Do you know exactly how well your customer acquisition marketing is performing?
You’ll obviously have a general idea – if it feels like you’re busier, or that you’re onboarding more clients than before. But a marketing strategy can’t be run on feelings alone.
It can’t even be run just by looking at the number of customers you’ve brought on in a specific timeframe. To really get to grips with customer acquisition, you’ll need to track a range of essential metrics that go far beyond the number of new customers onboarded that week.
1. Customer Acquisition Costs (CAC)
On the face of it, your acquisition strategy is working well. You’ve signed up 30 new customers this month, up from 18 this time last year. But your bottom line doesn’t seem to have improved at all.
By keeping track of your customer acquisition costs (CAC), you’ll know how cost effective your efforts are. Because spending more to bring on a customer than they’ll pay your business is a surefire sign that your marketing isn’t working.
CAC can be calculated using the following equation:
Sales costs + Marketing costs / Number of new customers
So if you’ve spent £1,200 on sales, £5,000 on marketing and brought in 7 new customers, your CAC will be £885.71 (1200 + 5000 /7).
That’s great if each new customer is worth £5,000 to your company, but not-so-great if they’re only worth £500.
2. Customer Lifetime Value (CLTV)
To know whether or not your CAC is sustainable, you need to know how much each customer is worth to you.
The way to track this is by calculating their lifetime value (CLTV) – the amount of money they’ll spend with your business over the duration of your relationship. Again, there’s a simple equation:
Average sale x Number of repeat sales x Average lifespan of a relationship
Let’s say you’re selling a monthly contract worth £1,000, and customers stay an average of five years:
£1,000 x 12 (Months) x 5 (Years) = £60,000.
If that figure’s substantially higher than your CAC, then you’re on the right track.
3. How Many Gifts Have Been Redeemed?
Those two metrics will give you a general idea of whether your customer acquisition marketing is working. Having a customer acquisition cost that’s lower than your customer lifetime value shows that your efforts are working.
But if you’re running an incentive-based campaign, you need to track certain metrics to analyse the specific performance of your gifting efforts.
The first thing to look at is how many gifts have been redeemed. If it’s higher than the number of customers you’ve onboarded, there’s an issue with people taking advantage of your generosity, and it’s time to look at closing loopholes.
But, on the other hand…
4. How Many Rewards Have Been Left Unclaimed?
… if you’ve brought on 100 new customers this month, and you have 80 rewards left unclaimed, then your incentive campaign clearly isn’t responsible for the increase in sales.
Even worse, it means the money you’re spending on incentives is being wasted, as your leads either aren’t seeing them or are ignoring them completely – even though they’re happy to do business with you.
If you see figures like this, it’s time to reconsider the rewards your customers can claim.
5. Which Gifts Are Most Popular?
Even when your incentive marketing is working, and clients are redeeming their rewards, you need to know which gifts they choose. It helps with ordering, with preventing over and under-stock issues, and with customising and tailoring your reward schemes.
Keeping track of which gifts are most in demand can be time consuming, and it’s not easy to change rewards quickly if you’re placing bulk orders in advance. Not if you’re running a manual customer acquisition campaign.
But if you embrace digital incentive marketing, you could change rewards instantly, based on the very latest trends. Or you could give your leads free reign to choose whatever gifts they’d like from one of the world’s largest retailers.
Improve your acquisitions with Gift & Go
If your rewards aren’t being claimed or you’re rapidly running out of the most in-demand gifts, then Gift & Go can help.
We’ll give your leads access to millions of gifts from the world’s largest marketplace thanks to our Amazon integrations, and because there’s no need for you to purchase and hold stock, we’ll reduce that all-important CAC.
And because Gift & Go is built as a dedicated incentive marketing platform, we can help you track a whole host of metrics to keep your campaigns running smoothly.
Apply for a free trial or book a demo and claim your free gift.