ATC – average conversion time.
Posted: Sat Jan 18, 2025 7:32 am
T – total time spent on all transactions.
Customers – the number of buyers who successfully completed the transaction.
This metric shows the productivity of the sales funnel, allowing you to make informed decisions about the amount of effort that should be applied to closing a particular opportunity.
Time resources are directly related to financial ones. For example, if the subscription fee for the service is 1000 rubles per month, and it takes more than six weeks to close the deal, the probability of losses for the seller is very high.
By analyzing this metric in combination employment data paqckage with other key sales metrics (such as conversions and volumes by contact type), you can gain a deep understanding of how your funnel works and determine which elements are most effective in achieving your goals.
Sales managers can use this information to accurately forecast sales volumes.
Customer Acquisition Cost (CAC)
How much do you need to invest to attract one client? The answer to this question is given by the key indicator of unit economics – the cost of attracting a customer. This metric takes into account all expenses for this process (sales organization, advertising, etc.).
Sales Funnel
Source: shutterstock.com
Let's take social media advertising to attract customers to a subscription sales page as an example. If the cost is 180 rubles per lead and leads to a subscription costing 600 rubles per month, the deal looks attractive.
However, if we include the salaries of employees involved in sales and marketing, and the average conversion period is 70 days, the picture becomes more complicated. In this case, it is necessary to take into account all the costs incurred during this period (for example, the salaries of marketers and the costs of advertising campaigns). With this approach, we get an accurate estimate of CAC.
Therefore, the calculation of the cost of attracting a client is represented by the formula:
CAC = Costs / Customers
Where
Costs – the total amount of expenses associated with sales (including marketing costs, employee salaries, etc.).
Customers – the number of buyers who successfully made a purchase.
Another important thing to always consider in the context of sales metrics is customer acquisition costs (CAC). A business cannot afford to operate at a loss for several years in a row. Examples of Uber and Tesla, which can afford to do so in the hopes of increasing market reach and subsequent price increases, are the exception that proves the rule. Most businesses must ensure that every transaction they make is profitable.
In addition, the most effective strategies for increasing profits involve reducing the cost part of the budget. A careful analysis of this metric opens up the opportunity to identify the most rational areas for investing time and money to increase business profitability.
Entering into transactions where expenses exceed income inevitably leads to failure.
Customer lifetime value (LTV)
Customer value is the total revenue that a customer brings in over their entire life cycle, from their first purchase until they leave the customer category for some reason.
Customer lifetime value (LTV)
Source: shutterstock.com
This metric allows you to evaluate the amount of profit that a consumer provides over the entire period of cooperation with the company. With its help, you can calculate the average income that a buyer brings over the entire life cycle.
For example, for online cinemas, the customer value is calculated based on payments for a regular subscription and periodic purchases of films that are made throughout the entire period of using the platform. The Lifetime Value (LTV) metric does not have a well-established name in the Russian version, so the English abbreviation is most often used.
For analysis, average indicators are more interesting. Thus, the following formula can be used:
LTV =
Customers – the number of buyers who successfully completed the transaction.
This metric shows the productivity of the sales funnel, allowing you to make informed decisions about the amount of effort that should be applied to closing a particular opportunity.
Time resources are directly related to financial ones. For example, if the subscription fee for the service is 1000 rubles per month, and it takes more than six weeks to close the deal, the probability of losses for the seller is very high.
By analyzing this metric in combination employment data paqckage with other key sales metrics (such as conversions and volumes by contact type), you can gain a deep understanding of how your funnel works and determine which elements are most effective in achieving your goals.
Sales managers can use this information to accurately forecast sales volumes.
Customer Acquisition Cost (CAC)
How much do you need to invest to attract one client? The answer to this question is given by the key indicator of unit economics – the cost of attracting a customer. This metric takes into account all expenses for this process (sales organization, advertising, etc.).
Sales Funnel
Source: shutterstock.com
Let's take social media advertising to attract customers to a subscription sales page as an example. If the cost is 180 rubles per lead and leads to a subscription costing 600 rubles per month, the deal looks attractive.
However, if we include the salaries of employees involved in sales and marketing, and the average conversion period is 70 days, the picture becomes more complicated. In this case, it is necessary to take into account all the costs incurred during this period (for example, the salaries of marketers and the costs of advertising campaigns). With this approach, we get an accurate estimate of CAC.
Therefore, the calculation of the cost of attracting a client is represented by the formula:
CAC = Costs / Customers
Where
Costs – the total amount of expenses associated with sales (including marketing costs, employee salaries, etc.).
Customers – the number of buyers who successfully made a purchase.
Another important thing to always consider in the context of sales metrics is customer acquisition costs (CAC). A business cannot afford to operate at a loss for several years in a row. Examples of Uber and Tesla, which can afford to do so in the hopes of increasing market reach and subsequent price increases, are the exception that proves the rule. Most businesses must ensure that every transaction they make is profitable.
In addition, the most effective strategies for increasing profits involve reducing the cost part of the budget. A careful analysis of this metric opens up the opportunity to identify the most rational areas for investing time and money to increase business profitability.
Entering into transactions where expenses exceed income inevitably leads to failure.
Customer lifetime value (LTV)
Customer value is the total revenue that a customer brings in over their entire life cycle, from their first purchase until they leave the customer category for some reason.
Customer lifetime value (LTV)
Source: shutterstock.com
This metric allows you to evaluate the amount of profit that a consumer provides over the entire period of cooperation with the company. With its help, you can calculate the average income that a buyer brings over the entire life cycle.
For example, for online cinemas, the customer value is calculated based on payments for a regular subscription and periodic purchases of films that are made throughout the entire period of using the platform. The Lifetime Value (LTV) metric does not have a well-established name in the Russian version, so the English abbreviation is most often used.
For analysis, average indicators are more interesting. Thus, the following formula can be used:
LTV =