Period to be considered in the calculation

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Additionally, CAC should be analyzed within a specific time period. The frequency can be monthly, bi-monthly, quarterly, half-yearly, yearly, or whatever makes sense for your business.

But keep in mind that if you analyze month by month, you will be able to make improvements more quickly.

And also stay tuned for any variations that may occur.

In a business that is just starting to use Content Marketing , for example, it is natural that the volume of new clients does not compensate for the investments, because the implementation of the strategy is demanding and the return usually comes in the long term. Therefore, the CAC will probably be high.

In a given month, there may also be an off-curve investment, such pakistan phone data as the purchase of a new tool. But over time, the CAC value should stabilize and you will have a clearer idea of ​​how your strategies are performing.

How to know if your CAC is good?
After doing the calculation we showed above, you might be wondering: how do I know if that number is good for my business?

Each business area or type of company has a different average CAC. So, we have bad news: it is not possible to determine a reasonable Customer Acquisition Cost value for all markets.

But don't be sad: the good news is that if you look inside, you will have the answer you need. Look:

If you have a one-time purchase business (a shoe e-commerce , for example), your CAC should be lower than the average ticket spent by the customer in your store.

Let's say your CAC over the last month has been $500 and your average ticket was $400. In that case, you're taking a $100 loss in customer acquisition for each new customer. If you don't adjust your strategies, you could be on the right path to sinking your company...

If you have a recurring purchase business (a subscription-based software, for example), your CAC should be lower than your LTV. But what does this mean? LTV stands for Lifetime Value , meaning everything a customer spends while connected to your company.

For example, if you pay $200 per month and stay with your software for an average of 4 months, your LTV is $800. If your CAC is $1,000, you are losing $200 in acquiring a new customer.

So, to find out if your CAC is good, look at what the consumer is spending with you. If what they pay exceeds your investment, congratulations: your acquisition cost is favorable.