Australian SMEs are facing increasing pressure to demonstrate genuine return on investment from their marketing spend. As we look ahead, simply tracking ‘vanity metrics’ like likes and followers won’t cut it. To truly optimise profitability, we need to focus on indicators that directly link marketing activities to revenue. The good news is, a smaller set of well-chosen metrics will give you a clearer picture than a sprawling dashboard.

Here are the performance indicators we believe will be most critical for marketing profitability:

• Customer Lifetime Value (CLTV): This is arguably the most important metric. It predicts the total revenue a single customer will generate throughout their relationship with your business. Understanding CLTV allows you to justify higher customer acquisition costs and focus on retention strategies. We’re seeing more SMEs invest in loyalty programs and personalised experiences to boost CLTV.
• Marketing Qualified Lead (MQL) to Sales Accepted Lead (SAL) Conversion Rate: This measures how effectively marketing is delivering leads that the sales team actually wants to pursue. A low conversion rate signals issues with lead quality or misalignment between marketing and sales. Improving this rate directly impacts sales efficiency and reduces wasted effort.
• Return on Ad Spend (ROAS): While seemingly basic, ROAS remains vital, especially with the rising cost of digital advertising. It’s not enough to just get clicks; you need to know how much revenue each dollar spent on ads is generating. We anticipate increased scrutiny of ROAS as businesses navigate economic uncertainty.
• Attribution Modelling Accuracy: Knowing *which* marketing touchpoints contribute to a sale is crucial. Moving beyond last-click attribution to more sophisticated models – like data-driven attribution – will become essential. This allows you to allocate budget to the most effective channels and campaigns.

These metrics aren’t isolated. They’re interconnected. For example, a higher CLTV justifies a higher ROAS target. The key is to integrate these indicators into a cohesive reporting system and regularly analyse the data. Don’t get bogged down in collecting everything; focus on what truly drives revenue.

To start improving your marketing profitability, we recommend conducting a thorough audit of your current metrics and identifying the gaps. Then, implement tracking for these key indicators and establish a regular review process. This will empower you to make data-driven decisions and maximise your return on investment.