Keep Your Key Marketing Indicators Simple

I find that many business owners aren’t that hot at tracking and measuring the important indicators of marketing success. When you are just starting out, perhaps you can get away with this, but as your business grows, analyzing key marketing indicators can mean the difference between smart growth and chaos.

Measuring and tracking sounds boring and complicated, so that’s the first hurdle when you address this topic. Most of the books on the subject of marketing metrics are so full of academic speak that they don’t provide much in the way of a simple and effective approach

I firmly believe that if you mine your data for just a handful of key indicators, you can create a dashboard of information that you can actually react to, impact on, and lead from. Keep it simple and build elegant processes to extract and monitor just a handful of key marketing indicators.

There are thousands of things you can measure, but growth objectives can be attributed to measuring just these four against a set of goals.

Lead generation – Where do the best leads come from? How many do you need to generate, and what actually generates them — if you don’t know this, it’s likely you will waste lots of money on things that are not generating the wrong kinds of leads, or potentially worse, abandon a lead generation tactic that’s actually working.

Percentage of leads converted – The biggest resource killer of all for businesses is chasing leads that are not qualified, not educated (by you, not in life), and not ready to appreciate the unique value your organization has to offer. When you measure this, you have to fix it. It’s too painful otherwise.

Cost per customer acquisition – Every new customer comes with a cost. By marrying that cost with some sort of value to the organization over time metric you can determine what you can actually afford to spend to acquire a new customer and go to work on lower what you need to spend while creating more accurate budget forecasts.

Average dollar transaction per customer – It’s is generally much easier to increase your revenue through additional sales to existing customers than to go out and find new ones. You can do this through one of two ways –- increase the perceived value of your offerings and raise your prices, or consider supplementing your core offering with products and services that meet additional needs.

As you can see, no rocket surgery with this list, but tell me, are you really measuring these four significant numbers? So often business owners and managers get caught up in trying to track so many metrics that it’s nearly impossible to focus on what’s truly significant.

So, what’s there to gain by focusing on these particular indicators?

Tripling or quadrupling your lead conversion number is usually the easiest thing to do once you start paying attention to it. It’s much harder, however, to significantly increase the number of leads. But through careful lead analysis you can greatly cut the cost per lead by making better lead spending decisions.

By creating a cost-per-customer-acquisition baseline, you can begin to budget and plan growth much more accurately than ever before.

In fact, this is where you can come full circle with your marketing measurement, because now when the CEO (or you) suggests that the marketing plan calls for 25% growth over the next 18 months, you can begin to tie specific marketing and sales activities and spends to achieving that result – or at least demonstrating why or why not it’s realistic.