Marketing Metrics..

Gone are the days of the CMO who is not fluent in metrics, analytics and spreadsheets. The internet has made marketing far more measurable (and therefore more accountable to the CEO and CFO) than ever before. Yet I still frequently hear from my CMO peers that they are struggling to find the right metrics that will get them credibility with the CEO and CFO, and show the real contribution of marketing to the bottom line.

I think the best marketing metrics look at the total cost of marketing, including program spend, salaries of the team, and overhead, and relate that cost to the results you care about -- revenue and customer acquisition. Other metrics like cost per lead, cost per follower, or cost per page view can be useful to look at within a marketing team, because they can help you make decisions about where to focus and what parts of your marketing process are broken; but most CEOs really just care about the cost and the net results, not the interim steps. This list of metrics is meant to focus on the most critical measures of marketing that your CEO will likely want to discuss with you.

Here are some metrics I've found useful over the past 5 years at HubSpot while growing our company, working with our CEO and CFO, and talking with our board members. I don’t have all the answers -- so please add your favorite metrics and thoughts on these metrics in the comments.


The 6 Marketing Metrics Your CEO Wants to See


1) Customer Acquisition Cost (CAC)
This is your total Sales and Marketing cost -- add up all the program or advertising spend, plus salaries, plus commissions and bonuses, plus overhead -- in a time period, divided by the number of new customers in that time period. That time period, by the way, could be a month, a quarter, or a year. For instance, if you spent $300,000 on Sales and Marketing in a month and added 30 customers that month, then your CAC is $10,000.


2) Marketing % of Customer Acquisition Cost (M%-CAC)
I like to compute the marketing portion of CAC and call it M-CAC, and then compute that as a % of overall CAC. The M%-CAC is interesting to watch over time, and any change signals that something has changed in either your strategy, or your effectiveness.

For instance, an increase either means that 1) you are spending too much on marketing, 2) that sales costs are lower because they missed quota, or 3) that you are trying to raise sales productivity by spending more on marketing and providing more and higher quality leads to Sales.

For a company that does mostly outside sales with a long and complicated sales cycle, M%-CAC might be only 10-20%. For companies that have an inside sales team and a less complicated sales process, M%-CAC might be more like 20-50%. And for companies that have a low cost and simpler sales cycle where sales are somewhat humanless, the M%-CAC might be more like 60-90%.


3) Ratio of Customer Lifetime Value to CAC (LTV:CAC)
For companies that have a recurring revenue stream from their customers -- or even any way for customers to make a repeat purchase -- you need to estimate the current value of a customer and compare that to what you spent to acquire that new customer.

To compute the LTV, you need to take the revenue the customer pays you in a period, subtract out the gross margin, and then divide by the estimated churn % (cancellation rate) for that customer. So, for a type of customer who pays you $100,000 per year where your gross margin on the revenue is 70%, and that customer type is predicted to cancel at 16% per year, then the LTV is $437,500.

Now, once you have the LTV and the CAC, you compute the ratio of the two. If it cost you $100,000 to acquire this customer with an LTV of $437,500, then your LTV:CAC is 4.4 to 1. For growing SaaS companies, most investors and board members want this ratio to be greater than 3X; a higher ratio means your Sales and Marketing have a higher ROI. Higher is not always better though; when the ratio is too high, you might want to spend more on Sales and Marketing to grow faster, because you are restraining your growth by under-spending, and making life easy for your competition.


4) Time to Payback CAC
This is the number of months it takes you to earn back the CAC you spent to get a new customer. You take the CAC and divide by margin-adjusted revenue per month for the average new customer you just signed up, and the resulting number is the number of months to payback. In industries where customers pay one time upfront, this metric is less relevant because the upfront payment should be greater than the CAC, otherwise you are losing money on every customer. On the other hand, in industries where customers pay a monthly or annual fee, you usually want the Payback Time to be under 12 months, meaning that you become “profitable” on a new customer in under a year, and then after that you start making money.


5) Marketing Originated Customer %
This ratio shows what % of your new business is driven by Marketing. To compute it, take all of the new customers you signed up in a period, and look at what % of them started with a lead that Marketing generated. This is much, much easier to do when you have a closed-loop marketing analytics system, but you can do it manually -- just know it will be time consuming.

