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The Importance Of Marketing Metrics

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As marketers, we have a lot of resources available to us for accessing data and measuring success.
With the abundance of information at our fingertips (often in real-time) courtesy of great tools like Google Analytics, Facebook Insights, Twitter Analytics, or platforms like HubSpot & Hootsuite, we have an excellent idea of what is working and how we can continue to improve on the success of our programs.
Depending on the audience you’re trying to reach, the strategies and channels you are using to reach them and the overall objective, each campaign may call for different metrics to assess effectiveness. There are a variety of metrics you or your team may be using to help improve your marketing and day-to-day performance. Those metrics
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Critical KPIs will vary based on the industry, what stage your business is in and the strategic objectives, but here are several that we believe resonate with decision makers.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost is the metric used to determine the total average cost your company spends to acquire a new customer.
CAC is calculated by taking the total Sales + Marketing Costs and divide by the number of New Customers in that time period.
Sales & Marketing Costs = program and advertising spend + salaries + commissions and bonuses + overhead in a month, quarter or year.
New Customers = number of new customers in a month, quarter or year.
Let’s look at an example:
What CAC Means and Why It Matters: CAC illustrates how much your company is spending per new customer acquired. You want a low average CAC. An increase in CAC means that you are spending comparatively more for each new customer, which can imply there’s a problem with your sales or marketing efficiency.
Marketing % of Customer Acquisition Cost
The Marketing % of Customer Acquisition Cost is the marketing portion of your total CAC, calculated as a percentage of the overall CAC.
Ratio of Customer Lifetime Value to CAC (LTV:CAC)
The Ratio of Customer Lifetime Value to CAC is a way for companies to estimate the total value that your company derives from each customer compared with what you spend to acquire that new customer.
Time to Payback CAC
The Time to Payback CAC shows you the
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