Determining Customer Value
Once you’ve figured out the overall cost of turning a lead into a sale, you need to figure out the ROMI (if any) to your company from acquiring that customer and making the sale. You can do this in two ways. First, you can assess the overall CPA against the purchase value of that single purchase. Second, you can assess the overall CPA against the lifetime value (LTV) of that customer.
It’s a common notion among marketers that the cheapest actionable leads you can obtain are the most cost-effective. If you are selling a product for $100, it seems logical to use a tactic that generates actionable leads at an overall CPA of less than $100. A tactic with a CPA of $5 per acquired actionable lead might be ideal.
Some lead-generation ...
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