What I like about this metric is that it directly shows what portion of the overall customer acquisition originated in Marketing, and it is often higher than Sales would lead you to believe. In my experience, this % varies widely from company to company. For companies with an outside sales team supported by an inside sales team with cold callers, this percentage might be pretty small, perhaps 20-40%; for a company with an inside sales team that is supported by a lot of lead generation from Marketing, it might be 40-80%; and for a company with somewhat humanless sales, it might be 70-95%.
Note: You can also compute this percentage using revenue, not customers, depending on how you prefer to look at your business.


6) Marketing Influenced Customer %
This is really similar to the Marketing Originated Customer %, but it adds in all the new customers where Marketing touched and nurtured the lead at any point during the sales process, not only by originating the lead. For instance, if a salesperson found a lead but then the lead attended a marketing event and then later closed, that new customer was influenced by Marketing. This % is obviously higher than the "Originated" percentage, and for most companies I think this should be between 50% and 99%.

Your Marketing Metrics Cheat Sheet

Read more: http://blog.hubspot.com/blog/tabid/6307/bid/34054/The-6-Marketing-Metrics-Your-CEO-Actually-Cares-About-Cheat-Sheet.aspx#ixzz2IJYxtZlU

Temprature & Crime..

High temperatures cause violent crime and implications for climate change

I've posted about high temperature inducing individuals to exhibit more violent behavior when driving, playing baseball and prowling bars. These cases are neat anecdotes that let us see the "pure aggression" response in lab-like conditions. But they don't affect most of us too much. But violent crime in the real world affects everyone. Earlier, I posted a paper by Jacob et al. that looked at assault in the USA for about a decade - they found that higher temperatures lead to more assault and that the rise in violent crimes rose more quickly than the analogous rise in non-violent property-crime, an indicator that there is a "pure aggression" component to the rise in violent crime.

A new working paper "Crime, Weather, and Climate Change" by recent Harvard grad Matthew Ranson puts together an impressive data set of all types of crime in USA counties for 50 years. The results tell the aggression story using street-level data very clearly:

Note that all crime increases as temperatures rise from 0 F to about 50 F. It seems reasonable to hypothesize that a lot of this pattern comes from "logistical constraints", eg. it's hard to steal a car when it's covered in snow. But above 60 F, only the violent crimes continue to go up: murder, rape, and assault. The comparison between murder and manslaughter is elegantly telling, as manslaughter should be less motivated by malicious intent.

Ranson goes on to make projections about the expected effect of climate change:
Between 2010 and 2099, climate change will cause an additional 30,000 murders, 200,000 cases of rape, 1.4 million aggravated assaults, 2.2 million simple assaults, 400,000 robberies, 3.2 million burglaries, 3.0 million cases of larceny, and 1.3 million cases of vehicle theft in the United States.

This is pretty serious stuff. Ranson also shows that these effects haven't changed much over time, so the prospects for adaptation may be low. And there's no reason to believe that this relationship, which is probably neuro-physiological, doesn't hold outside of the USA.

http://www.fight-entropy.com/2012/08/high-temperatures-cause-violent-crime.html

Religion & Babies..

“I’m going to talk about religion. But it’s a broad and very delicate subject, so I have to limit myself. Therefore I will limit myself to only talk about the links between religion and sexuality…I will talk on what I remember as the most wonderful – it’s the moment when the young couple whispers, ‘tonight, we are going to make a baby,’” said Hans Rosling, the eclectic Swedish doctor and statistician known for his Gapminder tool, in a TedxSummit presentation in April.

In the past, Rosling has presented on topics ranging from human rights to washing machines. This time, in Doha, Qatar, he tackled the number of babies a woman will have in her lifetime, also known as total fertility rate (TFR). He tracks this figure, by country, along with average income and basic religion type, from 1960 to 2011.The results are intriguing.

Remarkable Progress
First, Rosling points out that humanity as a whole has experienced a rapid drop in the fertility rate over the past 50 years. “By 2010, we are actually 80 percent of humans who live in countries with about two children per woman,” he notes.
Even countries whose fertility rates seem to have stagnated more recently have experienced this “tremendous improvement.” Rosling highlights Ghana and Senegal, which have reduced their fertility rates from over seven in 1960 to between four and five today.

