As a marketer, you will experience many different types of chaos in a day.
The list could go on and on.
But this agile marketing metric system is designed to not only help you, but also please your clients!
What I’m going to show you is ways to critically marketing metrics that your clients actually want to learn about and get involved in.
Here’s the list of agile business metrics that any client would say “wow” after seeing…
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is a metric used to determine the total average cost your clients will spend to acquire a new customer.
To calculate this you will need to work with your client to get the total sales and marketing spend for a specific time period and then you will need to divide by the number of new customers for that period of length.
Sales and Marketing Cost= Program and Advertising spend + salaries + commissions and bonuses + overhead in a month or year
New Customers= Number of new customers in a month or year
Sales and marketing cost / new customers= CAC
CAC demonstrates how much your client is spending when they acquire a new customer.
Agency Percentage of CAC
Agency % of Customer Acquisition Cost is when your marketing agency’s portion of your clients CAC and is calculated as a percentage of the overall CAC.
To calculate this you will need to get your clients total marketing dollars sent to your agency and divide by their total sales including marketing costs.
Marketing cost / Sales and Marketing Costs= A%-CAC
This will show you how your marketing tea,’s performance has impacted your client’s customer acquisition cost.
Customer Lifetime Value (CLV)
Ratio of Customer Lifetime Value to CAC allows different companies to estimate the total cost that your client obtains from the customer compared to what they spent to acquire the new customer.
You calculate this by reducing the Lifetime Value, the CAC and then you will find the ratio of the two.
Lifetime Value (LTV) = (Revenue the customer pays in a period – gross margin) / Estimated percentage for that customer
If your LTV:CAC is high, your client sales and marketing team will have more ROI.
Time to Payback CAC
Once you are ready to payback CAC, this will show you how many months it will take for your client to earn back the CAC that they spent acquiring new clients.
You will calculate this by the time to payback CAC by taking the CAC and then you will divide it by your client’s adjusted revenue per month for an average new customer.
Margin-Adjusted Revenue = This is how much your client’s customer pays a month
CAC / Margin-Adjusted Revenue = Time to Payback CAC
The sooner your client pays back their CAC, the quicker he can start making more money from other customers.
Marketing-Originated Customer Share
The Marketing Originated Customer % is a ratio that shows which business is being lead by marketing. It determines the portion of the client’s total customer acquisitions from your agency’s marketing.
When trying to calculate this percentage, you take all the new customers from a certain period and figure out which one of them started with a lead by your agency’s marketing team.
New customers as a market lead + New customers in a month = Marketing Originated Customer %
This will show the impact that your marketing team has on acquiring new customers. This is a very good formula to figure out what type of impact you have on gaining new customers.
Influence Marketing Customer Share
The Marketing Influence Customer % gathers all of the new customers that your marketing team has interacted with during this process and anytime during the sales process.
To calculate this, you will need to gather the overall influence, get all the new clients you obtained in a certain amount of time, and then you will need to find out what percentage had any interaction with your team and see if it was while they were in the lead.
Total new customers that interacted with marketing / total new customers = Marketing Influence Customer %
Being so busy and focusing on all the data points, we tend to forget these types of things and these are what will help our clients the most.
You always want to make your client as pleased as possible and do everything you can to inspire them. Apply these digital marketing metrics to what you’re doing and you’ll see that your clients are actually new to most of these concepts…