Connecting the Dots & increasing CAC Ratio with Marketing Automation
“One of the metrics we track most maniacally at HubSpot is the LTV:CAC ratio (life-time-value:customer-acquisition-cost). This captures a bunch of key metrics. As a rule of thumb, I think that the LTV:CAC needs to be 3 or higher to build a successful SaaS business in the long-term.”
— Dharmesh Shah, Co-founder and CTO, HubSpot1
Bessemer Venture Partners offers this core advice:
- If your CAC Ratio < .33 = cut spending or increase efficiency
- If your CAC Ratio > 1 = invest more and step on the gas2
Sales and marketing automation is a great way to optimize dollars spent on CAC and drive net new revenue to your business…but you need to do it well.
Traditional Sales & Marketing Won’t Work – Keep your foot on the gas pedal by following these 10 best practices for marketing automation
- Marry your Marketing Automation and CRM Platforms – If marketing automation alone is powerful, marketing automation tied to your CRM is game changer.
- Integrate With an Information-Rich SEO Friendly Website – The third ingredient needed for a successful marketing automation play is a website built to give you a pulse on the market. With the right content, the right calls to action and the right tracking codes you’ll start to think of your website as a silent but powerful member of your business development team.
- Define a Unified Playbook – Work hard to define terms and workflows in your systems. Make terms like Marketing Qualified Lead easy to understand
- Train Well – for a marketing automation program to work, you must have the right people on the bus. Those people must all be operating on the same definitions, principles, and cadence. Work hard at this training.
- Establish Lead Scoring Metrics – Not all interactions are created equally. Establish lead scoring metrics based upon your profile of the perfect customer, to enable more effective calling efforts.
- Feed and Nurture the Data Monster – Email marketing can be a numbers game. Ensure your mailing lists are well-stocked with clean, targeted data.
- Craft Compelling Content – What good is an engine without fuel? Content is the fuel that will keep your marketing automation engine humming.
- Get targeted – Gone are the days of spray and pray marketing. Use the focused insight from the system coupled with market feedback from your reps to get strategic with your lists, messaging and distribution.
- Enforce Discipline – Capture and record all call activity in the CRM so that it may help feed the next campaign.
- Connect the Dots – Data analysis. What we’ve learned, how to apply it. Test & refine one source to track all, social, seo, email, etc.