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Digital marketing is a constantly evolving field, and one of the most important aspects of a successful digital marketing campaign is the ability to iterate and test creatives. This is particularly true when it comes to Facebook advertising, as the platform is constantly updating its algorithms and features, and what works today may not work tomorrow.

Creative iterating is the process of testing and refining different elements of your ad, such as the hook, call-to-action (CTA), video or/and images. By experimenting with different variations of your ad, you can gain a much better insight and knowledge into what resonates with your audience and dramatically improve the performance of your campaign.

 

 

One of the key benefits to testing creative iterations is it allows you to fine tune and double down on what’s working with your creatives and what’s not. Testing more of what is working allows you to keep producing winning creatives. As we are currently living in a world of TikTok and video creatives – when testing iterations of videos it is good to look at metrics such as Thumb Stop, Hold Stop, CTR, Average Watch Time – to see when people are falling off and are engaged most when watching your content.

Another benefit of creative iterations is that they allow you to optimise your ad for different stages of the customer journey. For example, you may use different ad formats and messaging to target people who are aware of your brand, but haven’t yet made a purchase, compared to those who have already made a purchase and are now looking for repeat business with you. This same process can also be applied to different stages of the funnel.

 

 

Prioritising creative iterations also allows you to test different ad formats. Facebook offers a wide range of ad formats such as image ads, video ads, carousel ads, and more. Each format has its own strengths and weaknesses, and by testing different formats, you can determine which one works best for your campaign and audiences.

Testing can also help to optimise your targeting strategy. Facebook provides a wide range of targeting options, and it can be difficult to know which ones will be most effective for your campaign. By testing different targeting options, you can gain insights into which audience segments are most likely to convert and adjust your strategy accordingly.

But creative iterations and testing is not just limited to Facebook ads. It’s also crucial to test your landing pages and website as well. A/B testing of headlines, images, offers and calls-to-action on your website can help you optimise your conversion rate and increase the ROI of your overall digital marketing efforts.

 

 

In conclusion, creative iteration and testing are essential for a successful Facebook advertising campaign. By dynamically experimenting with different elements of creatives, ad formats, messaging, and targeting options, you can gain valuable insights into what resonates with your audience and optimise your campaigns for the best possible results. 

It’s important to remember that digital marketing is a constantly evolving field and what worked yesterday may not work today, so it’s essential to always be testing and iterating to stay ahead of the game.

 

If you need help implementing and sustaining a dynamic creative testing strategy – that’s where we come in. Find out more about our digital marketing services here – or book a strategy call with our team here.

And just like that, 2023 is officially here! Traditional digital marketing has undergone a huge shift in the last two years, therefore many brands have had to accommodate new experimental ways of advertising. 

Just like fashion, marketing trends come and go; so it is essential that as a brand owner, you should plan your yearly marketing strategy around this fast-paced industry to guarantee your relevancy and stay ahead of the curve. 

Keep reading to discover our top 5 marketing tips to help you stay on track for everything to come this new year…

 

1. UGC & Influencer marketing

It goes without saying that UGC and video-based content remain the top dog in the world of digital marketing. Thanks to the popularity of TikTok, consumers are more likely to try a product or service if they see a ‘real person’ recommending it. 

As of 2022, 93% of marketing professionals use influencer marketing as an effective way to: 

• Reach new audiences 
• Increase brand awareness 
• Build trust 
• Drive conversions 
• Connect to wider audiences 

This new year, take extra time to learn and experiment with UGC influencer marketing in your ad campaigns, you never know the audiences you could reach!

 

2. Iterations, iterations, iterations! 

We’re all guilty of it, throwing anything at a wall to see what sticks. Let’s put an end to that this new year…

Probably one of our favourite tips on this list, make sure to prioritise iterations with all your creative content, whether that’s ad creatives or copy (based on data of simply what’s working, and what’s not working). 

Not only is this a time-saving and cost-effective way of working, but it is also the most efficient way of seeing first-hand what is working best for your audience and what your audiences want to see from you. 

