How much do you actually pay to acquire a single paying customer? If you do not know this number, you cannot scale. Make sure you count all media spend, creative costs, and management fees when calculating your CAC.
A customer is not just a one-time transaction. Understanding their lifetime value tells you exactly how much you can afford to pay to acquire them. In high-performing funnels, the LTV:CAC ratio should target 3:1 or higher.
Many agencies optimize solely for leads, but leads do not pay the bills. Track the percentage of leads that convert into paying clients. If this rate is low, your funnel might be pre-qualifying leads poorly.
While ROAS can sometimes be a vanity metric, it remains a critical gauge of immediate campaign profitability. However, it should always be analyzed alongside your overall business net margin.
The cheapest sale is the one you make to an existing customer. Improving customer retention is often the fastest and most cost-effective way to boost your overall marketing ROI.
If you only track one thing, track the gap between what a customer costs and what they’re worth.
TB Creative CO
