Customer Acquisition Cost and Marketing

1. Introduction
One aspect of the overall marketing lan that is frequently overlooked or minimized is the evaluation. Without that piece it is difficult to determine how successful the campaign has been. Knowing the R.O.I. on a campaign helps businesses make more fiscally informed decisions on where to put their marketing efforts.
Why This Matters: When companies spend money on marketing campaigns, it may be viewed as nonessential funds—or even sometimes frivolous spending. Setting up performance metrics allows the marketing team to monitor and evaluate the outcomes of the marketing plan. It’s also important to be able to measure what’s really happening with the marketing plan to know when/if to make modifications as well as determine future spending in each of the measured areas. With budgets becoming increasingly tight, it is imperative to use metrics that demonstrate the benefits, or return on the investments of marketing dollars.
Your Task: In addition to your assigned reading on marketing performance evaluation, review the following case. As you review all the materials, reflect on what the metrics may indicate to the overall success of the campaign, the company and for the marketing department. After reviewing the case, answer the questions that follow.
2. Practice Scenario
AxxisSolutions.com
Axxis Solutions is a Miami based technology and business consulting firm. The firm specializes in implementable solutions to streamline results. Enabling new work dynamics through digital transformation is critical to every industry. The company partners their strategic thinkers, technologists and creative consultants with businesses to reimagine themselves, achieve growth and deliver exceptional customer experiences. The consulting experts focus on delivering innovative approaches to organizations’ current and future business challenges through the use of implementable and affordable technology.
Axxis leadership wanted to review the marketing performance over a recent 6-month period to determine the impact and effectiveness of their marketing plan activities budget as well as establish spending forecasts for the next fiscal period.
Healthy MED Student™ provides a variety of programs and services to global medical students. These programs include health, well-being programs, integrative medicine initiatives, as well as personal programs that offer unique initiatives to empower medical students to pursue a thriving academic and wellness experience.
The marketing team’s recent activities were designed to send potential clients through a funnel system beginning with:
Brand Awareness—Sponsorship (university, athletic events, etc.)
Lead Generation—Digital campaigns (branding, email, web, social media, etc.)
Hosted Events—Happy hours and mixers.
Training—Servicesspecialized entry level Customer Relationship Management (CRM) and sales training. The training courses were designed as an entry level service to the local business community to assist in improving sales and marketing productivity and to introduce clients to customized Axxis services.
Managed Services—Axxis Solutions’ signature product.
The performance metric system included monitoring the performance in the following areas: Campaign ROI—digital, media, channels; Revenue by source (campaign ROI); Lead conversion to sales; Customer acquisition costs (CAC) compared to CLV; Customer Satisfaction score. The following sample dashboard below indicates a six-month period of activity, generated by the marketing team for an upcoming meeting with company leadership.
1.CFO/CEO wants bottom line–reduce costs. How would you justify the line items spent on Sponsorship and Events?
2. What performance metric, in your opinion, should be added to this Dashboard and why?
3. What Marketing activities would you focus on to increase the Lead Conversion to Sales, currently at 55 percent and why?
4. In the Customer Acquisition section of the Dashboard, the Sponsorship section was $13,852 and the Training was $14,222. How would you describe the costs for each when Sponsorship costs were 48 percent of the marketing budget?