“The intent with iterations is to get closer to the final product with each test. Each time you test, you make minor changes based on the feedback from the audience. When you test and learn quickly from a marketing campaign, you save time from extensive planning on an idea that may not even speak to your audience.” (cprime.com)

Remember, the quicker you test the more you will learn and this will ultimately lead to top-tier creatives that will hopefully resonate with your audiences, as well as make the creative direction clearer going forward!

 

3. Lean into learning new tools

2023 is not the time to be a one-trick pony! Take time to learn up-and-coming tools and techniques, so you’re always prepped for what’s to come. 

Whether it’s just watching a few online tutorials or even attending a full-length course, developing your skills will be hugely beneficial to your long-term success this new year, and will prove to your audience (and competitors…) that you’re paying attention to trends and staying ahead of the game. 

We recommend dedicating at least one hour a week (minimum) to learning a new skill via the following: 

• Youtube tutorials
• Paid online courses 
• Books 
• Podcasts 

A successful marketer is always learning and staying aware of technological/social changes to be at the top of their game – by staying disciplined, you can ensure that’s you!

 

4. Take time to build your brand’s reputation and social responsibility 

Basic advertising practices don’t cut it anymore with the average consumer. With such a huge  pool of similar brands, it can be hard to stick out amongst your competitors. With that in mind, 66% of consumers are willing to consider a brand (and pay more) when said brand demonstrates social commitment. 

Make a point to highlight social responsibility efforts via marketing campaigns 

• Promoting environmentally friendly packaging 
• Promotions that spread awareness of social issues 
• Directing a portion of profit to charity/important causes you believe in

 

5. Consider new targeting solutions 

With Google set to phase out third-party cookies by the end of 2023, that could leave many brands in a sticky situation if not well prepared… 

Cookies play a huge role in target marketing by tracking a user’s behaviour, therefore this removal may have a big impact on delivering a customised experience and could drastically affect your future campaigns. 

In order to keep things running smoothly, we recommend experimenting with different forms of targeting solutions throughout the year (eg email marketing data), and to overall dedicate a good portion of time to understanding what’s on the horizon for the initial removal of third-party cookies, so you can accommodate your late 2023-2024 marketing strategy accordingly.

 

And that’s a wrap! If you need that extra push to make 2023 the best year for your brand’s digital marketing presence, or perhaps need some further advice on the big changes and trends that are due to come, feel free to get in touch with our expert team of social media marketers.

 

Socials need sprucing up? We’ve got you covered.

In this week’s article, we’re covering all things social media – so you can start 2023 off strong on your socials. There’s nothing worse than having creator’s block – so here’s 3 ideas to try if you’re struggling for content ideas and want to vary things up.

 

 

Shareable Content

Result: Reach new followers, boost engagement rate.

 

Whether you’re showing off new products or participating in trends, a great way to build up your social following and present yourself as a valuable presence is with shareable content.

In other words, this is content that your followers perceive as either valuable, entertaining or relatable – and might just share with their own followers. It’s a great way to widen your reach and get your name out there.

You could create educational carousel posts and encourage your followers to save for later (boosting engagement rate and appeasing that enigmatic Instagram algorithm). They’re a great way to communicate lots of informative content in an easily digestible way- and your followers might just reshare them if they appeal to their pain points, needs and interests.

 

 

Or – how about creating ‘memes’, made using popular culture imagery and given relatable taglines to appeal to your audience demographic. Countless accounts are turning to ‘memeworthy’ content to entertain their followers – it’s a sure-fire way to stay consistent, keep your feed interesting and present yourself as ‘on trend’ and up-to-date.

 

 

 

Reach out with Reels

Result: Boost follower count, reach new followers.

 

There’s no denying that Reels have taken the Instagram world by storm. If you wish to grow your following and curate a dynamic feed, Reels are the way to go.

The average Instagram user is more likely to spend their time scrolling through Reels selected for them by the algorithm, rather than their suggested posts. They like the dynamism and entertainment factor of videos – so Reels are the best way to reach new audiences.

Consider how you can utilise reels to prompt a follow – you could introduce your account/brand and tell your story, you could give a preview/summary of the kind of content you share, or participate in trends to appeal to your demographic.

