Lifetime Value: Customer Acquisition Cost (LTV:CAC) Metric
Measure the relationship between the lifetime value of a customer and the cost of acquiring that customer.
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The Lifetime Value:Customer Acquisition Cost metric is by far one of the most key metrics to monitor for your business. Tracking the total value of a single customer and comparing it to the cost of acquiring them gives you insight into how effective your spending is, while also giving you the data to justify your customer acquisition spend.
Gross Margin % X ( 1 / Monthly Churn ) X Avg. Monthly Subscription Revenue per Customer : Sales and Marketing Costs / New Customers Won
Example of KPI target
CEO, CMO, Marketing Manager, Sales Manager
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