Many stalwarts have succeeded in promoting their brands to great heights that these companies have carved a niche for themselves in the market scenario. Even a company on the brink is brought into prominence. How one might ask? Marketing plays a vital role in a company’s success, which explains why Apple and many of the most successful companies in the world do spend more on marketing and sales than they do on research and development.
There are several factors that do combine to create a successful as well as growing business. The respective company has to determine how much of their budget needs to spend on marketing?
Many feel that ten percent of the revenue must be spent on marketing. Nowadays, those with greater revenue are abandoning 10% rule in favor of bigger budgets and are focusing heavily on digital marketing.
Marketing does fetch a lot of revenue. Companies therefore do focus on marketing to improve their revenue prospects. Marketing influences corporate strategy and potentially leads to larger marketing budgets.
Marketing metrics are indeed at the core of any business program. Key marketing metrics do indicate the heights to which revenues will soar or the depths to which fortunes will go up due to strategic business efforts. The digital explosion has necessitated viable business and marketing strategies. The more revenue a company gets, it is in better position to spend on marketing strategies.
Identifying Key Marketing Metrics for One’s Business
1. Revenue growth
One needs to focus upon how much money has been gained from marketing strategies and tactics? Brand awareness has to be created and money has to be spent on such efforts.
Customers now indeed expect 24-7 hour service across the channels. They do switch over to a competitor and voice their opinions through the social media. This noticeable growth in competition and the consumer power has indeed eroded traditional product-based advantages. Digital marketers are spending a lot to retain their respective customers
ROI includes the impact of the holistic efforts of an organization. It involves multiple campaigns.
Measuring ROI from a marketing program does include:
- Incremental sales/revenues
- Gross margin percentage
- Total marketing and sales investment
4. Customer Retention Rates
The customer retention rate (CRR) is indeed achieved by a simple calculation of the customers the company does keep with respect to the customers at the start of the period. It includes new customers.
For new customer acquisition, importance has to be given to these areas:
- Number of leads that are generated (Lead generation)
- Closing rate (Lead nurturing)
- Revenue as per new customer (Lead quality)
- Average days that tend to close
- Customer acquisition cost (CAC)
To calculate CAC on has to look into gross margin of new revenue from a quarter minus the sales as well as marketing expenses in the preceding quarter.
One has to study the key marketing metrics for successful business growth and development. One has to understand appreciate the important metrics involved in business challenges and then deal with revenue growth and expenditure.