CAC is an averaged metric

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Build a solid balance between performance marketing and brand building Although brand-building activities can't actually lead to conversions, they play an important role in converting visitors into customers. But it won't happen overnight. In fact, if brand building is delayed, these activities can actually increase CAC in the short term (~1 year) because they do not have an immediate impact on sales. However, the long-term results are very positive, including lower CAC. As a general rule of thumb, the ideal balance of marketing spend between sales growth and brand building is approximately 40:60. This is one of the most important marketing concepts to keep in mind. A lot of research has been done on this . Importantly, brand building has been proven to be a key driver of long-term growth and success. What problems does CAC have?


We already mentioned that CAC is an averaged metric with attribution issues. Let me elaborate on that before I get into two other small issues. Attribution issues when getting more granular data The most useful segmentation you can perform with Australia Phone Number Data  CAC is customer segmentation. For example, if you look at our pricing model , we're willing to spend many times the average CAC to acquire a customer on an agency plan. However, it is nearly impossible to obtain the reliable data needed for this calculation to know whether you spent $X on segment A or $Y on segment B. Most marketing channels target multiple segments. While there are possible solutions to creating more reliable attribution models, creating a custom data ecosystem typically requires large amounts of data and resources. And even this does not solve the attribution problem faced by some


       


B2B companies targeting the enterprise segment. For this reason, we recommend that most people follow the simple CAC formula. Consider business cycles It's intuitive to divide the amount you spend on marketing and sales each month by the number of new customers you acquired that month. I used it in the example here as well. However, this only works if your expenses are consistent from month to month. The problem lies in the business cycle. Considering the new users in March, a significant portion of them converted thanks to his marketing efforts in February or earlier. Of course, it's impossible to track everything, but you should know how many days it takes on average for a visitor to convert from their first visit. If you have a 14-day trial, your average business cycle could be 2-4 weeks.