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Tag : Ty Shay

The Three KPIs That Matter

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This past week, my partner Lee Goldstein and I have been on a listening tour, immersing ourselves in the wisdom of some of the most accomplished marketers in the world.

Meeting with marketers is like ascending a mountain through clouds. In the middle, things can be foggy and confusing, but the view from the top is crystal clear.

 The clear message of top marketers?

 “There are three KPIs that matter:

The first is Cost-to-Acquire a Customer.

The second is Revenue-per-Customer.

And the third is Lifetime Value of the Customer.”

So said Jim Safka, former CMO of E*TRADE and CEO of Match.com.

Jim told us how he restructured his organization at Match from traditional “marketing and product” silos to a “one-leader-one-metric” system, with each of his key managers owning one of the three KPIs.

Ty Shay, CMO of LifeLock and former CMO of Squaretrade has had a very good month. A week ago, on November 28th, it was announced that SquareTrade will be acquired by Allstate for $1.4 billion dollars. Just a week earlier, Symantec announced it would acquire LifeLock in a deal worth $2.3 billion dollars.

We’d understand if Ty were focused on his stock and options at this time, but instead he too listed the three key measures – the very same KPIs that Safka cited.

“Cost-to-Acquire, Revenue-per-Customer and Lifetime Value – that’s the business,” said Shay.

Cost-to-Acquire is a pretty straightforward measure. How much do you have to spend on marketing to acquire a new customer? When we say that “we use inspiring action to drive brand value up and cost-per-acquisition down” – that’s what we’re talking about.

Revenue-per-Customer and Lifetime Value of a Customer are both measures of customer value, of course. The later (LTV) can be thought of as simply the gross profit-per-customer over the average customer tenure. Here’s an infographic on how to calculate LTV. 

In an ideal world, LTV would be the only measure driving the “allowable” – the maximum cost to acquire a customer profitably.

But, it’s not an ideal world, from a finance perspective. Most companies are working to shorter time horizons when calculating permissible marketing spends for acquisition, because most companies count on cash-flow to some extent to finance the ongoing operations of the company.

That’s where Revenue-Per-Customer comes in. Many companies pick monthly, quarterly or annual time periods. Within those periods, the total revenue divided by the total number of customers yields the Revenue-Per-Customer.

This is brand direct marketing.

But where does “brand” fit in? Brand lowers the cost to acquire a customer, while increasing lifetime value. Brand drives greater passion around every interaction, moving customers and influencers through sales funnel and lifecycle. Brand reduces friction in the funnel, speeding growth.

The Inspiring Action marketer, using modern brand direct marketing techniques, never sacrifices brand for revenue, or sales for brand. Instead, the standard is a synergy wherein the brand idea improves response and sales today, while building the brand for tomorrow.

Focusing on the three key KPIs helps an inspiring action marketers write their own tickets. Take it from Jim Safka and Ty Shay.


How To Get Any CMO Job You Want

For decades, Ty Shay has been the change agent that CEO’s dream of.

I was first introduced to Ty while he was the CMO of Hotwire.com.

“You had written a piece…it was about how the goal of the agency should be driving performance while at the same time driving a brand…It seemed like we were kindred spirits, which is why we made the change.” – Ty Shay

And kindred spirits we were. In just three quick years we were able to grow Hotwire.com from a Silicon Valley start-up to a top-five travel website, which is where it was when it sold for $663 million. 

Since then, Ty has used the same brand response principles I wrote about in that piece to write his own ticket to any CMO job he wants.

So how can you be like Ty? How can you get any CMO job you want? Listen to the full interview below to find out:

If you’re interested in continuing the brand response conversation, email me at Mark@digobrands.com

 

Practice Brand Direct

Key #7 of 10 to Inspiring Action: 10 Keys to the Future of Marketing. Download our summary poster of the 10 Keys here.

One of the best things about doing my Inspiring Action Interviews has been the opportunity to have deep conversations with several of my most successful clients.

These are the CMOs that CEOs worship – marketers who have been highly successful again and again.

A common theme came up as we talked about the formative experiences we’d shared.

PODCAST THUMBNAIL

“Since that time I’ve been what you’d call a Brand Direct marketer.” – Ty Shay, CMO LifeLock

“That methodology has become the methodology I’ve applied ever since.” – Leslie Dukker Doty, CMO the Reader’s Digest Association

I first wrote about “brand direct” publicly almost twenty years ago. Since then the direct economy has taken over our lives, and just about every industry has been disrupted by it. This has mostly been a very good thing for me, as our clients over the past two decades have been doing more than their share of the disrupting.

Drowning in data, today’s marketers cry out for coherence. Even with programmatic trading desks, dashboards and optimizations, incremental improvements are only detectible to sophisticated machines.

Significant, meaningful, ongoing improvements in marketing efficiency are still possible, however. They simply require more than mere visual and verbal consistency.

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The answer begins with a journey of discovery. The path of that journey is the customer journey itself. Together, we learn to see things from the customer’s point of view, from the prospect’s perspective. We uncover the insight – the inspiring idea – that will change and organize everything.

Then, together, we mine that inspiring idea to accelerate growth by up to ten times. Of course, this also dramatically alters the marketer’s journey!

Let’s alter your journey too!

-Mark DiMassimo, Chief