Little is said about customer acquisition cost and how much a company should pay. However, if you are just starting out

[Ehsanuls55]

CLTV (customer lifetime value) = $1,000
10,000 visitors per month
1% Email Conversion Rate = 100 Email Leads per Month
15% qualified leads = 15 qualified leads per month
20% closing rate = 3 deals closed per month (10,000 x 1% x 15% x 20%)
Value of an email lead = $1,000 x 1% x 15% x 20% = $.30
Target Email CPA/CAC (Cost Per Acquisition/Customer Acquisition Cost) = $.05 to $.10


Can you optimize conversion rate with our email sequence?:

CLTV = $1,000
10,000 visitors per month
3% Email Conversion Rate = 300 Email Leads per Month
20% qualified leads = 60 qualified leads per month
20% closing rate = 12 deals closed per month (10,000 x 3% x 20% x 20%)
Value of an email lead = $1,000 x 3% x 20% x 20% = $1.20
Target Email CPA/CAC (Cost Per Acquisition/Customer Acquisition Cost) = $.20 to $.40


You can see that by just making a few quick changes to the funnel, the communication directors email lists value per email has increased four times and as a result, you can now pay for four times as many emails and that's much more manageable.

But, it’s not enough for it to be “manageable”; we want “more.” In general, pricing is something that needs to be reviewed because it’s constantly changing. It makes sense to think about increasing your prices every quarter due to increased demand, overhead, and other variables.

Let's use the conversion rate optimization example from earlier, but this time, let's double the prices:

CLTV = $2,000
10,000 visitors per month
3% Email Conversion Rate = 300 Email Leads per Month
20% qualified leads = 60 qualified leads per month
20% closing rate = 12 deals closed per month (10,000 x 3% x 20% x 20%)
Value of a lead per email = $2,000 x 3% x 20% x 20% = $2.40
Target Email CPA/CAC (Cost Per Acquisition/Customer Acquisition Cost) = $.40 to $.80


We have more room to maneuver now that we have adjusted CLTV. If we can make other minor adjustments to increase our conversion rates and perhaps increase the price a bit more, we can be more aggressive with our advertising efforts.

To make you even more effective, here are 11 ways to optimize your sales funnel .