Total new customers = 10,000
anytime during the sales process. any interaction with marketing while
they were a lead.
Total new customers that interacted with marketing = 7,000
MIC 7,000 / 10,000 = 70%

Conclusion
As marketers, we track so many different data metrics detailed in this cheat sheet to report on
points to better understand what’s working and how your marketing program led to new custom-
what’s not that it can become easy to lose sight ers, lower customer acquisition costs, or higher
of what’s most important. Reporting on your busi- customer lifetime values. When you can present
ness impact doesn’t mean you should no longer marketing metrics that resonate with your deci-
pay attention to site traffic, social shares, and sion-makers, you’ll be in a much better position
conversion rates. It simply means that when re- to make the case for budgets and strategies that
porting your results to your executives, it’s crucial will benefit your marketing team now and in the
to convey your performance in a way that your future.
C-suite can get excited about.
Rather than talking about per-post Facebook en-

gagement and other “softer” metrics, use the six
About Wings4U
Our sweet spot as a B2B marketing agency is To further aid our clients we have extended our
content creation. We understand the magic services to inbound marketing. This ensures your
behind quality content, and we deliver to budget, content is seen, leads are being generated 24/7
on time, in formats that drive results. and your prospects are nurtured until they become
customers.
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Customer CAC illustrates how much your company is

Acquisition Cost low average CAC. An increase in CAC means that

(CAC) new customer, which can imply there’s a problem

What It Is Sales and Marketing Cost Formula

How to Calculate It New Customers

Marketing % The M%-CAC can show you how your marketing

of Customer overall Customer Acquisition cost.

What It Is Marketing Costs Formula

How to Calculate It Sales and Marketing Cost

CAC (LTV:CAC) ing new customers. Spending more on sales and

What It Is Lifetime Value (LTV) Formula

er compared with what you spend to

Time to In industries where your customers pay a month-

Payback CAC Time to be under 12 months. The less time it

What It Is Margin-Adjusted Revenue Formula

Marketing This metric illustrates the impact that your mar-

Originated quiring new customers. This percentage is based

Customer % structure, so your ideal ratio will vary depending

What It Is What This Means and Why Formula

Marketing This metric takes into account the impact market-

Influenced cle. It can indicate how effective marketing is at

Customer % helping sales close the deal. It gives your CEO or

What It Is How to Calculate It Formula

Total new customers that interacted with marketing = 7,000

MIC 7,000 / 10,000 = 70%

Rather than talking about per-post Facebook en-

Videos Infographics Case Studies Brochures Strategy Management

Connect with us:

Presentations Newsletters Banners Posters

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