A recent CMO survey showed that marketers rank their analytics and measurement capabilities among the lowest of all skills. Amidst growing pressures to prove ROI and measure everything, marketers are bombarded with dashboards and datasets, but often lack the correlations needed to make true inferences, missing key insights that can help drive smarter strategies.
Forrester analyst Jim Nail sums up the modern communicator’s dilemma. We are “held to an ever-higher standard of accountability to ROI and business impact. But many marketers struggle to meet these expectations, hampered by long-established habits and lack of knowledge about new data- and analytics-enabled measurement approaches.”
Of course, some of the long-established metrics in a marketer’s playbook, like conversion rates, cost per acquisition and qualification rates, are very much still at play. But there are also several metrics that marketers don’t commonly pay attention to – or even consider part of their job function – that they should add to their playbooks in 2019.
- Employee retention/turnover. Yes, this metric has long been the domain of human resources, and functionally, it always will be. But that doesn’t mean communications teams should ignore it. Marketers should be paying keen attention to internal morale as shown in retention and turnover. Why? According to Gallup, companies that prioritize employee engagement see 147% higher earnings per share compared with their competition. Employees can be a brand’s top ambassadors, so an uptick in turnover can be a signal to marketers that they need to prepare for troubling headwinds.
Marketers have a role in employee engagement. Launch that exciting new creative internally first. Share that raving testimonial with employees in addition to externally. If marketers pay attention to their role in the employee retention process, it will pay off in the form of an engaged workforce that amplifies brand awareness and converts customers.
- Customer retention and churn rates. Marketers and their superiors are often hyper-focused on lead generation and new business. In fact, marketers’ entire performance evaluations are often made through this lens, examining how many people are entering the marketing funnel and how many are converting into customers. These measurements are certainly relevant – but shortsighted, ignoring two critical marketing truths.
- Acquiring a new customer is at least 5 times more expensive than retaining an existing one. In a profession so dominated by ROI discussions, these measurements are often focused on singular transactions (which is the impetus behind the third metric, below).
- Just like employees, existing customers are some of a brand’s best referral sources. Buyers trust their peers much more than they trust companies.
By monitoring customer retention rates, marketers will have a better understanding of the potential of their word-of-mouth network and can identify issues in customer engagement efforts that might impact both new sales and recurring purchases
3. Customer lifetime value (LTV). This one certainly gets a lot more play in terms of marketing theory and discussion, but all too often is overlooked in practice. In fact, eConsultancy found that only 11% of organizations had strong confidence in their LTV metrics. While customer acquisition cost (CAC) measurements are prevalent, it’s impossible to set meaningful goals for CAC without a true understanding of lifetime value. Yet marketers are often focused on reducing cost per acquisition without weighing that metric against lifetime value. An acquisition cost of $100 is extremely high for software that’s only $9.99 per year. Customer retention would have to be very lengthy to justify such an acquisition cost. However, that same cost per acquisition is more than reasonable – even low – for enterprise tech contracts valued at thousands of dollars a year.
As communications professionals continue to adapt to a metric-obsessed mindset, expanding their toolbox to include measurements on their top brand ambassadors – employees and existing customers – and looking at long-term value in addition to short-term wins will help them to create a successful game plan.