 

 

It might seem like an overwhelming realm to venture into – but it’s worth the investment of your time if you wish to boost your following and keep up with the shift to video-based content. By creating high quality reels and keeping things consistent each week, there’s great potential to take your socials to the next level – and increase trust in your brand.

You don’t have to be a video-editing expert to excel on Reels. They can be up to 60 seconds long – but often, short-form Reels tend to perform the best. It’s all about getting viewers to the end of the video, telling the algorithm that it’s valuable content to be pushed to further accounts.

 

 

How to get started? First set out your vision, planning the clips you’ll capture, then edit them together (which can be done within the Instagram app) and add an engaging track- and text overlay to tell your audience straightaway what the Reel is about. 

Keep things punchy and fast-paced to sustain your audience’s attention and peak their interest – social media prompts a slow attention span, so if clips feel so slow, your potential followers will simply scroll past. 

Avoid this by thinking about what will keep viewers engaged – perhaps an informative caption, a scroll-stopping headline, or a question/situation that appeals to their interests and lifestyle.

Want to begin your Reels journey? Check out this useful article from Later on all things Reels.

 

Brand culture

Result: Boost follower loyalty and trust, give strong first impression on your feed.

 

To build loyalty in your brand on socials, it’s vital to split your content between subtle sales and brand culture. Sharing who you are will strengthen your followers’ relationship with you and they’ll be more likely to stick around for the long term, interested to re-convert when you do share new product releases.

Under the umbrella of brand culture, you could share ‘behind the scenes’ content, fun information about yourself/your team (the appearance of real-life humans and faces will be of particular help in building that trust!), and updates on what you’re getting up to.

 

 

Consistent activity like this is so important for your brand building on socials, to boost followers’ invested in your vision. Plus, when potential followers visit your feed and don’t feel too pushed to convert from the outset, and instead are introduced to your brand in an approachable way – they’re more likely to press that ‘follow’ button.

 

All in all, incorporating these varying content types in your social media strategy will vary up your feed and greatly appeal to the 2022 (and 2023!) Instagram user. There’s a whole host of growth opportunities out there – it’s time to harness your creative side and keep your followers coming back for more.

Let’s get it in 2023 💪

 

Psst.. 💭  If you need dedicated help to give your socials a boost, get in touch with our expert team of social media marketers – we can help you achieve the results you’re looking for (whether you’re a Instagram novice or need a specialist to work with). Find out more about our services here.

Q4 is officially in full swing! And a new quarter calls for some big changes for our favourite social media platforms. Check out November’s breakdown and what to expect this December, in this month’s instalment of Social Media Updates.

 

Twitter

Let’s begin by addressing the elephant in the room, Twitter. It truly feels like everything has gone from 0-100 since Telsa CEO Elon Musk took over the platform in October 2022. And in just less than a month, the app has seen a lot of huge changes both internally and externally…

Musk’s controversial updates have driven numerous media giants into pulling out of advertising via Twitter, due to the introduction of ‘Twitter Blue’, whereby any account (a public figure or not) could have their accounts verified for just $8 a month, what’s the worst that could happen?

And surprise, surprise, a huge uproar in “parody” accounts impersonating and trolling users completely took over the app. This uproar in toxic content spooked the likes of advertisers, out of fear of their brand being linked to hate speech and misinformation…something that Ex-Twitter CEO Jack Dorsey worked to tackle. 

The icing on the cake was Musk’s decision to reinstate the accounts of controversial figures such as Donald Trump and Kanye West, who were initially removed for committing hate speech on the platform, angering many long-term Twitter users who have “lost faith” in the platform’s morals. 

The future of the platform seems to be up in the air, with the hashtag #RIPTWITTER going viral due to the rumours of the app potentially closing down in relation to Musk’s handling of the platform. But right now, only time will tell what’s next in store for Twitter…

 

Facebook/Meta

With the festive season approaching, social media usage is at an all-time high across all different age ranges. To tackle the potential of younger users interacting with harmful content or accounts, Meta has implemented stricter privacy controls for any user who are age 16 or younger. 

This update includes restricting who can see your friend list and pages you like, hiding any posts you have been tagged in, and restricting non-connections from commenting on public posts. 

