klipfolio.com – Measure The Return On Sales and Marketing Investments with the CLV:CAC Ratio
The Customer Lifetime Value to Customer Acquisition Ratio (CLV:CAC) measures the relationship between the lifetime value of a customer and the cost of acquiring that customer. This is a particularly crucial measure for subscription based companies.
So how do you know if you’re spending the right amount? You need some numbers. First, you need to know how long the average customer sticks with you before they cancel their service. Because of course the longer a customer sticks with you, the more valuable they are.
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