4 ROI Metrics Your CEO Will Ask About [And how to be prepared to answer]

In the past marketers relied solely on outbound push strategies, pouring money into interruption based lead generation activities like buying email lists, cold calling, executing mass mail campaigns, and buying advertising space. These efforts aren’t only expensive, but hard to measure and difficult to control. Additionally, there isn’t any long-term value associated with outbound marketing efforts. The moment you stop an outbound campaign, the leads stop coming in.

Inbound marketing relies on attraction, instead of interruption. Inbound marketing methodology is based on four core actions: attract, convert, close, and delight. Inbound marketers provide content like blog posts, whitepapers, webinars, or eBooks designed to appeal to their ideal customer. Each piece of content that is created becomes a long-term asset that will continue to attract leads far into the future. Unlike outbound marketing, inbound marketing is both easily controlled and measured. With the help of inbound marketing software like HubSpot marketers can measure the results of every touchpoint, from social media engagement and landing page conversions to email open rates and link clicks.

Most marketers have dipped their toe in the water by measuring some basic metrics like unique website visitors and pageviews, but few have reached a point where they can prove marketing’s contribution to the bottom line. Data-driven CEOs want to see the real numbers behind their investment in marketing and it is up to the marketing team to figure out how to measure and prove the results.

If they haven’t already, your CEO is bound to ask you about these 4 metrics:

1. Cost per Lead (CPL). How much do you spend to acquire a new lead?

Before you go bragging about how many leads you have generated take a step back and calculate your CPL. Understand that CPL varies by lead source- social, SEO, webinars, each inbound strategy delivers differently. When you get drilled with this questions be armed with the data to show how inbound marketing delivers a lower cost per lead than traditional outbound techniques like trade shows or direct mail. Cost per Lead = Cost of Generating Leads / Total Leads Acquired

2. Customer Lifetime Value. How much profit does the average customer generate for your company?

Understanding your CLV can help guide your investment in marketing. If you understand how much each customer is worth and the likelihood of repeatable business you can work backwards and figure out how much you are willing to spend in order to attract a new customer. Customer Lifetime Value = Gross Margin x Repeat Transactions x Average Retention Rate

3. Cost per Customer Acquisition. How much does it cost to convert a lead to a customer?

CCA is a combination of the cost to attract a lead and the costs associated with converting that lead into a customer.


As you can see in the “Good Business Model” the goal is for the customer lifetime value to exceed the cost per acquisition. In order to learn if you’re acquiring new customers in a cost effective way, calculate the following: Cost per Customer = Total Spend to Convert Leads / Total Customers Converted

4. Lead Conversion Rate. How many of your leads turn into customers?

Your lead conversion rate indicates your effectiveness in moving leads through the various customer lifecycle stages. You can measure the conversion rate between each stage of the customer lifecycle to identify if leads are stalling in certain lifecycle stages. The conversion process often relies on the coordination between marketing and sales. Conversion Rate = Total Customers / Total Leads Responsible marketers continuously monitor the performance of their inbound marketing efforts to prove the ROI of their investments. What to learn more about the ROI of inbound marketing? Download our Measuring the ROI of Inbound Marketing Whitepaper and learn the difference between outbound and inbound metrics, how to plan for inbound marketing ROI, and how to measure the success of your inbound funnel.

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