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Any good business owner knows data is the key to success. Building a successful company in 2024 is as much about numbers and tracking as it is about creating amazing products and delivering exceptional service. Monitoring the right metrics is critical to discovering opportunities for growth, reducing costs, and even ensuring you’re using your budget effectively.
Your sales and marketing performance metrics, in particular, help to ensure you’re successfully driving growth in your organisation, and implementing the right GTM strategies.
The challenge is in figuring out which metrics are most valuable for your organisation. Without the right strategy, you could waste all of your time on “vanity metrics”, like social media impressions and website traffic, without actually drawing insights from your most useful data.
Fortunately, we’re here to help. Here’s your guide to the most valuable metrics you should be watching in your sales and marketing operations.
One of the mistakes many businesses make in today’s world is assuming that “sales” and “marketing” metrics are entirely separate. However, the reality is that a lot of the data you track will be closely aligned. Both sales and marketing teams need to monitor acquisition costs, conversion rates, and customer lifetime value to ensure you’re consistently generating results.
Let’s take a look at some of the most important sales and marketing metrics for GTM teams in 2024.
LTV, or customer lifetime value, looks at the average revenue generated for your company by a customer throughout the time they interact with your business. You can calculate it by multiplying the average purchase value of a customer, by their average purchase frequency and customer lifespan.
Understanding LTV is important for both your sales and your marketing professionals, as well as other members of your GTM team, like your customer success experts. If your average customer lifetime value diminishes after you implement a new marketing strategy, this could show you you’re focusing on the wrong customers or the wrong channels.
If your LTV increases after you implement new sales methods and onboarding strategies, this could tell you that your GTM strategy is driving better retention rates and opportunities for growth.
One of the most valuable marketing and sales metrics, customer acquisition cost gives you a snapshot view of how much it costs to actually drive a lead to your company. To calculate this number, you’ll take the number of total sales and marketing costs for a specific period, and divide it by the number of new customers you generated in the same period.
The goal is to ensure that your CAC costs go down over time, instead of up. Every time you implement a new sales strategy or marketing campaign, it’s worth paying attention to how much you’re spending on those strategies.
You can then compare your CAC with your average customer lifetime value, to determine whether you’re spending too much to acquire customers that don’t contribute to a significant amount of profit.
Conversion rates and win rates are usually referenced in the sales landscape, but they’re actually important throughout your GTM strategy. In the sales landscape, you’ll usually calculate “win rates” by examining how often your sales teams convert prospects into paying customers.
To calculate your conversion rate, you simply divide the number of leads that actually become customers, by the number of leads you generate each month. For instance, if you generate 400 leads in a month, and only 80 buy something, your sales conversion rate is 20%.
In the marketing world, your conversion rates can look at a range of different actions taken by customers. For instance, conversions could include customers contacting your sales team, downloading a demo of your product, or signing up for a newsletter subscription.
Monitoring “conversion rates” throughout the customer journey can help you to identify potential issues of “funnel” leakage. For instance, if you notice 80% of your customers click on a landing page, 60% sign up for a discovery call, 40% make it to the demo phase, and only 3% buy the product, you can see that you may need to:
In 2024, many companies are focusing heavily on retention, as customer acquisition costs increase, alongside churn. There are various ways you can measure retention and churn across your sales and marketing operations. One of the best ways to take advantage of your metrics is to use retention and churn rates to answer questions about your GTM strategy.
For instance, monitoring NRR or Net Revenue Retention shows you whether your product or service is meeting customer needs and expectations, ensuring they stay with your business for longer.
To calculate the score, you’ll need to look at your monthly recurring revenue, expansion MRR (from upsells and cross-sells), contraction MRR, and churn MRR (From cancellations). You can use this formula to get your results: Starting MRR – Contraction MRR – Churn MRR / Starting MRR x 100.
You can also monitor churn and retention rates in relation to specific marketing, sales, and customer service campaigns. Paying attention to how your retention rates increase and churn rates drop when you implement different strategies, will show you where to focus in the future.
Finally, return on investment is another multi-faceted metric you can use in various ways across the sales and marketing landscape. In the sales environment, you can monitor return on investment by looking at how much you spend on things like sales training strategies, or new sales channels, and how much extra revenue you generate as a result.
In the marketing world, you can examine the return on investment with specific “filters”. For instance, you might look at return on advertising spend, to examine the potential results of your paid advertising campaigns.
You can use ROMI (Return on Marketing Investment), to see how much revenue you’re earning as a result of campaigns on different channels, such as email or social media marketing. Regularly monitoring return on investment throughout your GTM strategy is how you ensure you’re distributing your GTM budget effectively, and getting the best results from your campaigns.
In 2024, when marketing and sales budgets are shrinking, monitoring ROI could be crucial to ensure you’re not wasting any marketing dollars.
Now, more than ever, monitoring the right metrics is crucial to your success as a growing business. Unfortunately, there are hundreds of metrics you can potentially monitor throughout your GTM strategy, and not all of them will drive the same results for your business.
The metrics above represent just some of the key data points you should be paying attention to heading into 2024. But it’s also worth remembering that monitoring the data alone isn’t enough. You also need to ensure you’re aligning your sales and marketing strategies, using metrics from both ecosystems to help guide your business decisions.
Looking at both sales and marketing as two parts of a comprehensive GTM methodology means you can take a more holistic, data-driven approach to understanding how your different tactics work together to increase revenue and ensure ongoing growth.
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