The Importance Of Lifetime Value And Cost Per Acquisition In Business Campaigns

PPC campaigns and SEO require a cash investment. The two primary concerns are CPA or cost per acquisition and LTV or lifetime value. CPA amd LTV are much more important than click totals, impressions and rankings because they signify the operation is running smoothly. It is impossible to know what move is necessary without knowing the LTV and CPA because there will be unknown costs.

There are numerous options for scaling a business including advertising, upsells and product expansion. Business growth requires client base growth or an increased value for existing clients. These options are not cheap or easy. Email marketing is an option that requires content creation, overhead and labor. This is all part of the acquisition costs and adds an expense for each client acquired. Every business is different even if the services and products are the same.

The LTV must be established to know the acquisition costs. It is five times cheaper to sell to existing customers than spending money to acquire new customers. A generalized LTV value can be established by totaling the existing customers along with their annual revenue. When this total is divided it reveals the average amount a customer spends in a year. Once the LTV has been raised funds can be spent on new customer acquisition.

Marketing and direct mail are more targeted campaigns to land valuable clients. Acquisition campaigns can be customized to drive dedicated traffic resulting in valuable, targeted accounts. Acquisition is much easier once the customer lifetime value has been established. The old SEO optimization and PPC ads are not necessary to land clients. LTV and CPA can help improve sales to existing prospects. Email campaigns can be created to focus on remarketing customers who only made a single purchase to increase sales.

Investing and pampering existing customers will provide reasons for them to stay. This will dramatically increase their average spending. As the business grows additional employees can be hired. The will be invested in the success and growth of the business to help sustain and grow the business. A flat rate for all customers is not the best option. As a clients business grows they will need more services and new plans can be created to increase the cost. This is beneficial for the growth of both the clients and the business.

A site audit can be conducted to find out if a client needs something that would be a benefit but is not being provided. There are tools that show what type of technology a client is using. This provides insight into any gaps enabling the business to try and sell additional services. Upsells can be used for a lot more than just making money. They can provide opportunities for a client to grow. This will help ensure they remain a client for many years. These are some of the ways to create clients with a high lifetime value. This means money will be reinvested into the business and the funnel will continue to expand and move forward.

The most important considerations for scaling any business using either SEO or PPC are acquisition costs and lifetime values. Lifetime values should be focused on first because this will enable the business to spend more money on acquisitions. A cylindrical process and better campaigns will enable the business to acquire the best clients possible. Sales to existing customers are the beginning of acquiring additional clients in the future.