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3 Key Metrics to Track the Business Case for Communication

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As a communication leader, you know the value you bring to your organization. But how do you demonstrate that value to the C-suite? They want to see what the dollars spent on advertising, marketing, content and PR brought to the company in terms of sales, clients, visitors and goodwill—and it’s up to you to prove that impact in a tangible way.

Before tracking a bunch of different metrics, you should sit down with your C-suite and determine the key performance indicators, or KPIs, you are going to track. KPIs are a quantifiable measure to help judge the success or failure of a campaign or advertisement. By setting these benchmarks, you’ll be able to determine outcomes once the data comes in.

This alignment is critical, says Katie Paine, CEO of Paine Publishing, a communication measurement consultancy and publisher located in Durham, New Hampshire. “The biggest failure in my world in terms of getting measurement wrong is when the communication person thinks they should be measuring one thing and the CEO thinks they should be delivering something else,” she says.

Here are three metrics to consider tracking.

Customer acquisition cost

What is it?

Also referred to as cost of acquisition, it is calculated by dividing the total amount of expenses to acquire a customer by the total number of customers acquired over a given period of time.

Why is it good to track?

“Acquisition costs are absolutely a critical piece, if you can credibly calculate them,” Paine says, adding that it’s a difficult task to calculate all the costs in customer acquisition. She believes the right way to do it is to simply factor in all the costs associated with an acquisition—assuming that you can track all the touchpoints that brought in that lead or customer. That would include salary of your personnel, marketing expenses, agencies hired and any other associated costs.

Once you learn your cost of acquisition, Paine says you can determine if it is, for example, more cost-effective to pay for an Instagram influencer or host a PR event.

Conversion rate

What is it?

A conversion is the percentage of visitors who take a desired action.

Why is it good to track?

Tracking the conversion rate is excellent for measuring the performance of your webpages and apps. With conversion rates, you can see where customers are coming from, what marketing materials they are interacting with, if your communication efforts are generating leads and a whole slew of other information.

Angela Sinickas, CEO of Sinickas Communications, an international management consultancy focusing on communication research and strategy, has worked for clients in 32 countries. She says, “Part of our job is to tell people, ‘Yes, we not only generated these leads for you, but here is how many came from each different source.'”

Parameters can be set from links to your webpage. How did visitors arrive there? Did they come from an ad, your newsletter, a blog post or a social media conversation? Knowing the conversion rate of each source helps you make smart decisions with your budget and communicate results clearly at reporting time.

MROI

What is it?

Marketing return on investment, or MROI, is a value associated with a specific marketing campaign. You take the total cost of the marketing effort and subtract it from the financial value gained from the marketing effort.

Why is it good to track?

Sinickas, an IABC member since 1979, says, “You only need two numbers in order to calculate ROI. One is the financial value of that behavior change, and the second is the cost that it took you to get that behavior change. And most of us know the cost of our communications, whether it is a hard-dollar cost for something we paid for or it’s our salaries, so it’s a very easy formula for calculating ROI with just those two numbers.”

Calculating return on investment is perhaps the clearest metric to communicate the success of a campaign. Using dollars and cents, CEOs and the rest of the C-suite can easily see the value in a language that makes sense to them.

By choosing the right metrics, aligning with stakeholders in your company and clearly communicating the data, you can demonstrate the value of your efforts and set your team up for future success.

Michael Tomko

Michael Tomko is a freelance writer and owner of Tomko Productions.

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