As I was comparing my years of notes and research on the topic of marketing, there were a lot of informational “nuggets” that stood out. There was one concept however that stood out more than any other that we at Tier3 Agency have coined the golden formula of marketing. This formula is the only sure tell way for any company to be successful in the long run. There are a lot of marketing concepts that matter, many of which we cover in our blog, but this specific metric is the top dog.
The golden formula is:
CAC < CLTV
So what does this mean? This golden formula of marketing is “customer acquisition cost must be less than the lifetime value of a customer.” The larger the difference is between these two numbers, the more financially successful your company will become. As a marketer, you have a direct impact on both sides of this equation, through the strategies and tactics of acquiring customers and through maximizing the value of the customers you create. Throughout every function you do in marketing, keep this formula in mind as it will help to build a financially successful business.
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