05/11/2023
There is no question about the efficiency and importance of marketing for every company, but we all know that this service needs an investment. 💰
The cost of this marketing investment is called “Customer Acquisition Cost (CAC).” 🧑🏽🦰
On the other hand, once a company acquires a new client, this person starts to generate revenue for the business. The value that this new client adds to the company throughout their journey within it is called “Customer Lifetime Value (CLTV).” 🧑🏽🦰💰
With this information, the company can have an important metric to know the efficiency of the marketing investment. 📈
In terms of numbers, the CLTV must be larger than the CAC, which means that CLTV/CAC must be at least 1. If this number is lower than 1, the company is spending more to capture a new client than the value the client is generating for the business. 🤯
Did you know about this metric? Let us know in the comments 👇🏼