Although users can revert these updates if they choose to, establishing this update as ‘the norm’ could be really effective in keeping younger users safe online.

 

Instagram

It’s official! Instagram has rolled out its new in-app scheduling feature. With this new update, any professional account is able to pre-plan Reels, Photos and Carousels for up to 75 days. 

Depending on which platforms you post on regularly, this update could compete with scheduling apps such as Loomly, Hootsuite and Buffer…

Will you be taking your Instagram scheduling in-app or are you sticking with your preferred scheduling platform? Let us know!

 

TikTok

If you’re big on Tiktok Advertising, this is the update you’ve been waiting for…

The video-based platform has added a very insightful update to its ad manager, which enables you to gain access to specific audience information such as a user’s personal interests, app usage, gender splits and more! 

This update could be a game changer for advertisers as you will be able to perfectly refine your content to appeal to the correct audience, no matter the niche. 

“Audience Insights can help you discover new audiences beyond those that you traditionally target. If any surprising or unexpected interest categories appear, you can try targeting these interest categories to see how they perform. For example, the data may show that the beauty advertiser’s audience is also interested in apparel and accessories, or in-app games. The advertiser may then consider targeting these interests to find new ways to scale.” – Tiktok 

The update has been live since November 16th and is worth checking out! So if you start seeing ‘spookily accurate’ TikTok advertising during this next quarter, don’t be surprised!

 

And there you have it! What are your thoughts on these latest features and updates? 

Here at Social Nucleus, we have an expert team of dedicated Account Managers and creative executives who thrive in making your business’s social media presence as successful as possible, no matter the platform. Book a call with us today 🚀

As a brand, it’s important to keep tabs on your KPIs (key performance metrics) to measure the success of your marketing platforms, evaluate customer loyalty and budget for your business’s success.

Here’s 4 key metrics you need to be tracking all year round as you build your brand and strive for success – and how you can optimise them 🚀

 

 

1.LTV (Lifetime Value)

LTV shows how many times your current customers are coming back to your site to purchase more from you.

With this data you can begin to work out the average spend of your customers over time, which can be considered in your marketing budget. The longer your business is running, the more accurate the data becomes.

A few great ways to improve your LTV is to start looking into SMS and email marketing to keep your subscribers and customers up to date with your brand news – and consequently, boost brand loyalty.

You could also introduce a loyalty program to provide incentives and rewards, which encourages existing customers to return to purchase again and again.

 

💡 Here’s a great article if you want to find out how to calculate LTV and why it’s such an essential metric.

 

2. AOV (Average Order Value)

Your AOV tells you the average amount customers are spending at once on your website. It’s a great way to make realistic goals when acquiring new customers through digital marketing.

One of the best ways to increase your AOV is to implement an upsell pop up within your website, which appears when customers are shopping, adding to basket or completing their purchase at the checkout. This prompts them to check out other products they may be interested in buying.

Another effective way we have found to increase AOV is to offer incentives- for example; spend £100 and receive free shipping, or buy X and get 20% off.

 

 

3.CAC (Customer Acquisition Cost)

Your CAC tells you how much it is costing your business to get new customers through marketing. To work this out you will need to divide the amount spent on marketing by the number of new customers.

To improve your CAC you will either need to look at your digital marketing data or website. You can judge which one may need adjusting first by analysing data based on your ads’ CTR (click-through rate) and CPM (Cost Per a Thousand Impressions) to see if they are underperforming.

If they are, you may need to look into improving your ads, however if they are performing well you will need to look at your customers’ journey upon landing on your website to see what could be preventing them from becoming a customer.

 

💡 It’s crucial to compare your CAC against your LTV (Average Lifetime Value) – in this article, we go through exactly what you need to know.

 

4.CVR (Conversion Rate)

Last but not least, your CVR is the number of people who purchased from your store out of the total number of people who visited.

If you are with Shopify this should show you automatically, however if not you will need to divide the number of purchases by the number of visitors, then multiply the total number by 100 to give you a more accurate percentage.

To improve your CVR you will need to begin by analysing your website and customer journey to see if there is anything that can be changed or implemented to boost your CVR.

