Presentation describing how Cost of Customer Acquisition (CAC) and Monetization (LTV) are they key elements to get right for a successful business model. Also describes the latest techniques for reducing CAC, including Inbound Marketing, and the author’s own methodology: Building a Sales & Marketing Machine.
This presentation was given to the tech community in Atlanta on Feb 11th, 2009. It summarizes in a single presentation several of the key themes on this web site.
Customer Acquisition & Monetization
Keys to your Business Model
Keys to your Business Model
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Could you share some stats on the going CAC rates for a B2C retail business. I read on Shop.org that it was on an average $14 per customer. Sounds low for a start-up online business.
I appreciate your help
Rana, I would love to help you, but it turns out these are all over the map due to different conversion rates. If there are any other readers that have views on this, please help by adding your replies.
Rana, this is deeply dependent on conversion rates for traffic, and types of sources used to generate traffic. However if you figure 50-75 cents for PPC, which could be higher or lower depending on the specific keywords, and then take a guess at conversion percentages, you can easily compute the number. For $14 per customer, this would imply a conversion rate of 3.5% to 5% which sounds reasonable. This number almost certainly does not include any people costs.
Best, David
Thanks David,
Although a little late. I am actually live now and learning through practice. CTR's are much lower than my expectations. I am actually spending time on SEO right now and adding more designers/content.
Thanks David,
Although a little late. I am actually live now and learning through practice. CTR's are much lower than my expectations. I am actually spending time on SEO right now and adding more designers/content.