In our recent State of Live industry report, we discovered a number of very compelling insights into festival and live event marketing operations.
But there was one statistic that really stood out to our team.
41% of event producers don’t know their customer acquisition cost (CAC).
We found ourselves scratching our heads, wondering how any kind of efficient, responsive marketing campaign could be executed without a cursory understanding of what their customer acquisition cost is.
“Companies with knowledge of their customer acquisition cost are winning the fight with the competition,” explains Milan Malivuk, Intellitix’s Director of Growth and Acquisition Marketing. “Part of knowing your customer acquisition cost is knowing where you’re spending and therefore you know which channels are the most cost effective. This allows you to get every little bit out of your budget whether it’s big or small. If you’re not doing this, your competitors are, and they’re going to eat your lunch.”
At its very simplest, you can work out your customer acquisition cost by dividing your total marketing budget by number of tickets sold.
Example: Say you spend $100,000 on marketing your 10,000-capacity event, your cost per customer is $10.
But in all honesty, that doesn’t give you a whole lot to work with.
We’re in an era when an effective marketing campaign is spread across many channels, and if it’s being run correctly it will be in a constant state of flux depending on the effectiveness.
Analytics today have empowered digital marketers with the ability to track every purchase from the earliest nibble on the bait. You can see where the customer entered the sales funnel (Facebook video, email, banner ad etc.) and you can track their every step through the retargeting process, gaining a previously unprecedented level of insight into what works and what doesn’t.
This is the standard nowadays. If you are not employing these tactics, be sure that your competitors are. This gives them a tremendous edge over you as it leads to increased efficiency and the freeing up of resources that can be spent elsewhere.
Feathr is one such company that gives its event clients a precise view of how their marketing budget is being spent. But they understand that event ticketing comes with its own set of challenges that are less prevalent than in traditional e-commerce.
“The advance of digital marketing and web analytics over the last decade has made everything measurable, but ticket attribution is still hairy because a fan may have engaged with a Facebook post, Google ad, and an email over the course of their decision-making process, before ultimately navigating to the site directly a week later to purchase a ticket,” explains Feathr’s co-founder Aidan Augustin. “We’ve addressed that head-on by building a marketing and analytics platform that tracks the entire digital journey and manages campaigns across multiple channels so conversions can be duplicated.”
Platforms like Feathr allow you to make intelligent decisions in real-time and optimize every penny you spend on marketing. If you can clearly see that you are spending considerably more to acquire customers with a YouTube pre-roll video than you are on Facebook, adjust your strategy and start investing more in Facebook and less in YouTube.
But does the customer acquisition cost always paint an accurate picture?
But Michael Julian, chief marketing officer for longstanding New York City festival Electric Zoo, sees his customer acquisition cost as a fluctuating figure that bares less relevance in the music festival vertical than it does in more consistent live event sectors.
“The customer acquisition cost depends heavily on where you are in the festival cycle,” he told Intellitix. “At Electric Zoo, we’ve consistently invested heavily in the early birds because later in the campaign they will promote the festival to their friends. That customer acquisition cost is really high. But that initial push also allows us to gather the crucial data on other fans that we will use carefully—and cost effectively—throughout the campaign.”
Resonating Aidan Augustin’s point, Michael Julian believes that the nature of a broad and diverse marketing campaign—which also utilizes radio, print and flyering—often means that customers may engage on Facebook but buy the ticket via Google search: a one-two punch that skews the true effectiveness of each medium. Instead, he suggests looking a little harder at the outside variables to assess a lead’s warmth.
“Sure we could calculate customer acquisition cost across the entire campaign, but it wouldn’t tell the full story. As far as it relates to knowing what marketing avenues to invest in, we work across all channels and tend to adjust which markets we pursue as opposed to how we pursue them,” he continues. “For example, at a certain point in the year, we know that we aren’t going to sell any more tickets to international fans. Hotels and flights to New York are probably too expensive, so we stop and really focus on the locals that we believe are just a few yards from the finish line.”
“If a CEO in a more traditional industry looked at our customer acquisition cost he’d think we were crazy. But this is a crazy business, and a little bit of crazy goes a long way.” – Michael Julian, chief marketing officer of Electric Zoo