Rosling also notes that fertility has fallen “across the world,” even in lower income countries. For example, although Vietnam has less than five percent of the GDP of the United States, their TFR is comparable.
But high fertility remains in some poorer countries, like the Democratic Republic of the Congo (5.7, according to Gapminder) and Afghanistan (6.6). And although these countries have relatively high mortality rates, they are still projected to double their populations in 30 years. “In the world today, it’s the countries that have the highest mortality rate that have the fastest population growth because the death of a child is compensated by one more child,” says Rosling.

Religion and Fertility
Rosling also classified each country by the basic type of religion held by the majority of its inhabitants – Christianity, Islam, or “eastern religions,” which include Hinduism and Buddhism. “In 1960, you had to be a rich Christian to have few babies,” Rosling says. “The exception was Japan,” which had a fertility rate of two children per woman in 1960.Over time, however, fertility rates fell across the board. Now, “there’s no major difference” in the fertility rate of Islamic and Christian countries; countries of each religion experience high and low fertility rates. (Countries with “eastern religions” all currently have fairly low fertility rates; the highest, Nepal, has a TFR of 2.7.)

Rosling posits that the real barriers to reducing fertility are four-fold: “children should survive, children shouldn’t be needed for work, women should get education and join the labor force, and family planning should be accessible.”

“All the religions of the world are fully capable to maintain their values and adapt to this new world,” he says.

Intuitively, however, this isn’t exactly the full story. Rosling’s three very broad categories for religion obscure a great many differences between different sects and factions, and in some countries, religion is tied directly to those barriers he mentions.

In the Philippines, for example, the Catholic Church has been a major part of opposition to more and better access to contraceptives. Other countries, like Yemen, Afghanistan, and Liberia, face deep divides over women’s role in society, with very early marriage making it difficult for women to get an education and enter the labor force. Thus while there are countries of all religions which accept the use of modern contraceptives, for others, religion remains a very real obstacle to reducing fertility rates.

“Peak Child”
Nonetheless, Rosling is right when he says, “we have reached peak child” – at least if the UN Population Division’s medium variant projections are to be believed (there are also high and low variants). The number of babies being born around the world will likely never be higher than it is now. Yet world population is expected to continue to grow throughout the rest of the century. The UN medium variant projection for 2100 is 10 billion people. Rosling explains that total world population will increase despite the number of children in the world remaining fairly constant this century because younger generations are larger than older generations.

“You can see it’s like there are three [billion] missing here,” he says, referring to an illustration of global population created by stacking boxes. “They’re not missing because they’ve died – they were never born. Because before 1980 there were much fewer people born than there were during the last 30 years.” As the smaller, older generations age, they will be replaced by younger, larger generations, a trend known as population momentum. “This is the great fill-up, it’s inevitable.”

Although a large portion of future population growth is thus inevitable, the pace of fertility decline in those areas where it is still high is not. This creates the uncertainty in projections like those made by the United Nations. It’s also an impetus for countries and the international community to continue to break down Rosling’s four barriers.

“We will be just 10 billion in this world if the poorest people get out of poverty, their children survive, they get access to family planning – that is needed,” he stresses. “This is indeed important because everyone understands that there is some sort of limit on how many people we can be on this planet.”

Sources: Gapminder, TED, UN World Population Division.
Video Credit: Hans Rosling: Religions and Babies, courtesy of TED. Image: Gapminder World.
http://www.newsecuritybeat.org/2012/08/hans-rosling-religion-babies-poverty/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheNewSecurityBeat+%28New+Security+Beat%29

Annual Leave..

Most "Underdeveloped" countries has "Annually" paid 21-working-days..!!

This is the critical thing to question..

Language & Being Rational

Prior to the invention of Radar, this device helped to focus, magnify and trace the engine sounds of attacking aircrafts..

Study:
Decisions Made in a Foreign Language Are More Rational

David Berreby on June 13, 2012, 7:06 PM Struggling with a foreign language is practically the definition of mental strain: what is the word for "screwdriver" again? did I produce that "ĥ" sound correctly? are they laughing with me or at me? And mental strain, according to post-rational theories of the mind, has consequences for how we think. But what consequences? Maybe (1) the extra work of a foreign tongue makes people more reliant on unconscious, automatic mental processes (since they used up their conscious reasoning power trying to remember the ablative-honorific form for postcard). On the other hand, maybe (2) the conscious and deliberate effort required by the foreign tongue brings the subject of the words into conscious focus, making people less reliant on those unconscious mental mechanisms. So which is it? This paper, in the current Psychological Science, offers a nice, clear decision in favor of option 2: People who evaluated risk in a foreign language, it reports, were more rational and accurate than those who worked in their native tongue.

