These days as marketers, we are flooded with metrics. Website traffic. Bounce Rates. Followers. Likes. Conversion rates. The list goes on and on. With so many marketing metrics its easy to lose perspective on what metrics really matter: the ones that show marketing’s contribution to the bottom line. When presenting to C-level executives, marketers should focus on those metrics that demonstrate ROI.
One key metric for marketers is a company’s Customer Acquisition Cost (CAC). The CAC shows how much a company is spending to get a new customer. It is calculated by taking the overall sales and marketing cost and dividing that figure by the number of new customers acquired in a given month.
Sales and marketing cost: $100,000
New customers acquired in a month: 10
CAC = $100,000 ÷ 10 = $10,000 per customer
An increase in CAC means that new customers are costing you more, which may indicate a problem with your sales or marketing efficiency. Imagine how happy your boss will be when you can provide hard numbers on sales and marketing efficiency!
To learn more about the marketing metrics that have real meaning for C-level executives, download our Ebook, “6 Marketing Metrics That Your Boss Actually Cares About.”