How do you interpret all the marketing momentum into business metrics? We will walk through true ROI, Life Time Value, Internal Benchmarks and other key areas to create a healthy marketing department.
3. Future of Marketing
When I Heard the Learn’d Astronomer
BY WALT WHITMAN
When I heard the learn’d astronomer,
When the proofs, the figures, were ranged in columns before me,
When I was shown the charts and diagrams, to add, divide, and measure them,
When I sitting heard the astronomer where he lectured with much applause in the lecture-room,
How soon unaccountable I became tired and sick,
Till rising and gliding out I wander’d off by myself,
In the mystical moist night-air, and from time to time,
Look’d up in perfect silence at the stars.
4. Overview
• ROI - Define, Broaden, Reality, Time
• LTV - Life Time Value, Educate Others
• Benchmarks - External, Internal, Reality
MOVE FROM METRICS TO BUSINESS INSIGHT
5. ROI
•Defined as (Profit - Cost) divided by Cost.
•Tweak our formula to be even more specific
•Cost
•Time
•Profit
6. ROI - Cost
Cost is usually associated with the cash spent, but it can
also include an assortment of parameters:
• SaaS products specifically used
• Out-sourced creatives, development, etc.
• Image rights you purchased
• Legal compliance
7. ROI - Time
Time is one of the biggest factors when determining true
ROI. Is this based on 30 days, 3 months, or 3 years?
To help understand a fair time table think through several
factors:
• Sales cycle and add that to end of campaign
• MQL vs. SQL or a ratio there of
• Report in a pattern that fits product cycle
8. ROI - Profit
Profit can be determined simply or more detailed. Profit
should be determined based on cash calculations for the
company.
Brand, frequency of engagement could be factors only if
factoring these specifically, otherwise leave the metric
alone.
9. ROI Template
• Have model made before hand to plug and play
• Create stress test of numbers before decision
• Compare past performances to expectations going
forward
10. Educate All
• Meeting with superiors and team for buy in
• Create glossary that is included in each document
• Ongoing tweaks, ongoing buy in
11. Life Time Value
Calculated as:
Average Total Revenue - (Cost of Acquisition + Cost of
Maintaining)
Time = Lifetime
COA is average. LTV overall, channel, or timeline
COM is average over same duration, lifetime
12. Difference in ROI and LTV
• ROI is a metric at an exact moment. LTV is the true
reward for increased business.
• ROI works well for short term projects and experiments.
LTV is the mark to judge strategy.
• Using both gives a better understanding of the story and
its’ context.
13. Importance
• Numbers do lie. Definitions matter.
• Context creates better decision making
• Goal is always realism
14. Benchmarks
• External through tools like wordsteam.com
• Internal team over time
• Algorithm for forecasting marketing endeavors
15. What to Track
Here is a short list of various areas to benchmark:
• Time to launch average
• Teams channel averages: Adwords CTR, Media buy
CPM, etc.
• MQL to SQL - Ratios as well as results
• Historical numbers from other departments - customer
service effectiveness, sales’ team close ratio, etc.
• Ratings: Rate the areas 1-10 on how you did with
messaging, images, strategy, etc.
• Temperature of C suite and other stake holders
throughout the campaign process
16. Using Benchmarks
Internally, these are key statistics to compare quarter over
quarter. How is the team, as a whole, improving in these key
internal benchmarks? And just like crossfit, you have your
own personal records - which is a truer measurement for
progress and health.
All these stats help to quantify and justify the team’s growth
and development. Numbers don’t tell the whole picture but
can summarize some aspects of the marketing health and
the teams advances to real professional abilities.