Translating Marketing Metrics to Financial Metrics That Matter to Your Boss

Marketers have more ways than ever to connect with their audience. But with every new channel or tactic, you end up with more and more new data to collect. If you’re not careful, you end up with a mountain of information too overwhelming to wrangle, leaving you struggling to figure out which data points are actually worth reporting on.  

Now’s the time to step back and look at the bigger picture. Most people across the organization don’t understand what it means to rank first for 30 different SEO keywords. Or they might not see the immediate value of social media engagement. Your job isn’t to teach them about every type of data the marketing team collects; it's to communicate how your campaigns are making a real difference to the bottom line.  

To be successful as a marketer, you need to connect your marketing metrics with financial results to show stakeholders how your activities are contributing to generating revenue. These are the marketing performance metrics your boss cares about.  

Of course, if this was a simple task every marketer could easily do, you probably wouldn’t be reading this article. Fortunately, there are some simple steps you can take to make the task a little bit easier.  

Why translation matters

In a piece for Forbes, Jennifer Jackson, chief marketing officer at Actian, points out how one of the toughest tasks of her job isn’t developing campaigns or executing on marketing strategy; it’s making the data relevant to her fellow executives who oversee major business decisions.  

“The C-suite doesn’t need dashboards filled with acronyms,” she writes. “They need a clear, compelling narrative that connects what’s happening in the market to the business outcomes they care about.”

Marketers, therefore, have to think of themselves as translators. “We sit at the intersection of customer data, business strategy, and revenue impact. If we can’t connect those dots, the business misses opportunities,” Jackson writes.

But translating marketing metrics and proving your team’s worth won’t be possible if you don’t know what matters most to the organization. Your first step as a marketer should be to make sure you have an accurate understanding of your organization’s goals. What does success look like for your CEO? And more importantly, how are they measuring success? Are there specific metrics they are relying on to prove the business is moving in the right direction? And how can your data showcase movement toward one of those goals?  

“Being a data translator doesn’t mean dumbing things down—it means elevating them,” Jackson says. “I still want my team talking about cost-per-clicks, conversion rates, and channel performance, but when I walk into the executive board room, I’m connecting those numbers to revenue growth, churn reduction, or market share.”

The good news is you don’t have to do this alone. In fact, you shouldn’t do it on your own. Connect with your finance, sales, and business development teams and align on what matters. You don’t have to create an exhaustive list of metrics. You just need to focus on the relevant ones that everyone agrees can clearly communicate business impact.  

Three financial metrics every marketer should know

More likely than not, aligning priority metrics with teams across the business will require you to speak their language rather than the other way around. You don’t need to become a finance wiz overnight, but you should take some time to understand their terminology. To give you a running start, here are three financial metrics for marketers you should definitely have a strong understanding of.  

1. Customer Acquisition Cost (CAC)

How much do you pay for a single new customer? By calculating the Customer Acquisition Cost (CAC), you can show which channels are the most efficient when used to execute your marketing strategy.  

While it's a good idea to calculate the general CAC, you should also do it for each channel separately. This way you can quickly see where your marketing efforts are most successful and where budgets are being spent most efficiently.

CUSTOMER ACQUISITION COST = Costs spent on acquiring more customers for channel / Number of customers acquired in the same period on same channel

2. Time to Pay Back CAC

How much time does it take before a customer becomes profitable? Once you know which channels are the most efficient for acquiring new customers, you can determine when these new customers will become profitable.  

The time to pay back the CAC shows the number of months it takes to earn back the acquisition cost and therefore tells you when you'll begin to profit from each marketing activity.

TIME TO PAYBACK CAC = CAC / Monthly revenue

3. Return on Investment (ROI)

How much revenue do you make from your investments? A key metric your boss will be interested in is the Return on Investment (ROI). This shows marketing’s ability to generate more revenue than it spends on an activity.  

While marketing is intended to grow sales, overall marketing campaigns are designed to do more than that. Marketing is often a long-term process with multiple touchpoints in the customer journey, which makes it challenging to assess and prove marketing ROI.  

Measuring sales growth, however, does part of the job for you. By comparing the ROI of months before the campaign launch with the ROI of months after the campaign, you can determine the return of your marketing efforts in terms of sales.

ROI = ((Sales growth – Average organic sales growth) – Marketing cost) / Marketing cost

How to communicate value to stakeholders

Building a data driven culture requires more than just capturing data. You should be able to analyze your data and make informed decisions that positively impact your business.  

Michael Kaminsky, co-founder and co-CEO of Recast, argues in a piece for Harvard Business Review that many marketing executives simply aren’t using their marketing data to generate the forward-looking insights that support better company performance. In fact, they’re often too focused on proving the value of their previous marketing campaigns.  

“But marketing conditions change rapidly, and marketing measurement is prone to error,” he writes. “What seemed to work last quarter may not work this quarter. When plans, forecasts and execution rely on outdated campaign dynamics, the outcome is predictable: Optimistic projections that miss actual results quarter after quarter, systematically eroding finance’s trust in marketing’s numbers.”

Instead, think about your value coming from your ability to draw useful information so you can make confident business and financial predictions.  

“CFOs think in systems, profit forecasts, and incremental ROI (even if they don’t necessarily call it that),” he says. “They want to know how shifting marketing strategy will affect the business, and what range of outcomes they can expect based on various marketing scenarios.”

Rather than using marketing metrics to prove a campaign worked, use your data to take actions that lead to positive financial outcomes, while also being clear about how confident you are in your decisions. While your boss may appreciate hearing about the success of a marketing campaign, they're still always looking toward the future.  

So rather than reporting that you’ve earned the top spot for 30 keywords, explain why you think targeting your next 30 keywords will bring 300 potential customers into your marketing funnel. And use your previous campaign and any experiments you’ve run to validate your prediction.  

“This is exactly what finance wants: Measurement that helps them plan and operate the business,” Kaminsky says.  

Next steps: Prove your marketing ROI

There’s no question that marketing done well offers tremendous value to businesses. But because teams speak in different languages, the value can get lost in translation.  

With Domo, you can be more strategic with the story you tell about your marketing efforts, whether you’re the CMO reporting to the board or a manager reporting to the director. Domo connects marketing data with sales and finance data in intuitive dashboards that allow you to clearly see the financial impact of your marketing on the business. Gain clear, current insights with easy-to-understand visualizations so you can more confidently predict where your marketing spend will go the furthest.  

Are you ready to turn your marketing metrics into real revenue? Connect with our team today to explore how Domo can help.