Identify an ROI with your digital marketing investment

Metric #4: Creating A CAC And Understanding Your Investment In Digital Marketing

In some capacity, every business has a cost to acquire. Whether that is a cost to acquire a customer, client, patient, investment, subscription, donation or something else — the customer acquisition cost (or CAC, as we will call it going forward) is — bar none — the most important term in marketing.

This is a critical reporting metric you must look at when drawing ROI conclusions.

To get to your ROI, you need to know what the proper CAC investment weight is. Typically, it is much more than just an investment in digital marketing (although, in a COVID world, you need to start there). You have to factor in all of the need costs across The Buyer’s Journey, like sales and commissions, sponsorships, networking, PR, print collateral, CRMs and more. These will all ultimately lead you to the overall cost you can weigh against your investment.

The mistake that we see companies make comes back to the siloing of efforts and putting the digital marketing investment vs. year-end revenue or the PR initiative vs the year-end revenue. Those are just pieces of the puzzle, some larger than others, but if you are not going to invest what the marketplace is requiring to address funnel deficiencies, establishing a proper ROI is not going to happen. Or, at least, a profitable ROI is not happening.

Keep in mind our service is not looking to sell your more digital marketing services, we are trying to get you to understand that identifying a profitable ROI that hits your revenue goals happens with a properly allocated investment in your customer acquisition cost.