5 Marketing Metrics That Every Cybersecurity CMO Should Track
How well is your company’s marketing functions performing? Do you know for sure or are you just guessing?
Marketing is an investment with the potential for high returns. But a smart cybersecurity CMO should communicate key performance indicators (KPIs) to help communicate the success of their team and to justify requested headcount and budget resources.
If you don't know what marketing metrics to track, how can you be sure that your company's marketing strategy is working? It’s like trying to fly an airplane from one coast to the other without functioning gauges.
The following five metrics will help any cybersecurity CMO track their KPIs and achieve the ROI they deserve from their departmental budget. Keep reading to make sure you’re making the most of your company’s marketing investment.
What Are Marketing Metrics?
Marketing metrics are numbers that represent the performance of a company's marketing activities. Your marketing metrics must be:
Actionable. Marketing metrics should tell you something about how to improve your current strategy or inform a future tactic. For example, actionable metrics can tell you which marketing channels are most fruitful.
Auditable. Marketing metrics must be measurable so you can see any discrepancies between what you expected and achieved. You can identify those reasons and address them. For example, auditable metrics can show you which campaigns are underperforming.
Predictable. Marketing metrics should be able to show that your marketing efforts will provide a positive return on investment (ROI). Metrics are capable of demonstrating this in advance. For example, predictable metrics help you get the results you want from your team before investing more time and resources.
If your metrics hit these three criteria, you're on the right track!
Why Are Marketing Metrics Important for Cybersecurity CMOs?
Simply put, when you know your numbers, you understand what levers to pull to make improvements. And you also know how to justify your team’s work to other decision-makers.
The difficulty that most cybersecurity CEOs face is they don't know their company’s marketing ROI. You often forget about marketing efforts long before customers pay for a company's products or services.
CMOs are usually well versed in digital marketing metrics. They provide insight into marketing's performance and contribution to the bottom line.
With a careful eye on these metrics, you can determine the areas that need improvement and which ones are doing well. Marketing metrics help CMOs track how effective different types of campaigns are at generating revenue.
Tracking marketing metrics also helps CMOs build stronger relationships with sales teams. It helps them understand how their department fits into the larger picture of company goals.
What Marketing Metrics Should CMOs Track?
The five most important marketing metrics to track are:
- Customer lifetime value (LTV)
- Customer acquisition cost (CAC)
- Conversion rate
- Churn rate
- Marketing return on investment (mROI)
Here’s what you need to know about each metric to get the most out of them.
Customer Lifetime Value (LTV)
LTV refers to the value of a customer from acquisition till the point where they stop being customers. Marketing lifecycle changes as customers transform into prospects, then leads, and finally customers.
This marketing KPI helps CMOs understand how much budget they need for marketing to acquire one new customer. This can also be expressed as cost per lead or cost per acquisition. LTV is usually an important metric to understand marketing's contribution to the bottom line.
Customer Acquisition Cost (CAC)
CAC is the average cost of acquiring a customer. It's an important KPI because it helps you understand how much money your company spends to acquire new customers.
Conversion rates are KPIs that show how well your website converts visitors into leads, leads into marketing qualified leads (MQLs), MQLs into sales qualified leads (SQLs), SQLs into forecasted sales opportunities, and sales opportunities into customers. The higher each conversion rate, the more it bodes well for marketing.
Churn rate refers to how many existing customers you lose each month. Customer churn can be due to:
- Defects in a product or a service offered by the company
- Unhappy customers who feel that they've been overcharged or cheated out of something
- Loss of interest in the company's products and services
Churn rate is particularly useful to marketing organizations that dedicate one or more individuals to monitoring satisfaction among existing customers. Such people are particularly helpful to cybersecurity vendors with SaaS-based products that are offered on an annual subscription basis.
Marketing Return on Investment (mROI)
mROI is the ultimate marketing metric. It describes marketing’s overall return on investment on behalf of the company. If mROI is 75%, for example, then for every $1 spent on marketing, $1.75 in bookings is achieved.
To calculate mROI, you’ll need to know the percentage of bookings (i.e., closed-won sales opportunities) that were initiated through MQLs and, separately, the percentage of bookings that were nurtured by marketing campaigns during sales cycles. (You’ll need to make an assertion for how much credit marketing gets for nurturing leads.)
How Do I Roll Up Marketing Metrics into Marketing KPIs?
Understanding marketing metrics is essential to helping any cybersecurity CMO grow their team and obtain adequate funding. But they're only useful if you can communicate them in a manner that will influence C-level executives.
To make metrics easier to understand, marketing leaders should break down activities into three types of KPIs:
- Acquisition KPIs, including lead generation rate (e.g., leads/month), cost per acquired customer, or marketing cost per lead
- Retention KPIs, including customer retention rate (e.g., percentage of customers retained per time period), churn rate, and LTV
- Expansion KPIs, including metrics that show that your existing customers are growing with regard to products and/or services used
Ready to Level Up Your Marketing Metrics?
Understanding and communicating your marketing metrics is the best way to level up your marketing strategy. If you’re not sure where to start, CyberEdge can help.
CyberEdge provides Interim CMOs, Interim Digital Marketing Managers, and go-to-marketing planning services to help cybersecurity marketing teams identify and track metrics and KPIs more appropriate for monitoring the performance of your company’s marketing function.
For more information on these and other services, request a 20-minute consultation today!
Work outside the cybersecurity industry? Visit the LeadingEdge Group website.