Try looking and comparing the number of purchases to the number of people adding to cart/initiating their checkout process. This will be a good indicator as to where your potential customers may be falling off.

 

That’s all four – if you need extra help with optimising the above KPIs, why not get in touch with our expert team? We’re help to talk all things digital marketing and analytics – and we could be a great fit for your brand if you’re looking to grow- or just need that extra helping hand.

 

Book a call now – we’re looking forward to speaking with you 🚀

When creating ads on Meta it can be tricky to decide where to start, let alone finding the best methods for creating adverts that convert profitably. In this blog we will highlight 3 steps for creating Meta ads that boost your conversions.

 

1. Killer Creatives

With Meta ads, grabbing people’s attention as they scroll through the platforms is the aim and the first way to do this is with the creative. The more people’s attention you grab, the more likely you are to have them click through to your desired website or landing page- and convert.

Bespoke content always performs better than generic, stock photos. You want your ads to speak to audiences, letting them know that your brand is the one they need. This requires a huge amount of testing with different types of creatives, from photos to graphics to videos. You’ll have to experiment with the format content is delivered and find out which works best for your brand or product – ie how your audiences respond to it with clicks and conversions.

For example, carousels can be a great way to show off a variety of products in a specific range, while a single image ad will centre the focus on one image and might be more suitable for a single product.

Whatever form you use, you have to make sure the imagery is the best quality possible. If the sizing or resolution is off, then this will give a poor first impression to potential customers. While killer creatives can be the thing that initially attracts people to your brand, poor ones can have the opposite effect.

 

 

 

 

2. Engaging copy

While having a killer creative is what makes people stop scrolling, copy is what will significantly help keep audiences engaged in the ad.

When it comes to copy, there isn’t one universal way of writing as it all depends on what you are selling, what industry you are in and who you are targeting. However in a general sense, here’s a few tips to help…

Firstly, keep the copy as concise and straight to the point as possible. When it comes to ads, short and snappy sentences tend to be more effective in conveying key information. Try to get your message across in as few words as possible and make it as easy as possible for the audience to digest the content.

Next, keep in mind who you are talking to. For example if you’re a fashion brand you may want to highlight your brand’s values, quality of clothing, shipping times and discounts. If you are offering a building service you may want to highlight the services you offer, times and contact details, whilst portraying an informative, professional tone of voice.

Lastly, incorporate clear Call To Actions in your messaging (CTAs). No matter what you are selling or where you are trying to direct your audience, calls to actions are vital. Most customers need to be told where to go and what to click – without having clear messaging like this could massively affect the amount of people who click through to your desired website or landing page. Have wording such as ‘click the link to shop now’, ‘shop now’, ‘book a call below’, etc.

 

 

3 – Landing Page & Destinations

One of the most important things to consider when making Facebook ads is your brand’s landing page. Even the best creatives and copy won’t mean anything if your landing page isn’t optimised correctly to convert. For example, if your page takes over a minute to load, looks visually unappealing and doesn’t direct them to products or ranges mentioned in the ads, then prospective customers are going to be put off straightaway.

There are several things you can do to boost your chances here. To start, consistency between your ads and landing pages is key. If you’re advertising for a certain product on your site, you need to make sure users are directed to that specific page.

This is because customers want to get to their purchase in as few clicks as possible, not browse your site looking for the item. If they are immediately brought to a good product page, with clear CTAs and enticing USPs, then they will be much more likely to make a purchase than without.

Another quick tip is to make sure the Facebook Pixel is connected correctly to your website or landing page. This means that Facebook can track any data going between customers seeing your ads and onto your desired landing page. 

 

These are just a few of many tips to help you create Meta ads that convert. If you would like further information or insights into how to improve your Meta ads please do get in contact with our expert team. We are always happy to help! 🚀

Social media marketing for small businesses can be a tricky thing. For a start, you may not have the dedicated departments of the big brands. If you’re the sole voice of your business’s social media presence, then it can be very difficult to work out a strategy that is both efficient and cost-effective. At times, you might be tempted to think the whole thing is pointless. That couldn’t be further from the truth though; social media is a vital tool in boosting your brand’s optics, increasing acquisition and getting your name out there.

