Post by account_disabled on Nov 22, 2023 4:43:26 GMT -5
Cost per Acquisition (CPA) is a metric that provides insight into the spending required to acquire customers . It represents an excellent way to measure the financial effectiveness of customer acquisition strategies.
It takes into account all the necessary marketing and sales expenses to get a client.
The Acquisition Cost can be calculated with the following formula:
formulas-revops-client-jul23-CPA
Calculating CPA is an effective way to evaluate the effectiveness of acquisition tactics and whether the cost is justified by the revenue generated .
2. Annual Recurring Revenue (ARR)
Annual Recurring Revenue, also known as ARR, represents the state of the company's financial health and its growth potential over a 12-month period, allowing future revenues to be anticipated.
It allows you to detect trends and make decisions about how to optimally use resources , develop new products and attract potential customers.
An increase in ARR indicates that customer retention, upselling, and cross-selling strategies are generating successful results.
Formula to calculate Annual Recurring Income:
formulas-revops-client-jul23-ARR
3. Total contract value
The Total Contract Value, also known as TCV (Total Contract Value), represents the overall value of an agreement entered into with a client throughout the entire duration of the contract .
This figure encompasses the sum of all recurring Asia Mobile Number List revenues and any one-time or non-recurring costs associated with the contract.
By considering TCV, sales reps can gain a deeper understanding of the value of each customer interaction.
Constant analysis of the Total Contract Value can identify opportunities for upselling or cross-selling , as well as to optimally negotiate prices and conditions, maximizing the return on your investments.
To calculate the Total Contract Value, the following formula is used: