5 Key Metrics Every CMO Should Be Tracking

In today’s data-driven world, tracking metrics is an essential aspect of any business’s success. For marketers and CMOs, tracking metrics is particularly important to measure the effectiveness of their marketing campaigns and ensure they are achieving their business objectives. However, it’s not just about tracking any metrics but rather tracking the right metrics.

Tracking the right metrics can provide invaluable insights into the performance of your marketing campaigns and help you optimize them for better results. And it’s also important to avoid falling into the trap of tracking vanity metrics, which may look good on paper but do not provide any real value and can prevent you from making true data-driven decisions.

Instead, it’s important to focus on metrics that are directly tied to your business goals and that provide actionable insights. In this blog post, we will discuss the five key metrics every CMO should be tracking and provide detailed tips on how to increase each one.

1. Return on Investment (ROI)

Return on Investment (ROI) is a financial metric that measures the profitability of an investment by calculating the ratio of the investment’s profit to its cost. In marketing, ROI is calculated by subtracting the cost of the marketing campaign from the revenue generated by the campaign and dividing the result by the cost of the campaign.

As a CMO, tracking ROI is crucial because it provides insight into the profitability of your marketing campaigns. If your campaigns are generating a positive ROI, you know that your marketing efforts are paying off. Conversely, if your campaigns are generating a negative ROI, it’s time to re-evaluate your marketing strategy.

To improve ROI, focus on optimizing your marketing campaigns. This includes targeting the right audience, creating compelling content, and optimizing your ad spend. Here are a few tips to help you improve ROI:

• Set clear goals: Before launching any marketing campaign, set clear goals that are specific, measurable, and achievable. This will help you effectively track your progress and see how far you’ve come.
• Target the right audience: Make sure you are targeting the right audience for your campaign. Use data and analytics to understand your target audience’s behavior and preferences.
• Create compelling content: Draft content that resonates with your target audience. Use storytelling, humor, or other tactics to create engaging and memorable content.
• Optimize your ad spend: Use data and analytics to optimize your ad spend. Focus on channels and campaigns that generate the most ROI.

2. Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) measures the cost of all the efforts you put towards acquiring a new customer. It’s calculated by dividing the total cost of sales & marketing by the number of new customers acquired.

Tracking CAC is important for CMOs because it helps determine the effectiveness of their sales and marketing campaigns. If your CAC is too high, it may be time to reassess your customer acquisition strategy.

To reduce CAC, focus on increasing the effectiveness of your sales and marketing campaigns. This includes targeting the right audience, creating engaging content, and improving your sales process. Here are a few tips to help you reduce CAC:

• Identify and prioritize the right audience: For CMOs, it’s important to channel resources toward the right audience. Identify and outline the target audience that actually has a need for your product/services. For instance, a website visitor that may have signed up for your blog or newsletter six months ago may not necessarily benefit from the content you are creating to engage a new website visitor. In this case, creating specific buyer personas and clearly defining the line between new, somewhat new, old, and somewhat old prospects, will help you in ultimately reducing CAC.
• Try affiliate partner programs: These are programs where your affiliates use their influence to help you engage with potential clients. Affiliate partner programs are an effective way to lower CACs as you only pay your affiliates a percentage-based commission after a customer buys from you, as opposed to the full cost of acquiring a customer.
• Work on customer retention: The average repeat customer spends
  67% more in the 31st to 36th month of their relationship
  with a business than in 0-6 months. It’s no secret that it costs way more to acquire a new customer than to retain an existing one. Therefore, it’s important to figure out what you can do better in terms of your product or service to continue bringing value to your customers, post the point of sale.

3. Conversion Rates

Conversion rates measure the percentage of visitors to your website or landing page that take a specific action, such as making a purchase or filling out a form. Tracking conversion rates is important because it helps you understand how effective your website or landing page is at converting visitors into customers.

To improve conversion rates, focus on improving and optimizing your website or landing page. This includes creating compelling content, optimizing your user experience, and improving your call-to-action. Here are a few tips to help you improve your conversion rates:

• Shorten the forms on your pages: If you have a long form, website visitors could either be hesitant to fill it or just won’t have the time to. When you shorten your forms, however, it builds trust among your audience that you don’t need a whole lot from them and are considerate of their time as well.
• Optimize your user experience: Make sure your website or landing page is user-friendly, easy to navigate, and visually appealing. Ensure that the page loads quickly and is optimized for mobile devices as well.
• Improve your call-to-action: Make your call-to-action clear and compelling. Use actionable language and visually-appealing design elements to encourage visitors to take action.
• A/B testing: Use A/B testing to experiment with different variations of your website or landing page. Test different headlines, copy, images, and calls-to-action to see what works best.

4. Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) measures the total amount of revenue a customer will generate for your business over their lifetime. It is calculated by multiplying the average value of a customer’s purchase by the number of purchases they will make in a lifetime.

Tracking CLV is important for CMOs because it helps you understand the long-term value of your customers. If your CLV is too low, it may be time to reassess your customer retention strategy.

To increase CLV, focus on building strong relationships with your customers. This includes providing exceptional customer service, offering loyalty programs and incentives, and encouraging repeat business. Here are a few tips to help you increase CLV:

• Provide unmatchable customer service: Make your customers feel valued and appreciated. Respond to their questions and concerns promptly and provide personalized support when necessary.
• Offer loyalty programs and incentives: Encourage repeat business by offering loyalty programs, incentives, and special offers to your most valuable customers.
• Cross-selling and upselling: Encourage customers to purchase additional products or services by cross-selling and upselling. Recommend related products or services based on their purchase history and preferences.
• Increase customer engagement: Keep your customers engaged with your business by providing relevant content, personalized recommendations, and social media engagement.

5. Social Media Reach and Engagement

Social media reach and engagement measures the number of people who have seen or interacted with your social media content. Tracking social media reach and engagement is important because it helps you understand how effectively your content is resonating with your target audience.

To increase social media reach and engagement, focus on creating engaging and shareable content. This includes using compelling visuals, storytelling, and user-generated content. Here are a few tips to help you increase social media reach and engagement:

• Use compelling visuals: Use high-quality visuals, such as images and videos, to capture your audience’s attention and encourage them to engage with your content.
• Use storytelling: Create engaging and memorable content that resonates with your audience with the power of storytelling. Use real-life examples, testimonials, or success stories to make your content more relatable.
• Use user-generated content: Encourage your audience to create and share their own content about your brand. This can help increase social media reach and engagement and build a sense of community around your brand.
• Engage with your audience: Respond to comments and messages promptly and engage with your audience on social media. This will help build trust and credibility with your audience.

Conclusion

Tracking key metrics is essential for CMOs to ensure that their marketing campaigns are effective in achieving their business goals. In this blog post, we discussed the five key metrics every CMO should be tracking and provided detailed tips on how to increase each one.

By tracking ROI, CAC, conversion rates, CLV, and social media reach and engagement, CMOs can make data-driven decisions and optimize their marketing campaigns for maximum impact.