Customer acquisition cost (CAC)
When you say customer acquisition cost, you are opening the window to a huge world.
The customer acquisition cost is one of the main factors determing your business sustainability. So, it is worth the effort to understand in depth how it may impact your buinsess.
Here you can find all the deepenings you need about customer acquisition cost.
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If you are considering e-commerce, whether you’re a retailer or manufacturer, you probably better go for brick&mortar first. Surprised? No reason to, finance has the answer.
LTV and CAC themselves don’t tell you much, they need to be combined in one metric. Defining such metric as LTV/CAC or LTV-CAC you’re investigating two different aspects of your business.
You run your customer acquisition strategy and get new customers aiming at converting them to repeated purchases. This marketing seems coming for free, right? No!
We acquire leads paying a CPL for then converting them at a certain CR. These two factors determine the CAC. Which of the two factors is more relevant?
When we draw our Business Plan, much of the success is due to the correct estimation of the LTV over CAC. Making errors in this estimation may cause big damages. How big may the damage be?
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