Nate Tilley argues marketers waste time on vanity metrics like cost per lead. Track cost per acquisition and lifetime value instead. A used-car dealership spends $300 per sale and makes $3,000 per transaction, a 10x return.
There's two things I track. Cost per acquisition and lifetime value. A lot of my clients, people always ask me, like, cost per lead. Like clicks. What do you track? I don't track anything. I don't even care. There's two things I track. Cost per acquisition, meaning cost per sale, and lifetime value. Okay. If you're able to pay less than whatever the lifetime value is per cost per acquisition, then you have a multiplier on your hands. Let me give you a practical example. Garden City, Chrysler G, Dodge Ram, the dealership that I mentioned with David, Those guys are able to sell cars for, on average, $180 cost per car sold from hats. Okay, so $300 cost per car sold. Does anybody know roughly how much a used car dealership makes per transaction? Six grand. That's a good guess. A lot of times they are like six grand, but the average is about $3200. Let's call it 3000. So if they're able to spend 300, sell a car, make 3000 on the other end. That's a 10x ROI.
