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5 Marketing KPIs the C-Suite Actually Cares About — & How to Calculate Them

It’s an unfortunate truth that many marketing leaders still feel like they’re under the microscope when it comes to proving the worth of their entire department. In fact, you may have heard the often-touted statistic about the relationship between CEOs and CMOs: 80% of CEOs don’t trust the work done by their marketers (to put this in perspective, 90% of those same CEOs trust and value their CIOs and CFOs).

Historically, one of the biggest contributors to this distrust has been the lack of insight into the success of marketing efforts. To put it delicately, the C-suite could probably care less about the latest click-through rate of your email or PPC campaign (not to say that isn’t important). They’re looking for cold hard numbers that indicate you’re impacting revenue.

As a fellow marketer, it’s disheartening to see a statistic like that — but it’s been two to three years since the original study that surfaced the above statistic, and my hope is that marketing has come a long way since then (you know how fast the industry moves!). Fortunately, with the widening adoption of closed-loop reporting systems like marketing automation, it’s getting easier to track and provide these numbers.

The question is, which metrics should today’s marketers be prioritizing to showcase their success? Take a look at the list below to see which metrics your CEO actually wants to see (keep in mind that some of these metrics may be better suited to your business and marketing program structure than others).

Your Annual Contract Value

How much in annual contract value (ACV) resulted from direct marketing sources?

Your ACV is a great measure of how marketing is contributing to the business. To get this number, you’ll want to look at the contract value of all opportunities generated by marketing within a given time period. For example, for the month of January, monthly pipeline would show that marketing sourced X number of new opportunities, worth $X. This dollar amount can prove to upper management that marketing is directly responsible for that amount of recurring revenue.

The Percent of Customers Directly Sourced by Marketing

What percentage of new customers were sourced by marketing initiatives?

If you would rather look at things as a percentage, this metric will show what percentage of new business was sourced by marketing in a given time period. Take all of the new customers acquired in a month/quarter/year/etc, and see what percentage of them started as a marketing-sourced lead. This is a great indicator of how marketing is impacting overall customer acquisition.

The Ratio of Pipeline to Spend

For every dollar spent by marketing, how much pipe was created?

The pipeline-to-spend ratio compares the cost of each campaign to the opportunities that were sourced by that campaign. To get this metric, sum up the ACV of all of the opportunities sourced by a specific campaign and compare that number with the total spend. In order to say that the campaign was a success, you’ll want at least a 1:1 ratio.

Customer Acquisition Cost

How much does it cost you to acquire a customer?

Of all of the metrics on this list, this is the one you don’t want to go up, which means it’s definitely worth keeping an eye on. A rise in the cost to acquire customers should be a red flag. To calculate your customer acquisition cost for a certain time period, add up all of the campaign spending, advertising costs, sales and marketing salaries (or commissions) — anything that contributes to your overall sales and marketing costs. Then, divide that by the number of new customers in that time period.

The Percent of Customers Influenced by Marketing

What percentage of acquired customers interacted with your marketing programs?

The percentage of customers directly sourced by marketing is a great metric to have, but some people are equally or more interested in marketing influence. The percentage of customers influenced by marketing instead looks at how many customers were touched by marketing at any point during the sales process. These leads don’t need to be sourced by marketing, just influenced by a marketing program at some point during the customer acquisition process.

Each of these five metrics will give your CEO a much more accurate (and meaningful) picture of marketing performance. Are there other metrics that you track at your company? Let us know in the comments!