While you might not be able to match the might of powerhouse marketing departments, there are several things you can do to strengthen your current strategy. With that in mind, here is Social Nucleus’ 5-step guide to social media marketing for small businesses.

 

Different Methods for Different Platforms

Let’s start with the basics; don’t put out the same type of content on different platforms. For example, Facebook is a great way of connecting with prospective customers more colloquially. Here, those that have liked your page are looking for product updates, promotions or even just a witty post!

However, if you’re making a post for LinkedIn, then the audience is going to be very different. LinkedIn is the ‘professional’ social media, those using it are often looking to make business connections or find work. Here, you might find avenues for B2B marketing or raise engagement through posts that give a deeper insight into your own business.

You have to consider the constraints of certain platforms as well. While Twitter may afford a lot of versatility in terms of the content you can put out, you only have 280 characters to deliver it effectively. Posts will have to be short and snappy, but you may find it difficult to convey your message with such limited space.

Then you have the more visual platforms, like Instagram and YouTube. Here you’ll have to navigate the difficult realms of photo and video content, which require completely different skillsets. The production value and consistency of posts will determine your success. While you can get away with unstructured posting on Facebook and Twitter, you’ll need a carefully planned routine for these platforms. If your followers are used to seeing a couple of posts per day, plus stories, and you suddenly stop, this is going to negatively affect your engagement.

This might all seem like a lot to take in, but it is only a very brief outline of what you need to do for different platforms. The reality is that it takes a lot of work and time to craft engaging content that leads to conversions, especially on such a wide birth of social channels.  

 

Tracking and Optimisation

This isn’t exclusive to social media marketing, but it is an important point nonetheless. When running any campaign, you need to ensure you are constantly monitoring its effectiveness. There are a variety of metrics to consider like reach, click-through rates and bounce rates.

If an aspect of your campaign is underperforming, then it’s time to review what is and isn’t working and optimise. You may only need to make a few tweaks, but the results could be seismic. Constant analysis and action are needed if you want to consistently hit your engagement and conversion targets.

 

Scout the Opposition

If you’re struggling to come up with ideas, then there is no shame in looking at your competitor’s strategy. In fact, this can be immensely beneficial and is a widely used practice across digital marketing.

A good way to do this is to identify two or three brands you consider to be your top competition and examine the type of content they’re putting out. You need to look for reoccurring themes in the language used and the way the messaging is delivered. For example, if all your copy is presented in block paragraphs, but the competition is using bullet points or listicles to break up the information, this could be an indicator that you need to switch up your style.

Similarly, you’ll be able to see specific keywords or phrases they are using which could spark inspiration for your own messaging. It’s not about copying, or even emulating their strategy, but if your biggest competitors are all using the same language in the same way, then that is something you need to consider.

 

Social Media Management Tools

One thing that will make your job infinitely easier is a social media management application, such as TweetDeck and Hootsuite. Instead of manually creating each post when you need it, these types of software will allow you to schedule whole campaigns well in advance.

They also let you manage every page or brand you’re overseeing without having to log in or out to switch. Using these won’t make or break your strategy, the onus is still on you to create engaging content after all, but they will prove greatly efficient.  

These tools go back to our earlier point of analysing and optimising your content. Some applications will allow you to precisely track your engagement and conversion rates, as well as a slew of other metrics. These are invaluable in identifying campaigns that are running well and those that are underperforming.

 

Know your Audience

This might seem a little basic, but you would be surprised how many brands use generic messaging. While targeting a broad audience with your ad copy and content can produce results, creating specialised sets for certain crowds and angles is absolutely essential. 

Before the start of any campaign, whether it’s paid ads or trying to drive traffic organically, you need to identify potential audiences to target. A good way to do this is to imagine a customer that would be drawn to your product and ask yourself a few questions; where are they from, how old are they, etc. This is a creative exercise that can help visualise the type of person your messaging needs to appeal to.

 

Call the experts!

