6AM City treats its reliable cost-per-subscriber from Meta lead ads as the baseline for evaluating all other growth tactics. For any new initiative, like a community event, they compare the cost against the number of subscribers it would have generated via Meta ads. If a $5,000 event doesn't yield 5,000 subscribers, the ROI is considered negative.
ROAS (Return on Ad Spend) is a vanity metric that can mask unprofitable customer acquisition. By focusing on POAS (Profit on Ad Spend), brands are forced to measure the actual profit generated from advertising, linking marketing directly to bottom-line health and avoiding the trap of 'growing broke'.
To ensure positive Return on Marketing Investment (ROMI), Autodesk's CMO uses a simple rule: a partnership must generate at least three dollars for every dollar spent. This financial discipline forces marketers to pursue only high-impact collaborations that act as a force multiplier for the brand.
To prove marketing's ROI, run geo-fenced ad campaigns targeted at a specific set of retail locations. By comparing sales in these "test" stores against a control group of similar stores, you can measure the direct, incremental sales lift caused by your creative, providing black-and-white accountability.
Lifetime Value (LTV) is meaningless in isolation. The key metric for investors is the LTV to Customer Acquisition Cost (CAC) ratio. A ratio below 3:1 indicates you're overspending on growth. The 3:1 to 5:1 range is healthy, while anything over 5:1 is world-class and attracts premium valuations.
Resident's team doesn't set fixed goals (e.g., "Meta must hit 200% ROAS"). Instead, they constantly evaluate channels relative to each other in real-time. This flexible approach allows them to dynamically shift budget to the most efficient platforms as market conditions change, maximizing overall yield.
While views and followers are useful signals, the key business indicator of a successful personal brand is its effect on core financial metrics. Specifically, a strong personal brand should lower the company's customer acquisition cost (CAC). This provides a tangible, high-level metric to gauge the brand's real-world business value.
To challenge managers' insistence on expensive Yellow Pages ads, Jim Clayton installed a dedicated red phone with a number used only in that ad. When the phone never rang, it provided undeniable proof of zero ROI, allowing him to cut the spend based on data, not opinion.
Shift the mindset from a brand vs. performance dichotomy. All marketing should be measured for performance. For brand initiatives, use metrics like branded search volume per dollar spent to quantify impact and tie "fluffy" activities to tangible growth outcomes.
Counterintuitively, dedicating budget to campaigns optimized for engagements, follows, and shares can be a powerful brand-building tool. This approach reaches more people less expensively than conversion campaigns, building an audience and 'searing memories' that lead to future demand, complementing direct response efforts.
To profitably scale a SaaS with paid ads (Meta, YouTube), you cannot rely on low-ticket monthly subscriptions. The customer acquisition cost will almost always be too high to be sustainable. You must have a high-ticket enterprise plan to ensure a positive return on ad spend from day one.