This is a metric that measures the value of a customer’s relationship with a business.Ĭustomer lifetime value is an important customer acquisition metric because different customers have different lifetime values. So, when running a marketing campaign, you’ll want to look at your average customer acquisition cost to see how much you’re paying to acquire customers compared to how much these customers are spending in your store. We’ve already mentioned what CAC is and how to measure it.Īs an e-commerce store, you’ll be working to attract new customers. Important customer acquisition metrics to track 1. To calculate your store’s CAC, you’ll need to divide your sales and marketing expenses by the number of new customers. That said, it’s important to look at CAC within a set of other metrics and KPIs such as conversion rate and churn rate, which we’ll get into shortly. In addition, sales and marketing costs, subscriptions for marketing purposes, and staff or agency costs should be included in your CAC calculation.ĬAC is also a good measure of a store’s or company’s growth as it shows how many new customers were added. Not only does CAC involve money spent on advertising but also how much you spend on manufacturing, producing, storing, and shipping your products. What is CAC?Ĭustomer acquisition cost (CAC), also known as cost per acquisition (CPA), is a metric that measures the cost incurred by a business to attract and acquire a new customer. That said, customer acquisition is part of any business strategy.Į-commerce stores that are just starting out have to focus on acquiring new customers, whereas those who have been around for some time are able to divide their marketing budget between acquisition and retention. Nearly 44% of businesses said they focused on acquiring new customers, while only 18% said they focused on customer retention. Moreover, data by Econsultancy shows how much businesses rely on customer acquisition while overlooking retention. But chief among them is that it’s easier to sell to a retained customer than it is to sell to a new one.Īccording to the Harvard Business Review (HBR), the probability of selling to current customer is around 60% to 70%, whereas the probability of selling to a new customer drops to 5% to 20%. There’s lots of data about the benefits of customer retention. That is, you want them to keep coming back to your store and become regular customers.įurther reading: Here’s What You Need to Know About the Difference Between ROI and ROAS However, the solution to this is after acquiring new customers, you want to retain them. You see, acquiring new customers only to have them leave the next day is like throwing your money away. While this is important at almost every stage of a business, it’s even more pressing to retain those customers you’ve acquired. Many businesses fall into the trap of focusing on acquiring new customers. In this article, we’re going to focus on the top customer acquisition metrics that e-commerce businesses need to consider and how to calculate them. One of the important metrics a business, especially those just starting out, needs to measure is the customer acquisition cost (CAC).īut it’s not the only one that measures the value of acquiring a new customer and how it impacts your business. These KPIs tell you whether you should continue with their marketing and social media strategy or if you should try something else. In this article, we will discover the most important user acquisition metrics to track: Using e-commerce KPIs and metrics, online businesses can decide if the ad they’re running has resulted in a positive return on ad spend (ROAS) or not. Instead, you have to look at this data based on metrics and key performance indicators (KPIs) that you set down so you can decide if, at the end of a period (week, month, quarter, or year) you’ve performed well or not. Having a pretty chart or a figure at the end of the month isn’t enough. Any e-commerce business on the planet knows that they need data to see if their efforts and ads are panning out – or not.īut this data alone isn’t enough.
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