What is the business value behind the $20 customer acquisition budget?
The ideal working state for a data analyst is to gain valuable business insights from data in a timely manner, and then use this to drive business growth.
With the advent of various analytical tools and the lowering of data analytic threshold, there are increasingly more metrics in companies. However, most metrics are put on the shelf once created. Despite the democratization in data analytics, metrics have fallen far short of everyone’s expectations, and so did the data behind them.
For instance, a company has a relatively mature D&A team. They have accumulated a number of metrics related to advertising conversions based on their daily business query needs:
However, the background statistics have shown that the utilization rate of these metrics is consistently low. How can we effectively leverage the value of these metrics?
With Kyligence Zen, we can correlate metrics with goals and think about the meaning behind metrics from a business perspective. For instance, when making plans at the beginning of the year, the company decided to increase its advertising budget by 20% ($100,000) compared to last year, with an aim to boost overall sales. Accordingly, the budget per conversion will also be increased by 15% ($20).
After defining the metrics, we can correlate metrics with goals in Kyligence Zen. Go to the Goal page and click on the New Goal button in the upper right corner. We will create an Operating Cost goal, and add “Less than 20% increase in advertising budget compared to last year” as its subgoal, and “Less than 15% increase in budget per conversion compared to last year” as a subgoal of the advertising budget goal, as shown below.
Next, we will link the goal with the metric, and add the target value. By doing so, we will be able to track the achievement of the goal in real-time, allowing metrics to drive the achievement of the goal.
Point our mouse to the goal of “<20% increase in advertising budget compared to last year”. Click +Add Data that appears below the Add Value column. Correlate it to the Total Spent metric in the Metric column. Upon completion of selection, Kyligence Zen will automatically populate the Current pane with the metric value. Then enter the target value: 100000, and click Done. Given the fact that we have a daily ad budget in our data, this goal will also be followed by a daily spending change curve.
You can try and repeat the above-mentioned steps to correlate the budget per conversion goal with related metrics.
Kyligence Zen will automatically calculates the implementation rate of the goal based on the current value and the target value. For instance, compared to our budget of $ 20, there is not much room left for the average conversion cost of $19.24. As a consequence, we may need to control the customer acquisition cost. But from the advertising budget $100,000 (perspective), only $58,700 has been invested so far. As a consequence, we shall increase the advertising investment on the basis of strictly controlling the customer acquisition cost, thus further improving the use efficiency of advertising funds.
By aligning the metrics with the goals, our metrics data is no longer a cold number lying on the company’s digital asset sheet. $19.24 represents the cost we need to pay for each new customer we attract. This number was set after discussions among all parties by taking into consideration of the company’s operating costs. With close metrics and goal monitoring, the marketing team is expected to abide by the bottom line on costs as they continue to help the company acquire new customers.
Kyligence Zen is now open for trial, welcome to visit Kyligence Zen homepage and reproduce the case we discussed here.
