Questions

The best way I can track my Adwords leads/customers is by using UTM paramenters on my links, and based on the data I collected this is what it currently shows me. I segmented my data to show all Adwords customers and then created a cohort analysi based on the customer's signup date. I then took the monthly amounts I spent on Adwords and compared it to all of the profit I received from each of these customer signup date cohorts and on average it is showing me a ROI of -27%, so I ended up losing money from the customers I acquire through Adwords. Then I go and calculate my LTV based on the same data I collected (only Adwords customers), and based on a total average I come up with a $114 LTV profit. There is no way I can spend $114 to acquire a new customer when my ROI customer signup cohorts are showing that I'm losing money on Adwords. I also did a LTV calculation on my best customers from this same Adwords customer data and I got $487 LTV and for my worst customers I got $30 LTV. Now the only LTV that looks closer to normal is my worst customer LTV of $30, but this is frustrating to see on the total average an LTV of $114 becasue if I would have spend that much to acquire a new customer I would definitely be losing a lot of money. Luckily, all my best customers come from other links that I don't control that do not have UTM paramenters; I'm guessing through organic search; so I don't know if my Adwords are helping bring these type of customers in or if I should just stop with Adwords advertising?

I think with a $450 swing between your highest value and lowest value customers, it's not instructive to bunch everyone together and average things out. I'd break up the cohorts a bit and run an analysis like that. Whether it be by demographic, order type, order size, net profit...you need to find some more granular veins of data in there in order to make better marketing decisions.


Answered 8 years ago

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