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Formulas:
1.
Return on Investment (ROI):
ROI = (Net Profit / Marketing Costs) x 100
This formula helps assess the profitability of marketing campaigns by measuring the return on investment in terms of revenue generated compared to the cost of marketing.
2.
Customer Acquisition Cost (CAC):
CAC = (Total Marketing and Sales Costs) / Number of New Customers Acquired
CAC measures how much it costs to acquire a new customer through marketing and sales efforts.
3.
Customer Lifetime Value (CLTV or CLV):
CLTV = (Average Purchase Value x Average Purchase Frequency) x Customer Lifespan
CLTV estimates the total revenue a business can expect from a single customer over their lifetime as a customer.
4.
Conversion Rate:
Conversion Rate = (Number of Conversions / Total Visitors) x 100
This metric calculates the percentage of website visitors or leads who take a desired action, such as making a purchase or filling out a contact form.
5.
Market Share:
Market Share = (Company's Sales / Total Market Sales) x 100
Market share measures a company's portion of total sales within a specific market or industry.
6.
Customer Retention Rate:
Customer Retention Rate = ((Number of Customers at the End of a Period - Number of New Customers Acquired During the Period) / Number of Customers at the Start of the Period) x 100
This formula calculates the percentage of customers a business retains over a specific period.
7.
Click-Through Rate (CTR):
CTR = (Number of Clicks on an Ad / Number of Impressions) x 100
CTR is commonly used in digital advertising to measure the effectiveness of online ads.
8.
Cost Per Click (CPC):
CPC = Total Advertising Cost / Number of Clicks
CPC is used to determine how much it costs to generate a single click on an online ad.
9.
Cost Per Thousand Impressions (CPM):
CPM = Total Advertising Cost / (Number of Impressions / 1,000)
CPM is a measure of the cost of 1,000 ad impressions in online advertising.
10.
Net Promoter Score (NPS):
NPS = % Promoters - % Detractors
NPS is a metric used to gauge customer satisfaction and loyalty by asking customers how likely they are to recommend a product or service to others.
