You need two numbers: the amount your business spent over a given period of time on sales, marketing, and related expenses, and the number of customers you picked up during the same period.
Your CAC is equal to your expenses divided by the number of customers.
Whether or not you’re making money, how much you’re making and where it’s coming from are all important.
Depending on your product, you may have a harder time achieving higher revenue streams than other companies.
If your CAC is higher than your LTV, you’re losing money. Product metabolism is a relatively new metric, coined in this blog post.
The idea is that your product metabolism is a measure of how quickly your team makes decisions and rolls out updates to your products.
How much will a given customer spend over the course of their time using your product?
If you charge a monthly fee for your product, you need to find out how long the average customer stays with you.
It is simple to calculate, but the result might not be what you expect.
Use analytics tools like Panalysis to determine your customer acquisition cost.