Key Marketing Calculations and Formulas

Marketing calculations are essential for measuring performance, optimizing campaigns, and making data-driven decisions. Here are some key marketing calculations with formulas and explanations:

1. Return on Investment (ROI)

Measures the profitability of a marketing campaign.

Example:
If a campaign costs $1,000 and generates $3,000 in revenue:

ROI=……………..

2. Customer Acquisition Cost (CAC)

The cost to acquire a new customer.

​Example:
If you spend $5,000 on ads and acquire 100 new customers:CAC=CAC=

3. Conversion Rate (CR)

The percentage of users who complete a desired action (e.g., purchase, sign-up).

Example:
If 500 visitors result in 50 sales:

4. Customer Lifetime Value (CLV / LTV)

Predicts the total revenue a business can expect from a single customer.

Example:
If a customer spends $50/month for 2 years (24 months):

CLV=……………..

5. Marketing % of CAC

Shows how much of CAC is attributed to marketing.

Example:
If $4,000 of a $5,000 CAC is from marketing:

Marketing % of CAC=……………..

6. Break-Even Point (BEP)

The point where revenue equals costs.

Example:
If fixed costs = $10,000, selling price = $50, and variable cost = $30:

BEP=……………..

7. Click-Through Rate (CTR)

Measures ad engagement.

Example:
An ad with 10,000 impressions and 500 clicks:

8. Cost Per Click (CPC)

The cost for each click in PPC campaigns.

Example:
Spending $1,000 for 500 clicks:

CPC=……………..

9. Cost Per Lead (CPL)

Cost to generate a lead.

Example:
If $2,000 generates 200 leads:

CPL=……………..

10. Net Promoter Score (NPS)

Measures customer loyalty.

Example:
If 70% are promoters and 20% are detractors:

NPS=70−20=50

*(Scores range from -100 to 100.)*

Bonus: Marketing Efficiency Ratio (MER)

Shows overall marketing efficiency.

Example:
If $10,000 in spend generates $50,000 in revenue:

MER=……………..

When to Use These Metrics:

• ROI → Overall profitability
• CAC → Cost to acquire customers
• CLV → Long-term customer value
• CTR & CPC → Ad performance
• NPS → Customer satisfaction