Which metric would most likely be tracked by an e-commerce retailer to evaluate online marketing success?

Customer acquisition cost (CAC) is a crucial metric for e-commerce retailers evaluating the effectiveness of their online marketing strategies. This metric represents the total cost of acquiring a new customer, which includes advertising expenses, promotional costs, and any other expenses directly tied to attracting new clients.

Tracking CAC enables retailers to assess how efficiently their marketing budget is translating into new customers. A lower CAC indicates a more successful marketing campaign, as it suggests that the retailer is spending less to bring in each new buyer. Conversely, a higher CAC may prompt marketers to reevaluate their strategies and focus on optimizing their advertising efforts or reconsidering their target audience.

By understanding CAC in relation to the lifetime value of a customer, retailers can make informed decisions on budget allocations, marketing channels, and overall strategy to enhance profitability and growth. This metric is particularly vital in e-commerce, where competition is fierce and margins can be thin, making the management of acquisition costs a decisive factor in overall success.