How To Calculate Cost of Acquisition Ratio in Drip | Arithmix

Calculating the cost of acquisition ratio is an important step in understanding the effectiveness of your marketing campaigns. This ratio helps you determine how much it costs to acquire a new customer compared to the revenue generated from that customer. By calculating this ratio, you can make informed decisions about your marketing budget and adjust your strategies accordingly.

What Is Cost of Acquisition Ratio?

The cost of acquisition ratio is a metric that measures the cost of acquiring a new customer compared to the revenue generated from that customer. This ratio is calculated by dividing the total cost of acquiring a customer by the total revenue generated from that customer. The result is a percentage that indicates how much of your revenue is being spent on acquiring new customers.

For example, if it costs $100 to acquire a new customer and that customer generates $500 in revenue, the cost of acquisition ratio would be 20%. This means that 20% of the revenue generated from that customer is being spent on acquiring new customers.

When Is It Valuable To Calculate Cost of Acquisition Ratio?

Calculating the cost of acquisition ratio is valuable for businesses of all sizes and industries. This ratio helps you understand the effectiveness of your marketing campaigns and make informed decisions about your marketing budget. By tracking this ratio over time, you can identify trends and adjust your strategies accordingly.

For example, if your cost of acquisition ratio is increasing over time, this may indicate that your marketing campaigns are becoming less effective and that you need to adjust your strategies. On the other hand, if your cost of acquisition ratio is decreasing over time, this may indicate that your marketing campaigns are becoming more effective and that you can allocate more resources to them.

Overall, calculating the cost of acquisition ratio is an important step in understanding the effectiveness of your marketing campaigns and making informed decisions about your marketing budget. By tracking this ratio over time, you can identify trends and adjust your strategies accordingly to ensure the long-term success of your business.

How Do You Calculate Cost of Acquisition Ratio in Drip

Drip itself isn’t naturally geared towards letting you calculate complex metrics like Cost of Acquisition Ratio. As an alternative, teams typically use products like Arithmix to import data from Drip and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Drip, combine it with data from other systems, and create calculations like Cost of Acquisition Ratio.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Cost of Acquisition Ratio in Arithmix

Calculating metrics like Cost of Acquisition Ratio is simple in Arithmix. Once you've created your free account, you’ll be able to import your Drip data, and use it to create natural language formulas for metrics like Cost of Acquisition Ratio.

Arithmix is designed to give you the power to build any calculations you want on top of your Drip data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.