Following up my post, Why ratios matter in marketing, here are some of the ratios I regularly monitor.
- CAC:LTV. The so-called "magic number" for SaaS businesses. If you're not familiar, this SaaStr podcast with Dave Kellogg is a must.
- Lead:MQL conversion. I use conversion ratios through the entire funnel, starting with the number of "raw/unqualified" leads who enter the pipeline and who then become MQLs.* The results show in very clear terms the effectiveness of the marketing activity that moves the needle.
- MQL:Closed/Won conversion. As marketing becomes more involved in all stages of the funnel, I like to know how many MQLs become revenue generating business. (There is an argument that marketers should carry revenue targets in their compensation. That's for another day.)
Other important metrics
- Lead Velocity Rate (LVR). Depending on the business model, how quickly I qualify a lead is important. As a general rule, I would rather qualify a lesser number leads more quickly and more frequently, than a larger number of leads over a proportionally longer period of time. Speed wins.
- Revenue/Visitor. A reason that marketing could/should carry revenue in comp plans, is that it guarantees tight alignment with the sales org. Revenue generated per site visitor is interesting in that it directionally tells me whether a wide range of on-site activities are working.
- Revenue/Lead. Similar to the MQL:Closed/Won ratio, the actual revenue generated per lead is helpful in ensuring the marketing org is focus on the metric that matters most to business. Revenue.**
Ping me on Twitter @robertcollings if you think there's an important ratio I missed.
* I actually start measuring the number of site visitors and ratios to bounced, to engaged, etc. In other words, as soon as a visitor hits the site I measure.
** Revenue vs. Brand ... Brand is built over a lengthy period of time by delivering a consistent message to market. By keeping our promises. By not hyping (lying about) our solutions. By being honest, engaged and caring for our customers. If as a marketer I deliver revenue generating activities with this in mind, brand takes care of itself.
A caveat on "brand takes care of itself." There are obviously activities you can do to build brand: deliver thought leadership, engage with the community around your product, have a clearly defined and unique voice, ensure all customer engagement is a seamless, fun experience. I consider these fundamental to modern marketing, but just in case they needed to be stated.
Subscribe to Rob Collings Words To The Wise
Get the latest posts delivered right to your inbox