Hello Savages! I'm trying to understand how much I can spend on an ABM strategy by using: Ticket LTV Profit margin Sales tools Team Amount of actions (event, ads, gifts, restaurants...). Conversion rate (If 1 of 10 leads turns into a customer, this 1 needs to pay back all the investment of the 10 accounts. Only if these 9 accounts don't fit? What if the accounts have fit but didn't engage in any actions? When should I stop trying because the CAC is getting bigger than my profit margin judging my LTV on the contract?) But I'm not sure if this information is enough or if I've got a blind spot and am not seeing something important. And, how exactly do I need to use this information to do the math?

salesherald

Sales Process Consultant

Executive

Fire Starter

Good Citizen

How should I budget my ABM strategy?

Hello Savages!

I'm trying to understand how much I can spend on an ABM strategy by using:

Ticket
LTV
Profit margin
Sales tools
Team
Amount of actions (event, ads, gifts, restaurants...).
Conversion rate (If 1 of 10 leads turns into a customer, this 1 needs to pay back all the investment of the 10 accounts. Only if these 9 accounts don't fit? What if the accounts have fit but didn't engage in any actions? When should I stop trying because the CAC is getting bigger than my profit margin judging my LTV on the contract?)

But I'm not sure if this information is enough or if I've got a blind spot and am not seeing something important.

And, how exactly do I need to use this information to do the math?

👑 Sales Strategy

📚 Resource

💴 Money Management

9 comments

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TennisandSales

Politicker

Head Of Sales

I would look at what the CAC is now. and does leadership have a threshold they need to stay under? or does it not matter?
Is this all coming out of sales budget?

i would think the biggest spend items would be : ads and events. (what events are you doing?)

punishedlad

Tycoon

Business Development Team Lead

I do not know what ABM or CAC stand for :)

Maximas

Tycoon

Senior Sales Executive

Me neither:)

Sunbunny31

Politicker

Sr Sales Executive 🐰

Account Based Marketing and Customer Acquisition Cost.

TennisandSales

Politicker

Head Of Sales

ABM: Account based marketing
CAC: Customer Acquisition Cost. (a really important metric that Saas companies care about)

Maximas

Tycoon

Senior Sales Executive

Thank you.

Maximas

Tycoon

Senior Sales Executive

I see.

ARW

VP of Sales

Ok let’s see if we can reverse engineer this for you. At the end of the day CAC comes down to the level of investment your management are willing to make to acquire a new customer and the time they are willing to take to get their investment back. So if you have a $1000 product with a 50% profit margin you make $500 for every sale. But you know that once you win a customer they generally stay with you for 3 years and they spend $3000 (LTV) in total with a profit margin of $1500 (this is actually their LTV to you). Then it’s just a judgement call. Do you want to spend $1000 to acquire a $1500 LTV client? Probably not. Do you want to spend $500 to acquire a $1500 LTV client, yeah maybe. This would be equivalent to a 12 month payback (or instant if you take cash upfront). Hope that helps, feel free to hit me up for clarifications if not.

kelvin26

Fire Starter

-3

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salesherald

How should I budget my ABM strategy?

9 comments

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