Why The Fort Worth Market Has Not Crashed

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It's a little more complicated here. There are two formulas for calculating this indicator. The first one is simplified. CAC Ad spend  Number of customers that came from this ad The second is more complex but also more accurate. CAC u d Advertising expenses Salary of specialists who work with it Costs associated with the sale for example payment for the work of managers. when you calculate the return on advertising When you have calculated the LTV and CAC values ​​for your business you can find out the payback of the advertising channel simply and quickly.
  
It is enough to analyze the ratio of these two indicators. How exactly to analyze CAC and LTV let's look at a specific example. Input data. Suppose you have a small beauty salon. client on average brings you an income Whatsapp Mobile Number List of rubles. per month shorn once a month. In the agency you ordered the setting and maintenance of contextual advertising. For setting up and running a campaign you pay rubles to the agency's specialists. per month and pay the advertising system for clicks on ads. Advertising budget rubles. per month. For a month on average customers contact you from this advertising channel. As usual the effectiveness of advertising is incorrectly considered. They take all the costs for a month of advertising in the context we have rubles. rubles rubles Divide the costs by the number of clients clients per month.



CAC u d  u d rubles. the cost of attracting one client. Compare the revenue that the client enters and the cost of attraction. rub. earned and rubles. spent Ratio  With this calculation the client costs much more than the salon earns on it more than times  when advertising works in the negative What conclusion can the business owner draw from such a calculation. That's right we need to immediately stop advertising. She works in a big minus. How to correctly calculate the effectiveness of advertising. The client visits the salon once a month. And on average he is a client of the salon for one year and sometimes more.