CAC (customer acquisition cost) and LTV (long-term value) will be helpful for you in building a marketing strategy. It is important to remember that these measurements mainly should be used in accessing your strategy’s marketing performance. It’s not at complicated as it seems. Trust me! This blog is a follow-up on the CAC and LTV topic that I've discussed last week. Let’s jump in.
To bring your CAC: LTV ratio down, and increase your profits, here are a few effective strategies:
- Conversion rate optimization (CRO). Automated submissions and shopping accessible 24/7
- Targeted value. Give customers content, products, services that are valuable to them
- Customer referral program. Free customers – through automated referral systems
- Automated tools/processes to streamline your sales process
- Add more value for your existing customers, and provide appreciation gifts
- Review the six areas of growth quarterly so that you and your team can identify what or who is performing and what isn't, from there; you can adjust to achieve your goals
- Prioritize three areas at a time focusing on the right activities that move you to the next level of growth
- Set quarterly goals
- Track your metrics
Here are more things to consider when implementing these principles in your marketing strategy:
- Before implementing your digital marketing strategy, set short, medium, and long-term goals
- Create a marketing strategy by following four steps; develop customer persona, set timelines, assess strategies, set a budget
- Customer acquisition involves an understanding of the customer buying process and formulas to calculate the CAC, LTV, and CAD: LTV ratio
- Identify the six areas of growth, score them, and review quarterly until goals are achieved
As you can see, setting up a digital marketing strategy is an involved and complex process that requires a solid understanding of your customers, their behaviour, their needs, your sales process, and finally creating mapping a marketing plan template to identify goals and stay on track.