The Marketing calculator

Marketing Calculator Details

This calculator answers the most common questions for marketing. 

1. ROAS (Return on Advertising Spend):
   ROAS is a metric that measures the revenue generated for every dollar spent on advertising. It is calculated by dividing the total revenue from advertising by the cost of the advertising. A higher ROAS indicates more effective advertising in terms of revenue generation.
2. CPL (Cost per Lead):
   CPL represents the cost incurred for acquiring a single lead through marketing efforts. It is calculated by dividing the total cost of a marketing campaign by the number of leads generated. A lower CPL indicates that leads are being acquired at a more cost-effective rate.
3. (SCR) Sales Conversion Rate:
   Conversion rate is a percentage that reflects the proportion of website visitors or leads who take a desired action, such as making a purchase or filling out a form. It is calculated by dividing the number of conversions by the total number of visitors or leads and multiplying by 100. A higher conversion rate indicates a more effective conversion process.
4. CAC (Customer Acquisition Cost):
   CAC is the average cost a business incurs to acquire a new customer. It considers the total cost of sales and marketing efforts divided by the number of new customers acquired during a specific time period. A lower CAC implies that acquiring customers is cost-effective for the business.

Understanding and monitoring these metrics is crucial for businesses to evaluate the efficiency and effectiveness of their marketing and advertising strategies, helping them make informed decisions and optimize their campaigns.

All of these marketing numbers are called marketing metrics. They are always a number and they are always measurable.

How to improve your Marketing metrics

To be successful in your business you want to adjust your numbers to get better results.  You will want to:

• Increase your ROAS
• Decrease your CPL
• Increase your SCR
• Decrease your CAC 

How are these Marketing Metrics calculated?

Here are the calculations for each metric in the context of the ROAS calculator:

1. ROAS (Return on Advertising Spend):
   • ROAS is calculated by dividing the Advertising Revenue by the Advertising Cost.
2. CPL (Cost per Lead):
   • CPL is calculated by dividing the Advertising Cost by the Number of New Leads.
3. CAC (Customer Acquisition Cost):
   • CAC is calculated by dividing the Advertising Cost by the Number of New Clients.
4. SCR (Sales Conversion Rate):
   • SCR is calculated by dividing the Number of New Clients by the Number of New Leads and multiplying by 100 to express it as a percentage.

These calculations provide insights into the efficiency and performance of advertising campaigns. A higher ROAS and SCR are generally favorable, indicating more revenue and a better conversion rate, while lower CPL and CAC suggest cost-effective lead generation and customer acquisition.

Other Sales and Marketing metrics...

There are some other marketing numbers you should be aware of that are not in this calculator. These additional methods are great ways to increase your income. These include

• Average Sale Value (ASV) or just Average Sale (AS)
• Average Items Per Sale (AIPS)
• Customer purchase frequency (CPF)
• Life time value of a client (LTV)
• Monthly Recurring Revenue (MRR)
• Income per employee (IPE)

For better marketing results,
contact an IBA United Business Advisor today.