Using CVP in Internet Marketing

CVP is a management accounting tool that express relationship between sales volume, cost and profit. CVP can be used in the form of graph or an equation.

CVP Analysis can be used in marketing to determine the point of maximum profit for a company engaged in Internet Marketing efforts, in relation to the cost of those efforts and the volume of sales created. It is a key measurement in determining marketing strategy and developing realistic business goals (increased profit volume or market share.)

CVP Analysis is a multi-variable equation that takes into account various middle metrics, including Return on Investment (ROI) and Customer Acquisition Cost (CAC). Some marketers, particularly in online marketing firms, use CVP Analysis to predict where maximum profit volume exists for their clients, and manipulate the middle metrics to in order to make the path to success more efficient.

Using CVP Analysis, marketing firms can measure the results of media campaigns along the Customer engagement cycle and convert the data into sound business strategy. Through predictive analysis, they are able to gauge the effects of future marketing mix changes to produce maximum profit volume or increased market share for their clients.