The Internet has made marketing more measurable and accountable with different metrics and analytics that show the contribution of marketing to the bottom line. The most critical measures of marketing are the customer acquisition cost (CAC) and the customer lifetime value (CLV), which at times can be difficult to understand and quantify. Understanding CAC and CLV The CAC is the price a hotel pays to acquire a new customer, which can have a significant impact on RevPAR performance and asset value growth. The CLV is a prediction of the value a business will derive from its entire relationship with a customer. CAC = Marketing Campaign Costs/Total Customers Acquired CLV = Gross profit from all historic purchases for an individual customer Focussing on the channels that produce the best customers in terms of loyalty and profit will generate the highest CLV. Distribution channels should then be optimized based on CAC and CLV - not on the gross revenue of the initial guestroom booking, which is a common mistake among hotel operators. Get the full story at HVS