5 metrics management cares about

There are a lot of metrics that a Digital Marketer can report on. We can talk about different conversion rates - click conversion from ads, website conversion, lead conversion and even sales conversion too. And that’s only 1 metric!

But what does a leadership team really care about? Do you think they have time to go through a 60 page document every month? Or would they be more interested in a one-page summary of the month calling out the key metrics that matter to them?

We’ve broken it down to 5 key metrics that your exec team should be interested in, and more importantly why they matter. It’s crucial to understand what these metrics mean, not just what they stand for but why and how they can impact the business.

Conversion Rate - CVR

A CVR generally refers to the percentage of times your goal was met - this can be sales, leads, clicks. The percentage itself is calculated against the total number of times that your ad was clicked on. However, CVR in marketing doesn’t always refer to advertising clicks. It can also refer to Website CVR. Website CVR is the percentage of visitors that submitted a form OR, purchased onsite, over the total amount of site visitors. Now we know it’s starting to look more mathematical than marketing, and in some ways it is - but the CVR you need to measure all depends on the goal that you’re showcasing.

For example if you want to measure how well an ad is performing you could measure the CVR of sales or leads generated from the ad itself. Whereas if you want to measure how engaging your website is, you would need to look into the CVR of goals met, compared to web visitors.

CVRs are particularly useful in highlighting if there are any breakdowns in your marketing processes - for example if your CTR of web traffic is high and CVR onsite is low, it might indicate your ads are working, but the content on the site is misaligned to the audience captured. In essence CVR can highlight how engaging your content is to your audience and where they are likely to take or not to take action.

Cost of Acquiring a Customer - CAC

CAC is basically your cost of acquisition, broken down to the customer level. This metric is important to leadership teams as it can highlight the acquisition cost of different products and services if you’re able to measure CAC by product. This is crucial in identifying cost efficiencies at a product level - for example if your CAC is really high but sales is low, it could indicate that the product isn’t profitable or subject to wasted spend.

Depending on your business model and level of visibility you have, CAC should include factors like marketing team salaries and software subscriptions - it can be completely inclusive of all costs, or segmented to marketing outgoing costs only. Either way it’s important to know what costs are being measured.

Return on Ad Spend - ROAS

ROAS shows overall revenue earned per advertising dollar spent. ROAS can sometimes be confused with ROI however, one measures the return on ad spend specifically, and the other measures the return on any investment you choose to measure.

ROAS is a very specific marketing metric that identifies how efficient your campaigns, advertising and paid efforts are. ROAS is calculated using spend and revenue - for example if I spend $10,000 advertising for product 1 and revenue totals $40,000 - your ROAS for product 1 is 4 - the return on ad spend is 4x or 400%.

ROAS is a great metric to determine if and where you can shift budgets around. If ROAS is particularly high (usually in your flagship product) it makes sense to increase spend in this area if your key goal is to increase revenue. You’ll also find ROAS might be low for new products or services too, it’s important to remember that ROAS will generally take some time to build up depending on market demand and product fit.

Click-through Rate - CTR

Like CVR, CTR can have many uses too. The foundation of a CTR is that it determines how many clicks versus impressions something received - that can be an ad on social media, a search ad or a pop-up on a website. Your CTR is valuable as it measures the propensity of your audience to take action. Your marketing efforts should all be geared towards moving the audience to the number one thing you want them to do - whether that’s to make a purchase, give you their email or click a button.

This particular metric is important to your leadership team as it showcases how well your content performs - it might be your website, a blog piece, your social media channels - CTR performance can apply to many areas.

Cost

We all know cost is important. It’s not only about how much we’ve spent, but how much we’ve spent in relation to how much we’ve sold. If cost is high, and ROAS is high - that’s a good news story. But if cost is high and ROAS is low, then we need to identify the problem.

Yes, cost is about dollars spent. But in combination with other engagement metrics, it can also tell you how well a product or activity is performing - which is vital information in aligning your marketing efforts to what your audience responds to.

So there you have it. We hope you’re ready to pull those monthly reports together with a little more confidence!

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