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ACQUISITION VS. RETENTION. THE STATS THAT WILL SAVE YOUR ECOMM STORE.


Acquisition vs Retention

Do you know how much you're able to spend on customer acquisition?


If you don't, don't be ashamed - most brands don't either!


Sure, there are fancy acronyms such as ROAS, CPC, and CPA that dazzle brands but they only tell part of the story. To get the full picture on customer acquisition and retention success, we've got to get comfortable with some 'boring' numbers.


So what are these 'boring' numbers we're referring to?


Well for starters, let's look at gross margin. This number tells us about profit after subtracting all costs associated with producing goods or services in order to make a sale.


Next up is CAC (Customer Acquisition Cost). This metric measures the total cost of acquiring a single paying customer - this includes things like marketing and sales costs.


We then move onto purchase frequency - this is simply how often an average customer will buy from your business over a period of time.


Finally, and maybe most importantly CLV (customer lifetime value) which helps us answer questions about how much revenue can be expected from an individual customer over their entire relationship with your brand.


Once we understand these 'boring' numbers it makes our decisions easier when trying to figure out how much money to spend on customer acquisition and retention. We can execute advertising campaigns and budgets with confidence, knowing which channel we should focus on most when attempting to reach new customers. Our decisions become more data-driven when factoring in metrics such as CLV and CAC because now were able to calculate how many customers we can acquire without breaking the bank.


Whilst they may not be the most exciting metrics they can provide valuable insights into spending habits so that budgeting for ads becomes much easier, less scary, and way more profitable!


With proper analysis of gross margin, customer acquisition cost, purchase frequency, and customer lifetime value; you'll have a strong foundation for making sound decisions when it comes to creating targeted campaigns for acquiring new customers while also retaining current customers for maximum return on investment!


When looking at customer acquisition and retention, it's time to get comfortable digging into your 'boring' numbers before diving into the more glamorous metrics so that you have a better understanding of what you can afford when acquiring new customers & retain existing ones! By doing this you'll gain valuable insights into spending habits that will help create effective ad campaigns while keeping your budget intact!

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