As CEO, you're pushing hard to grow the top line as fast as possible while staying vigilant on costs. What if there were a way to accelerate top line growth not by spending more, but by simply getting significantly more out every dollar your company is currently spending?
One huge opportunity to get a lot more bang for your buck is your company's marketing investment. Historically, you and your CFO have probably had a very difficult time trying quantify and measure the return on investment (ROI) for your marketing spend.
Nothing is more frustrating than not being able to get solid answers to simple questions like:
- "Is my company’s current marketing spend effective and efficient?"
- "How could we improve the efficacy of our marketing programs"?
- "Did that recent marketing campaign work in driving business?”
- “How could we drive more leads for the sales team with the money we’re spending in marketing?"
You're not alone-we hear this from CEOs all the time. So just how do CEOs know if their marketing is working?
What is exciting with the migration of your customers online is that with digital marketing, everything is trackable and measurable. Which means that with the right systems in place-specifically a marketing database and a sales (CRM) database that are connected and share information bi-directionally-and the right alignment between sales and marketing (see http://www.philharrell.com/blog/sales-and-marketing-dont-communicate ) you can measure the ROI of your marketing and hold your VP of Marketing accountable to key performance indicators (KPIs) that measure what impact they're having on driving revenue.
Assuming you have the marketing and sales databases in place and you've got sales and marketing aligned, here's how you should analyze the effectiveness of your current marketing investment:
- Cost per lead-how many leads is your marketing team generating for the sales team and what is the cost per lead? How does this stack up against industry benchmarks?
- Cost of customer acquisition (CAC)->how much did it cost to generate these customers? How does this stack up against industry benchmarks?
By using these metrics as a way to analyze the effectiveness of your current marketing spend, you can begin to push your VP of Marketing to develop a plan to improve the results you drive with your marketing dollars. For example, you could ask her, "How do we:"
- Increase by 2x the number of visitors to our web site?
- Increase by 2x the number of leads that we capture?
- Reduce by 2x our cost per lead?
- Reduce by 2x our cost to acquire a customer (CAC)?
Are you holding your VP of Marketing accountable? What metrics are you using to evaluate the effectiveness of your marketing investment?