Tips for Reducing Telemarketing Employee Turnover

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This metric, when compared with the cost of acquiring that customer (CAC), results in the profits that the business obtains throughout the customer's lifetime. Also read: Formula and How to Calculate Customer Retention Rate Customer Acquisition Cost Function The cost of acquiring a customer is an important metric for both: business and investors who invested in that business.From the business owner's perspective these metrics convey the viability of the business model and what needs to be improved to earn more profits. High CAC and low CLV, means the current acquisition process needs improvement and low CAC implies that the business is spending money efficiently and will see higher profits.From an investor's perspectiveThis metric is important for calculating how much investment a business needs to stay afloat.


Additionally, it also conveys the feasibility of this albania phone number library investment to investors as it helps calculate the ROI. For example, investing $ million in a startup to help it market itself and reach customers is only justified if the startup is viable enough to earn more than the amount invested – lifetime value should be more than the acquisition cost.While CAC is an overly segmented, agnostic KPI, it is more often used by businesses operating on SAAS and subscription-based models.Customers of such businesses stick around for a long time, paying on a recurring basis, making their CLV more than their CAC.Read Also: Knowing Consumer Insight for Better Business How to Calculate Customer Acquisition Cost Generally, CAC is calculated by dividing all costs incurred to acquire new customers by the number of customers acquired in a certain time period.


Customer Acquisition Cost Formula CAC Formula = Total costs incurred to acquire new customers in a certain period / number of customers acquired in a certain period Customer Acquisition Cost Costs included in CAC: These costs include all sales and marketing costs, which are further divided into: Marketing Costs ( M): Total marketing costs to acquire customers. These costs include advertising costs as well.Employee Salaries (E): Salaries related to marketing and sales.Professional Costs (P): Costs incurred for professional services such as design, consulting, etc.Sales Costs (S): Sales related costs ( eCommerce commissions, brokers, etc.).Software and tools (ST) costs: This includes all costs incurred to purchase, run, and operate the software used in the marketing and sales process.