Benchmarking | Marketing

The marketing section of the Benchmark report provides a view of the business's use of marketing channels in the previous year.

Cost of Acquisition, Marketing Cost of Sales and Spend Growth by Marketing Channel are presented against benchmarks to evaluate the efficacy of paid marketing.

KPI definitions and interpretation

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Customer Acquisition Cost (CAC)

This KPI details the average cost of acquiring a customer. This figure is calculated by dividing the total number of new customers created in Brightpearl during the period by marketing spend.

  • Lower CAC can highlight there is room to increase spending and competitiveness on paid channels
  • Higher CAC may indicate the opposite

This metric should be assessed in conjunction with AOV and LTV. Where CAC is lower than AOV/LTV it signifies potential to increase spend on acquisition.

Marketing Cost of Sales

This KPI details the percentage of revenue that is spent on marketing. This represents the ability of the business to scale marketing spend.

If you are already spending a large proportion of revenue on marketing, it's unlikely there's potential to increase spend and you should look for other ways to accelerate growth. It is also advisable to optimize marketing activity to increase the return on ad spend.

YOY Marketing Spend Change

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This chart details the percentage change in spend across each marketing channel.

  • Where the KPI is higher than the benchmark, the business has increased spend on this marketing channel more than its peers.
  • Where it's lower, it has increased spend on this channel less than its peers.

Using this KPI you can determine whether the business is following its peers in marketing strategy.

Monthly CAC

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This graph details the cost of acquiring a customer on average per month. This chart shows how CAC changes over time and whether the same is occurring across the industry. Increasing CAC can indicate more competition and/or less demand.

  • Lower CAC than peers can highlight that there is room to increase spending and competitiveness on paid channels.
  • Higher CAC may represent the opposite.

Monthly CAC by Marketing Channel

mceclip3.pngThis graph details the cost of acquiring a customer on average per month and by channel.

Use it to assess how CAC is changing over time on a given channel and whether the same is occurring across the industry. 

YOY CAC Change by Month

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This graph details the percentage change in CAC vs. previous year on a monthly basis.

A lower change in CAC than your peers can indicate that the business is weathering a difficult period better than other businesses or that its acquisition activity is more effective.

Monthly Marketing COS

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This graph details the percentage of revenue that is spent on marketing per month. This data represents the ability of the business to scale marketing spend over the year, allowing you to answer questions such as whether there was a part of the year that impacted the yearly comparison.

Cost per Click by Marketing Channel

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This chart details the cost of generating a click across each marketing channel.

Higher CPC can indicate a competitive market, or can mean poor alignment between the business and keywords. It highlights a need to optimize channels and review keyword targeting.

Click Through Rate (CTR)

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This chart details the percent of impressions generated on a channel that results in a click.

CTR can indicate how effective and relevant ad copy is to your target audience. This feeds into CPC, with a lower CTR resulting in higher CPC. This metric can highlight a need to optimize channels, to review ad copy and to review keyword targeting.

Monthly Search Impressions Share by Channel

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This graph details the percentage of customer searches that result in an ad impression. Low impression share could be caused by:

  • Low budget/not bidding high enough
  • ROAS/CAC targets which are too conservative

Monthly YOY Marketing Spend Change

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This graph details the percentage change in spend month-by-month.

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