Boaz Keysar, Sayuri L. Hayakawa, and Sun Gyu An put 368 students through an exercise devised to neatly separate the workings of what Daniel Kahneman calls System 1 (automatic, unconscious, biased) from those of System 2 (the deliberate, conscious attention that you focus when and where you feel the need). System 1 works with a set of rules of thumb that don't align with logic, one of which is a much greater sensitivity to possible losses than to possible gains.

So most people, if they could give an experimental medicine to 600,000 people and be sure to save 200,000, would prefer that option to a different drug that might save everyone but might not work on anyone. (A sure 200,000 saved is better than a potential to save 0.) However, consider that same drug (could save all, could save no one) against a different alternative: A medicine that is sure to leave 400,000 people dead. In that case, people prefer the drug that might save everyone (potential to save 600,000 is better than certain loss of 400,000). That's not logical, because that drug is the same as the one that for sure saves 200,000. But it satisfies System 1's bias against risks that could lead to a loss.

So the two versions of the question (certain life for 200,000 versus certain death for 400,000) can reveal whether a group of people is using System 1 or System 2 to think about the issue. System 2 users, thinking deliberately and consciously, will tend to see that the questions are identical, so answers to either version will tend to be the same. But people leaning on the unconscious System 1 will show a big difference: They'll favor the save-200,000 option much more than the lose-400,000, not noticing that they're the same.

Keysar et al. ran this diagnostic procedure on 368 students in different settings (native English speakers who spoke Japanese as a second language; Koreans who spoke English; and another set of English speakers who had learned French). The results are pretty striking: In all three experiments, people working in their native tongue showed a strong preference for the option that reminded them of lives saved over the one that reminded them of lives lost. But people working in the foreign language didn't distinguish, presumably because they had reasoned it out and saw that they were the same.

All in all, a fine argument for foreign-language learning, and foreign-language use. More immediately, the study seems to help resolve a question where post-rational models seem to clash. At least when it comes to language, it seems the effect of bringing conscious focus to a subject outweighs the effect of adding to the mind's cognitive load.

Keysar, B., Hayakawa, S., & An, S. (2012). The Foreign-Language Effect: Thinking in a Foreign Tongue Reduces Decision Biases Psychological Science, 23 (6), 661-668
DOI: 10.1177/0956797611432178

http://bigthink.com/Mind-Matters/study-decisions-made-in-a-foreign-language-are-more-rational?utm_source=Big+Think+Weekly+Newsletter+Subscribers&utm_campaign=c8b246868f-Sat_6_16_Gay_gene6_15_2012&utm_medium=email

Homo-Sapiens vs. Homo-Travaillus

Martouf sets out a number of arguments in favour of a basic income, as illustrated here

Switzerland: An Initiative to Establish Basic Income for All

Written by: Stanislas Jourdan
Global Voices

An initiative to establish a new federal law known as “For an unconditional basic income” [fr] was formally introduced in Switzerland in April. The idea, which consists quite simply of giving a monthly income to all citizens that is neither means-tested nor work-related, has generated commentary throughout the Swiss blogosphere.
The Swiss referendum process is a system of direct democracy that enables citizens to call for legislative change at the federal or constitutional level.
If the initiative to introduce a basic income gathers more than 100,000 signatures before October 11, 2013, the Federal Assembly is required to look into it and can call a referendum if the initiative is judged to be credible.

Pascal Holenweg explains what it's all about:
The grassroots initiative “for an unconditional basic income” proposes that “the establishment of an unconditional universal benefit” be written into the federal constitution which would “allow the entire population to lead a dignified existence and participate in public life”.The law will address financing and set the amount of the benefit (the proposers suggest around 2,000-2,500 Swiss francs per month (or 2,200-2,700 US dollars per month), which is about the same as the maximum current social security payment, but they have not written this into the text of the initiative[fr]). The basic income does not come with any conditions attached: it is not subject to any means testing. It is universal (everyone will receive it) and egalitarian (everyone will receive the same amount). It is also personal (it is paid out to individuals, not households).It is not income to replace a lost salary. Rather, it replaces all inferior income support (unemployment benefit, pensions, family allowance, student grants, disability payments). How will it be financed? Through direct taxation of income and wealth, indirect taxation on consumption (VAT), taxing financial transactions, and most especially through the reallocation of resources currently allotted to financing state pensions and unemployment payouts, social security and other welfare payments lower than the amount of the basic income.

