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10 Marketing Questions Every CEO Should Ask

Marketing has long been thought of as part art and part science. While creative and innovative thinking still play a major role throughout the process, a wide range of post-modern tools are now available to bring more and more science into the equation. Companies with leaders who embrace these tools will enjoy a distinct advantage of the competition.

With the marketing landscape evolving at lightning speed, there are a
number of key concepts that CEOs need to get their arms around in order to execute a focused, productive and profitable marketing effort. Here are ten to consider.

What is my cost per lead?

The fact is, too many CEOs have no idea what it costs to obtain qualified leads and convert them to bona fide customers. Before calculating your true cost per lead, you need to gather up all the costs – from all departments – that are dedicated to the generation of leads. These are not only the production and media costs generated but also include many other soft expenses that often are overlooked.

It’s equally important for your organization to reach a consensus on what constitutes a qualified lead. Does it include anyone who puts a business card in a fishbowl at your tradeshow booth or the tire-kickers you never really had a chance of selling in the first place?

Once all of the expenses are accounted for and you’ve separated the qualified from the non-qualified leads, there is a corollary need to put effective systems in place to track the overall new-business generation effort – while quantifying your marketing value add. Fortunately, there are a plethora of Web 2.0 tools available for you to do this in a low cost,
efficient way. Until these questions are answered, it’s impossible to figure out what a genuine lead is truly costing you. This is key knowledge for determining the investment needed to produce the desired levels of leads, sales and income for the years ahead.

What is the lifetime value of my customers?

There’s a tendency to underestimate the cost of prospecting for new customers. What’s even more dangerous is the tendency to underestimate the bottom-line effect of losing a loyal customer.

Let’s suppose your average customer spends about $1,500 in a year. If your average gross profit is 30% – and the typical customer stays with you for 5 years – that customer is worth $2,250. If your company is spending more than $2,000 each to attract new customers, you may want to rethink your strategy.

When an enterprise employs these kinds of metrics, it tends to place greater emphasis on customer service, retention and long-term satisfaction and far less on the mad rush to maximize short-term sales.