Just because you don’t have the resources for a dedicated department, that doesn’t mean you can’t enlist professional help when looking for social media marketing for small businesses. At Social Nucleus, we offer a variety of services that can bring out the best of your brand on any social platform. We will craft an effective launch strategy for your ad campaigns based on analytics and information provided by you. On top of that, we’ll work within your budget and regularly update you with key information for your campaigns, where you can improve and recommendations for scaling. Get in touch with us today and take your digital presence to the next level.

If you want to secure your brand’s healthy growth and profitability in 2022 and beyond, the LTV : CAC ratio is an essential metric to track. It compares your customer Lifetime Value (LTV) and Customer Acquisition Cost (CAC), showing you how much your customers are worth versus how much you’re spending to gain more. 

Hence it allows you to plan your spending and strategies across your sales, marketing and customer service teams, to ensure the long-term health and success of your business.

In other words, the LTV : CAC ratio is a KPI you need to be paying attention to in 2022.

In this article, we’ll be going through what this metric means, how it’s calculated and why it’s important to monitor this ratio as your business grows.

 

 

What is CAC?

CAC, or Customer Acquisition Cost, is the total cost needed to attain a new customer, over a specific time period.

It includes your marketing spend (e.g. ad spend and creative costs), the overhead used when drawing in new leads and converting these into paying customers, plus salaries and commissions. 

Once you’ve calculated the amount spent on bringing in new customers, versus the number of customers you’ve actually attained, the CAC is a valuable way to measure your business’s profitability. 

You’ll be able to find out the efficiency of your efforts and spending across your sales and marketing processes, and how you can improve on this and reduce your CAC.

 

How to calculate your CAC

First decide on the time period you wish to analyse (the month, quarter, or year). Within this scope, add your total marketing, and divide this by the number of new customers you’ve acquired.

This will give you the estimated cost of attaining a new customer.

For example, if your business spends £100k on marketing, and acquires 500 new customers, your CAC will be £200. As 100/500 = 200.

In other words, the estimated amount you’ll need to attain each new customer would be £320.

 

What is your customer LTV?

 

 

Your LTV, or Lifetime Value, is the expected revenue that a customer brings during their relationship with your business. 

It allows you to predict how much revenue you may expect to generate from an average customer, once they make their first purchase from you.

By paying attention to this metric, you’ll be able to assess how you can improve on this, and nurture your customer relations to ensure customers return to purchase again and again.

 

How to calculate your LTV

By following this step-by-step process, you’ll be able to calculate your average customer Lifetime Value.

1 – Calculate your average purchase value (divide total revenue within a specific time period by the total number of purchases).

2 – Calculate your average purchase frequency (divide the total number of purchases by the number of unique customers that have converted).

3 – Multiply these two values together to find your average customer value.

4 – Then calculate your average customer lifespan by averaging out the number of years customers continue to purchase from your business.

5 – Finally, multiply your average customer value by your average customer lifespan to get your customer lifetime value (LTV).

The next step is combining these two values to find and analyse your LTV : CAC ratio.

 

The LTV : CAC ratio

 

 

Divide down your calculated LTV and CAC to a simple ratio (x : x). For example, if your LTV is £900 and your CAC is £300, your ratio divides down to its simplest form of 3:1.

If your LTV : CAC ratio gravitates closely around 3:1, this indicates a business with a healthy growth potential. Aim for this approximate benchmark as a sign of business success.

 

But what if each value is higher/lower than this benchmark?

If your ratio gravitates around the 1:1 mark, it may seem as if you’re breaking even. However, it’s likely that you’ll be losing money per acquisition as additional costs may not be included in your calculations (such as shipping costs and taxes).

If your CAC is higher than LTV (e.g. giving a ratio of 1:1.5), you’re spending more to attain new customers than you’ll ever make back from them. This means you’ll be significantly dipping into your potential profits.

If your LTV gives you a higher ratio value than 3:1 (e.g. 5:1), this indicates a growth opportunity. It could mean you could be spending more on your marketing and sales efforts to attract new leads and customers.

 

Why is this ratio important to use right now?

As can be seen above, once you’ve calculated your LTV : CAC ratio, you’re able to evaluate how to improve your internal processes, and consequently improve your business’s growth potential and profitability on a long term basis.

