Bottom line metrics

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Finding tangible evidence that what we do works (or doesn’t) is key to performance improvement.

So we look for metrics to gauge our results.

How many times have you heard (or believed yourself) any of the following as metrics that show your marketing dollars are well spent?

Look at all the tweets/friends/followers our Social Media is getting, and the numbers are growing.

Our organic page visits are going through the roof, so our SEO and blogging is working.

Our online display ad buys are driving people to our Contact Us page, and we’re getting more initial contacts then ever before.

And the two corollaries:

  1. We’re getting increasing numbers for the same or lower cost, so the Social Media/SEO/Display Ad tactic is improving its efficiency.
  2. We can increase our results by devoting more of our budget at the more efficient rate.

Metrics like that are indicators – benchmarks – of how we’re doing as marketers, and not how the business itself is doing.

And while they’re important benchmarks to us, too often we loose track of the real process, namely bringing in Sales Revenue at the top line and ending up with Net Profit on the bottom line.

If our marketing dollars don’t produce top line sales and help generate bottom line results, we should take a hard look at the mix of our spending.

As marketers, here are some Bottom Line Metrics that measure what we’re doing to advance the company’s business:

Are we gaining more customers to grow our Sales Revenue?

Or are we selling more products to the same (or fewer) customers?

Or are we increasing our revenues due to price increases?

What is the cost of acquiring those customers?

Even the cost of customer acquisition could go up or down, and not tell the whole story. So we also should know if our Contribution Margin is increasing or decreasing as a percentage of total Sales Revenue. (CM = total cost of all marketing expenses/total sales revenue)

When you can increase marketing spending with a resultant increase in Sales and decrease the CM percentage, then you’re contributing to both Top Line Sales and Bottom Line Profit.

What’s the Lifetime Value of our (new) customers?

Are your customers “one and done” or do they return to buy again?

Keep an eye on your Bottom Line Metrics, and gain as much knowledge as you can about your repeat buyers. They’re the ones that will sustain your business.