CAC (Customer Acquisition Cost)
The average cost to acquire a new paying customer.
CAC (Customer Acquisition Cost) tells you how much money you spend on average to get one new paying customer. It's calculated as: marketing and sales costs / number of new customers. A healthy business requires LTV to be at least 3x CAC.
Example
You spend $1000/month on ads and get 5 new clients. CAC is $200. If client LTV is $1200, the ratio is 6:1 - excellent!
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