Thomas Cox By Thomas Cox • October 3, 2018

The only sales and marketing metrics that matter to your CEO [For B2B businesses]

This probably won’t surprise you, but your CEO is notoriously short on time.

Their attention is continuously torn between a thousand different things within the business. But their primary concern is one thing — whether the business is growing or not.

Those click-through rate stats? They may be important to you as a marketing metric, but to your CEO the sounds coming out of your mouth are complete fluff. Really, they want to be aware of whether they’re getting bang for their buck with their sales and marketing.

The numbers you will need to show are all tied to return on investment, and marketing and sales actions that are leading to conversion. The following are the main sales and marketing metrics that matter to your CEO. Take a look at our list and see if you agree:



Marketing

The only marketing metrics that matter to your CEO

Day to day, tactically, the role of a marketing manager is to ensure creative is working well, traffic is building, and leads are being generated. But a CEO will want to know:

 

Return on Marketing Investment

How much money is being poured into marketing, and how much is it contributing to overall revenue? Your CEO will want to know whether your PPC, social ads, and resources are going to good use and providing sales the leads they need. Of course, before delivering this figure, a goal figure will also need to have been introduced beforehand.

ROMI calculation formula

(Sales Growth - Marketing Cost) / Marketing Cost = ROI



Cost Per Acquisition (CPA)

This will give your CEO an overall understanding of the profitability of each campaign, and the cost it takes to bring in a new lead. For a more tactical picture, you may also want to attribute this formula to each channel. If your CEO also wants to know the CPA for each channel, you will want to first understand the slow-burn that tactics such as blog writing and SEO can take, if they don’t already know.  

CPA per campaign formula

Total Campaign Cost / Conversions = CPA



Customer Lifetime Value

CLV is the single most important metric for understanding your customers. It predicts the total revenue a business can reasonably expect from a single customer account. Marketers can use this formula to assess the performance of campaigns that turn one-time purchasers into repeat customers, by seeing what impact it had on the average CLV of the segment of customers you are targeting.

Simple CLV formula

(Annual profit contribution per customer) X (Average number of years that they remain a customer) — (The initial cost of customer acquisition) = CLV.

 

Sales

The only sales metrics that matter to your CEO

It may be a sales manager’s role to look after factors like sales floor productivity and sales strategy, but the CEO will want to know, financially, what their efforts have led to. If the team is over or underperforming, then the CEO may ask the ‘softer’ questions about activity and implementation, but for now, stick with these headlines for sales performance:  

 

Average close rate

A close rate — also called a win rate —  is the number of deals a rep closes compared to the number of contacts they make. It’s a very simple figure: if a rep makes 100 calls a week and closes 20 deals, their close rate is 20%. Often, it is best to take this figure from the proposal stage, rather than all opportunities that enter your sales pipeline.

Sales close rate formula

Number of quotes / number of sales



Average Sales Cycle

This shows how long, on average, it takes for a rep to close a deal. It can then be used as a comparison against other deals.

Average sales cycle length formula

(Opportunity close date-opportunity created date)/ Number of closed opportunities



Attained to Forecast

This metric is measuring the amount attained compared to the sales forecast and company plan. It is important to look at this metric in both gross and net revenue so that a company can get an understanding of historical sales as well as what the real growth numbers are. It can also show if salespeople typically forecast too high or too low.

Attained to forecast ratio

Amount of revenue generated through sales / amount forecast



Conclusion

These sales and marketing metrics should work as the ‘headlines’ when you’re reporting in to your CEO regarding revenue-generating performance.

Of course, underneath this, sales should be able to talk about metrics that report more on the strategy and tactics implemented, such as sales productivity and average deal size, and marketing should be able to report on marketing qualified leads generated, and traffic generated.

With these figures in place, you can begin to build the picture of how both sales and marketing are building a funnel that grows the business. And (hopefully) your CEO will be pleased with the results.   

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