Fred Hubleur makes the point:
The important thing is that this revenue is fixed for everyone without there being a requirement to work; that's right, it is income without employment. This might seem shocking. But at its heart it is an entirely defensible idea. On the one hand, we are fighting against poverty and insecurity, there will no longer be a need for social security to bolster other incomes, and dozens of different and unwieldy benefits. This unconditional income is equally good news for innovation and creativity. We have also made a paradigm shift that dyed-in-the-wool capitalists might find alarming: the liberation of working man, returning him to his status as homo sapiens over that of homo travaillus (ed's note: Homo travaillus is a play on word to describe the working man) which holds such sway in our society.

This new world vision has most notably been explored in the Helvetico-German film Basic Income: A Cultural Impetus, by Ennon Schmidt and Daniel Hani, two of the eight Swiss citizens founders of the initiative:

So here it is. You receive 2,500 Swiss francs every month no strings attached. Tell us how your life would change. Tell us how you would spend your time. What would you devote your life to?


The responses were varied. Antoine would set up a restaurant. Gaetane a farm.
Renaud would devote himself to music:

My first project would be to finish a musical instrument that I am in the process of creating and attempting to put it into production. At the same time I would offer lessons on how to play my favourite musical instrument, one which is not well known in this region.


User herfou70 would prioritise his family:
I am a father (3 children - 6, 11 and 14 years old) and I am the family's only earner. To have a basic income would allow me to devote more time to my children. My wife would also be able to do something outside of looking after our home, allowing her to grow and develop.



On Facebook, supporters of the basic income initiative have launched a competition called “star for life”. Visitors to the site are invited to take a photo of themselves as if they were sentenced to life.

A basic income will “do more harm than good”

But not everyone is convinced by the idea. According to Jean Christophe Schwaab, a member of Switzerland's lower house of representatives, socialists must not support the proposition, which he judges will “do more harm than good and be a disaster for employees”.

He gave the following explanation on his blog:
Supporters of a basic income claim that it must “free people from the obligation of earning a living” and lead to the disappearance of unstable or poorly paid employment, because, as this basic income guarantees a minimum living wage, no one will want these jobs. Now, it's more than likely to produce the opposite effect. As the low level of the payouts will not be sufficient to satisfy the initiative's primary objective, namely ensure a decent standard of living, the beneficiaries will be obliged to work anyway, depsite the basic income. The pressure to accept any available job will not go away.

Lastly, an unconditional basic income would, worst of all, permanently exclude a good number of workers from the job market (by denying their right to work): those who are judged to have insufficient earning potential (e.g. due to disability, illness or lack of qualifications) will just have to content themselves with the basic income.
His analysis is controversial, as can be seen from the comments thread under his post.
 
From a French perspective, Jeff Renault explained why the left are “dead set against” an unconditional basic income:

The left of the end of the 19th and the 20th centuries was forged on the values of work and defending workers. This fight centres around the never ending defence of the salaried worker and the Holy Grail of permanent, salaried contracts, even through this “status” only applies to the minority.

With the launch of the initiative, Hubleur hopes [fr] that a great societal debate will open up in Switzerland:

This will at least open the door to a great societal debate and the chance to reflect on what we want and to what kind of life we aspire. I've been following the idea of a universal benefit system (amongst other names) for a while. I remember talking about it in a class on instability and social ties a decade ago at university. The idea is frankly very seductive and deserves a closer look.When you look at the world created through the current capitalist, productivist model, you could easily end up longing for something else, for a world that gives everyone a better chance.

My Favoraite: Statistics..

"In the times like this; when unemployment rise by 13%, income is falling by 5%, and suicide rates are climbing up, I wonder why governments are wasting money on things like collection of statistics.."

A famous comment on a Radio Talkshow in the time of recession

Hans Rosling says there’s nothing boring about stats, and then goes on to prove it. A one-hour long documentary produced by Wingspan Productions and broadcast by BBC, 2010. A DVD is available to order from Wingspan Productions. Director & Producer; Dan Hillman, Executive Producer: Archie Baron. ©Wingspan Productions for BBC, 2010

http://www.gapminder.org/videos/the-joy-of-stats/