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Before the advent of big data, marketing functions were largely focused on creating brand awareness through mass-market promotional efforts. Usually, these campaigns would be directed by gut instinct rather than any sort of quantitative analysis. As a result, it was often impossible to derive any insight into the sales growth they brought to the business. Understandably, the lack of clear value offered by these campaigns would often leave CEOs wary about investing in any further marketing.

Over the past decade, however, the landscape has undergone a seismic shift. Gone are the days when scattershot advertising and vague measurements could produce a successful marketing campaign. The introduction of multiple new digital touchpoints in the customer journey has created a far more complex sales cycle and brought a massive influx of data into the enterprise alongside.

In order to make sense of the sheer volume and variety of information now available, CEOs must pay close attention to the marketing metrics which make a real impact on the profitability and competitiveness of their organizations. Here some key digital marketing indicators that every CEO should be keeping an eye on.

Customer Acquisition Cost (CAC)

As the name suggests, this metric denotes the average cost of acquiring a new customer. It is calculated by dividing the total marketing and advertising costs (including salary) incurred over a specific time period, by the number of customers acquired over the same period. The ability to directly relate the number of customers acquired to a specific marketing investment has only become possible very recently with the arrival of user tracking tools that can follow a prospect from lead to revenue.

For CEOs, this metric provides the most effective measurement of investment against return, showcasing the actual revenue created by the company’s marketing efforts. If the amount of value generated by promotions and advertising isn’t in line with expenditures, then the campaign will need to be either optimized to create greater sales, or scrapped altogether.

Customer Lifetime Value (LTV)

According to research group Gartner, a mere 20% of repeat customers account for over 80% of business profits, which just goes to show how important long-term customer relationships can be for any organization. In today’s hypercompetitive business marketplace, organizations are forced to dedicate more and more resources towards customer service and retention programs. The efficacy of these investments is clearly shown through lifetime value metric.

The easiest way to calculate the LTV is by taking a sample of customers, and recording their average spending over a set period of time, minus the gross margin. Divide this figure by your retention rate over the period (subtract the number of customers at the end of the period, from the number of customers acquired during the period, and divide by customers at the start of the period). Divide the resulting LTV figure with your CAC, and you can compare the value created by the customers over the period, versus the cost incurred to acquire them.

A value greater than three generally indicates a high ROI on customer investments, but anything over this figure may point towards unfulfilled opportunities for further growth.

Website Traffic

On their own, website traffic figures reveal little about the success of your marketing efforts, after all, without context, a click will not tell you anything about the purchasing intent of the user. However, if you’re able to track your visitors based on traffic sources, then you will be able to develop a much clearer image of which investments are yielding the greatest return.

By identifying whether prospects came to your site via an organic search engine result, a paid advertisement, a social media link, an email referral or a Youtube video you can work to optimize your clearest path to creating conversions.

Conversion Rate

For digital campaigns, a conversion rate measurement based on the number of sales created through referral links will give you directly attributable information about the ongoing success of the campaign. To keep track of this figure, simply divide the number of website visitors gained from the marketing effort, by the number of sales conversions created through the CTAs on your landing page.

Social Media Engagement

Unless you run a massive multinational corporation, and employ every analytics tool known to man, it can be extremely difficult to track conversions directly to social media marketing efforts. According to new research from eMarketer, less than 20% of B2B marketers are able to measure the ROI of their social media campaigns. Simply put, the analytics data provided by these platforms is insufficient to foster any real understanding of the revenue generated by social media marketing.

Yet, any organization would be foolish to overlook the importance of social media in interacting and communicating with established and prospective customers. So how can you derive any insights into the value of your social media presence? Through the only clear metric, you do have available, that is social engagement.

By keeping track of the likes, shares, retweets, and subscriptions generated by your content, you can gauge how successful your online engagement strategies have been in transforming customers into full-on brand advocates.