The two key digital metrics

Pasqual Flores
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Speaking of key digital metrics.

I admit it.

Yes, I have felt lost.

Lost, confused and overinformed.

And overinformation, always results in misinformation. Towards the loss of focus, to wear and to walk in circles.

Do not give it more laps. Simplify.

In your digital metrics reports, ask for an executive slide, a slide where only the two key digital metrics are displayed. Specifically:

  • Customer Life Time Value (CLTV)

  • Cost Acquisition Customer (CAC)

  • CLTV / CAC

CLTV is the value in sales that a company can reasonably expect from a specific customer.

For example, if you are an electric marketer, and the average life of a customer in your company is 3 years, and you know that the average monthly bill is € 40, we can say that the CLTV that we can expect from a new customer is from € 1,440.00.

Second, we have the CAC, it is the cost that involves our company getting a new client.

Following the example of the electric power company, if the marketing cost of one year is € 40,000 and in this period we have achieved 100 new clients, we can say that the cost of acquiring a new customer is € 400.00.

So, we have to work to obtain a good CLTV / CAC target ratio. Usually it is that the CLTV is 3 times superior to the CAC.

In the example shown we will be in a good ratio, specifically € 1,440.00 / € 400.00 = 3.6

Conclusion

In conclusion, do not be confused by the immensity of data that we have available, focused on CLTV and the CAC, so you will see your business as an iterative flow that keeps going forward constantly, and the one that, as long as you have the correct ratio, will give the necessary margin to be able to invest and continue to grow.

If you want to know how DigitalMakers works and we follow these key metrics with our clients, do not hesitate, contact us. We will be happy to assist you, listen to you and together evaluate your specific case.


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