By incorporating this metric into your analysis and reporting, you’ll be able to secure your business’s healthy long-term growth and success.

The LTV : CAC ratio is also a reliable way to indicate your business’s long-term health to current and potential investors.

 

How you can improve your LTV : CAC ratio

Here are a few examples of ways you can achieve a LTV : CAC ratio that gravitates more closely around the 3:1 benchmark:

 

1 – Avoid relying solely on paid ads – as they drive acquisition costs up considerably, so make an unsustainable sole focus when looking at long-term growth.

 

2 – Invest in your CRO (conversion rate optimisation, or the process of converting visitors to leads, and leads to converting customers). For example, look into optimising your site and checkout process for online conversions, and spruce up your copy and content to engage customers and push them further along the customer journey.

 

3 – Give value to your current customers. By listening to their suggestions in customer feedback and reviews, and nurturing your customer relations with rewards and loyalty programmes, you’ll encourage further conversions.

 

4 – Implement a customer referral programme. Referred customers will already be familiar with your brand and product line (lowering your CAC over time), and referring customers are more likely to make repeat purchases with referral rewards (increasing overall LTV).

 

5 – Utilise CRM platforms to optimise your sales funnel. CRM tools will facilitate the process of nurturing leads into paying customers, giving your sales team the time to grow their databases, and consequently increase the number of generated sales.

 

6 – Focus on retention with your email/SMS marketing. Through these channels, you’re reaching more engaged customers with a potential for many repeat purchases (both via campaigns and post-purchase automations).

 

 

By ensuring your marketing, sales and customer service teams are focussing on improving your LTV : CAC ratio, your business can collectively move towards sustainable long-term growth. 

With more loyal customers, creative marketing strategies and productive sales processes, aligned towards the common goal of increasing your LTV with the lowest spend possible, your business can only go from strength to strength.

So ensure the calculation of your LTV : CAC ratio is high on your priority list, so you can best understand how to optimise your strategies and get your business to the next level 🚀

No matter the efficacy of your paid social ads or email marketing campaigns, your website is the most important tool to turn interests into conversions for your business. 

That’s why it’s incredibly important to ensure that your website’s conversion rate is fully optimised. Whether your customer knows your brand from your organic social media presence, or has come across your website and brand for the first time, your website needs to provide a smooth and simple process from your customer visiting the landing page to completing their purchase.

Here are 3 ways you can boost your website conversions – all proven to optimise conversion rate.

1. Add a pop up to your landing page

Having a pop up form on your landing page is a great way to push visitors to make a purchase, by offering exclusive sign up discounts they can use on their first order. 

Along with increasing your conversion rate, this is a great way to capture people’s emails, mobile numbers or any other personal information you need. You can then use these for email and/or SMS marketing campaigns to increase AOV and engagement, and keep customers returning to purchase from you.

 

 

2. Show Customer Reviews and Social Proof

Showing customers reviews and social proof can act as a key element in increasing your conversion rate. 

Customers are now becoming more and more reliant on hearing what other people think of brands and products before purchasing. This is even more important if you are trying to acquire new customers who may have never heard of you before – you can quickly boost brand trust with a high quality review that directly addresses common pain points.

 

3. Keep Pages Easy To Navigate 

When a potential customer first lands on your website they should not feel overwhelmed by a busy website with a lot going on at once.

The landing page needs to be clear, simple and easy to navigate through. To minimise this you should always question what is going on your site and if it is needed and/or valuable to visitors.

This is just as important with product pages, especially if this is where you will be sending traffic from paid advertising.

When a customer lands on a product page they should easily and quickly be able to determine your product, its benefits, key information, price and even social proof/customer reviews with as little scrolling as possible. 

This can also be known as digital real estate on your page – optimising the given space correctly can have a drastic impact on conversion rates. Always think of minimising the amount of scrolling a potential customer has to do to find out everything about your product.

 

So, there you have it. A quick guide on 3 ways you can effectively improve your website’s conversion rate to maximise profits. 

If you need any further advice on how to improve your conversion rate or how to build an effective website, get in touch with our experts today 🚀