Whenever we think about the summertime, thoughts of the sun, sand, and seas pop into your mind. As some of the United States starts the phases to reopen, people are dashing to the beaches for some much-needed sun. After all, a few months of spring hibernation will cause anyone to lose their Vitamin D reserves. I’m sure you can’t get away from bouncing beach balls and waves crashing against the shores away from the top of mind, but let’s try.
Summertime is also the mid-point of the year and it is time to review what acquisition campaigns worked. For those essential businesses that saw lift during the pandemic, which is unusual, however, some industry did see a rise in sales year over year and adjusted their marketing acquisition strategy to adapt to the current pandemic climate.
In an article I posted last year, I wrote about the importance of customer lifetime value (CLV) and return on advertising spend. This is an ongoing effort and an equally important exercise is keeping your eye out on the customer acquisition cost.
What is CAC?
Customer acquisition cost is the total cost that is associated with convincing a customer to buy a product or service. It sounds pretty simple, but it is far more important than you realize. This process can:
- Help optimize your ROMI. (Return on marketing investment)
- Increase profit margins by reducing the overall acquisition cost
- Helps you determine the value of that customer you acquired.
This analysis can help you determine the financial health of your business and gives you a good perspective of which channels are costing you far more than it is worth. It’s basically paying more for bottled water at the beach than you would have to pick it up at the store.
So, summertime is not all sun, sand, and sea. Take this time to conduct a review of your CAC and determine what is in or out for the fall. What changes have you made mid-year to your channel marketing initiatives based on CAC? Share your thoughts and comment below. And don’t forget to read up on other marketing-related geeky stuff on my blog.