4d ago in General discussion
Master Your Metrics: The Game-Changing Power of CAC and LTV
Many founders focus on growth, but overlook the core numbers that determine scalability. A deep dive into Customer Acquisition Cost (CAC) and Lifetime Value (LTV) can transform your business strategy.
Actionable Steps:
Calculate your CAC by dividing total acquisition costs (ads, sales teams, etc.) by the number of new customers.
Determine your LTV by analyzing revenue per customer, average lifespan, and churn rate.
Levers to crank your LTV
-Increase Price
-Decrease churn (people buy more times)
-Upsells (better versions of thing)
-Decrease delivery cost
-Sell more
-Cross sell (You buy this, you also get that...Apple is a Master of this)
-Down sell (Worse version of thing)
By optimizing these metrics, you’ll know exactly how much you can afford to spend to acquire a customer and scale confidently.
Now give me an example of how you would decrease churn for a coffee shop or use your own business. Tell us how you'd implement, then do it.
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Master Your Metrics: The Game-Changing Power of CAC and LTV
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