Many of the companies Web Profits consults with simply don’t know their numbers. Whether it’s lead conversion rate, lifetime value (LTV) , or any other important metric, knowing each one is critical to business growth. If you don’t have the information, you won’t know whether you’ve made the right decision or not.
Here's a simple example: Let's say you set your LTV too low, or don't even know what it is. You optimize your marketing campaigns for a low customer lifetime value and end up discontinuing them when they're actually still making you money, thereby reducing your sales and growth.
But your competitors have accurately calculated LTV, and they will panama phone number data have a larger marketing budget to work with sales and, therefore, beat your bids and “steal” market share .
Why is it important to know your metrics? Let us recall that LTV is the lifetime value of a customer , CAC is the cost of attracting a customer.
What can be done?
First, make sure you can trust the data you’re getting across your business as a whole. Make sure you’re tracking all the metrics correctly and extracting the right information through the right systems. If the data is correct, spend time developing the quantitative metrics that matter to you.
Some of these formulas and methods are quite complex: you can calculate LTV in many different ways, for example, using very complex formulas. But you don’t have to be perfect the first time. You can adjust these numbers later to make them more reliable, as you have more data and information available.
While they are relatively difficult to obtain, knowledge of quantitative metrics is worth your time because these metrics will help your business grow in the long term.