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Kevin C. Whelan

Marketing Strategy Advisor and Mentor

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December 18, 2020

The two most important metrics in marketing

When it comes to marketing, there are a LOT of metrics you can keep track of. But at the end of the day, it all boils down to two key numbers:

  1. What is the expected lifetime value of my clients or customers?
  2. How much does it cost to acquire new clients or customers?

Based on these numbers, you can ask questions like:

Is my cost per acquisition number profitable?
If not, you might have a product or marketing problem. You can begin looking into other numbers for more insight.

Do I have enough new customers to sustain my goals?
If not, you need to scale up your marketing efforts. Make sure you do it in alignment with the previous question about profitability.

How long will it take to recoup my investment?
This will be different for everybody, but ideally you will recoup your investment within a couple months. You’re making an investment and want it to pay you back before you run out of free cash flow.

At the end of the day, if you can get new clients or customers for meaningfully less than your expected lifetime value, and you have enough new clients to cover attrition and grow at the speed you want, that’s all that matters.

All of the other metrics serve these two metrics. Just make sure you’re actually tracking these numbers.

Filed Under: All Audiences, Marketing

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