Gauging the effectiveness of marketing continues to be a challenge, but this is especially true of companies whose marketing activities support retention or upsell within existing accounts. But vague metrics can become manageable once marketers set specific goals. ?
“There are tons of options ?for measuring customer marketing, but the key is setting a goal, then defining what metrics will show progress toward the outcome as well as the outcome itself,” says Megan Heuer, service director of marketing operations strategies at SiriusDecisions. “When companies struggle with quantifying the value of customer marketing, it’s usually because they start ?by picking a tactic, such as an event, then executing it, and only afterwards hoping to see if it helped in some way.”?
Heuer points to such factors as response to marketing outreach or participation in events or social communities as ways to measure customer engagement, or the generation of demand for additional products and cross-department sales. Then there are those customers who become so enthralled with a brand that they spread the word among their friends, becoming brand advocates.?
“Add-on sales are a good way to gauge how frequently they are buying and how much more they are spending, whether they are buying more of the same thing or buying additional products and services,” says Christopher Ryan, CEO of Fusion Marketing Partners and author of How to Create an Unstoppable Marketing and Sales Machine. ?
Ryan says that the marketing dollars required for each step from customer to repeat customer to brand advocate get progressively lower. While the cost to land a new customer can run as much as half of revenue, or even more, an effective retention effort will be closer to 20-25% or less. ?
“If you have the ability to sell existing customers, that lowers your cost of acquisition for the new sales dollar,” Ryan says. ?
For retention metrics, mark-eters can measure against the percentage of customers they are retaining and what level of spend they are currently at, comparing this both to past retention levels and the industry average. For example, software companies generally maintain a retention rate of 90% or above, so any comp-any achieving even better numbers than that will know its marketing efforts are ?paying off.?
“The huge focus right now is on customer data integration,” says Donovan Neale-May, executive director of the CMO Council. “Marketers have to be more effective at increasing the yield from those accounts. This comes from having access to customer data, tools and the right knowledge to know what you’re looking for.”?