6 Business Metrics for Monetization
Posted: Sat Feb 01, 2025 5:50 am
The CPO indicator (cost per order, the price of attracting one sale) characterizes the average amount of expenses incurred to attract one buyer. By determining the CPO for all promotion channels, it is possible to optimize the advertising budget in future periods.
CPO = amount of money spent on advertising/number of sales.
CAC
CAC (customer acquisition cost, price honduras email list per customer) is the funds allocated by a company to attract a new customer within a certain period of time.
CAC = total amount spent on traffic channels and sales for a certain period of time / total number of attracted customers.
The value of this indicator can be difficult to determine, since it is impossible to say with certainty how much it cost the company to attract new clients.
ROI, ROMI, ROAS
ROI (return on investment), ROMI (return on marketing investment) and ROAS (return on advertising spend) allow you to find out how much you can get back your investment. The difference is that ROI characterizes the overall profitability taking into account all costs.
ROI = ((income received from the project - expenses on this project) / expenses on this project) * 100%.
If the ROI indicator is expressed as a positive number, we can conclude that the project is profitable. If the ROI value is negative, the enterprise's activity is associated with losses. If the ROI is zero, then the business is at the break-even point.
Key Business Metrics
Source: shutterstock.com
Usually, when calculating the return on investment, a simplified formula is used that includes only marketing costs, without taking into account rent or delivery costs. The ROMI indicator includes only funds allocated for marketing purposes. At the same time, this includes not only the cost of advertising, but also the marketer's salary.
ROMI = (advertising revenue - total marketing costs)/total marketing costs * 100%.
When calculating ROAS, you should limit yourself to advertising costs and ignore other costs, such as the fee for the specialist who sets up the ads.
ROAS = earnings from advertising / expenses on advertising.
This indicator does not take into account the total profitability and therefore does not allow for accurate conclusions regarding the effectiveness of advertising campaigns.
ARPU
ARPU (average revenge per user) is the average revenue per customer over a given period. Calculating ARPU can help you study how revenue from each customer has changed over time and how customers react to price fluctuations.
ARPU (for a given time period) = total sales revenue for a given time period / number of people who used the product during that time period.
It is advisable to take into account revenue from all audience acquisition sources for individual time periods. In this case, it becomes easier for the company to identify problem areas and understand which advertising is not effective, as well as what causes periodic sales declines.
AOV
AOV (Average Order Value) is the average order value or average check. It is equal to the average income from one transaction in a specific period. This information allows you to more accurately predict the total income. Additional sales can be made to increase AOV.
AOV = total sales revenue / number of sales.
CPO = amount of money spent on advertising/number of sales.
CAC
CAC (customer acquisition cost, price honduras email list per customer) is the funds allocated by a company to attract a new customer within a certain period of time.
CAC = total amount spent on traffic channels and sales for a certain period of time / total number of attracted customers.
The value of this indicator can be difficult to determine, since it is impossible to say with certainty how much it cost the company to attract new clients.
ROI, ROMI, ROAS
ROI (return on investment), ROMI (return on marketing investment) and ROAS (return on advertising spend) allow you to find out how much you can get back your investment. The difference is that ROI characterizes the overall profitability taking into account all costs.
ROI = ((income received from the project - expenses on this project) / expenses on this project) * 100%.
If the ROI indicator is expressed as a positive number, we can conclude that the project is profitable. If the ROI value is negative, the enterprise's activity is associated with losses. If the ROI is zero, then the business is at the break-even point.
Key Business Metrics
Source: shutterstock.com
Usually, when calculating the return on investment, a simplified formula is used that includes only marketing costs, without taking into account rent or delivery costs. The ROMI indicator includes only funds allocated for marketing purposes. At the same time, this includes not only the cost of advertising, but also the marketer's salary.
ROMI = (advertising revenue - total marketing costs)/total marketing costs * 100%.
When calculating ROAS, you should limit yourself to advertising costs and ignore other costs, such as the fee for the specialist who sets up the ads.
ROAS = earnings from advertising / expenses on advertising.
This indicator does not take into account the total profitability and therefore does not allow for accurate conclusions regarding the effectiveness of advertising campaigns.
ARPU
ARPU (average revenge per user) is the average revenue per customer over a given period. Calculating ARPU can help you study how revenue from each customer has changed over time and how customers react to price fluctuations.
ARPU (for a given time period) = total sales revenue for a given time period / number of people who used the product during that time period.
It is advisable to take into account revenue from all audience acquisition sources for individual time periods. In this case, it becomes easier for the company to identify problem areas and understand which advertising is not effective, as well as what causes periodic sales declines.
AOV
AOV (Average Order Value) is the average order value or average check. It is equal to the average income from one transaction in a specific period. This information allows you to more accurately predict the total income. Additional sales can be made to increase AOV.
AOV = total sales revenue / number of sales.