Definition of CAC & LTV
What Is CAC & LTV
Business, Customer and Marketing, are three different words. But the most interesting thing is if we omit any one of them, the other two words will be meaningless. Because they are interrelated. Just like that a business customer and a Business owner are either directly or indirectly interrelated.
CAC and LTV are two parameters, by which we can understand the customer’s choice and which kind of discount is needed.
CAC is an amount of money that is spent by a Company to give a chance to the customer to use their products at least once. Generally, it seems like a free trial of a product. Actually, behind this, there are some benefits like :
What is LTV?
If we talk about LTV, then we have to understand that LTV is just a parameter. By this LTV we can assume how much product will be bought by a customer in a certain time.
LTV = Σ(PURCHASE AMOUNT OF A CUSTOMER IN A CERTAIN TIME)
After assuming the LTV or we can say the Life Time Value of a customer company has to calculate the ratio of LTV and CAC.
CAC / LTV
By this ratio, we can determine the CAC or Customer Acquisition Cost of the customer or the product. Besides that, we also can understand the database of our customers.
CAC and LTV both are a very complicated processes, which is why we, Team TCB are here to provide you with all type of business consultancy, Even we can say the best consultancy and marketing strategy, and as our tagline, we can surely say that,
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- FAQs
CAC or Customer Acquisition Cost is an amount of money that is spent by a Company to give a chance to the customer to use their products at least once.
If we talk about LTV or Life Time Value then we have to understand that LTV is just a parameter. By this LTV we can assume how much product will be bought by a customer in a certain time.
- Make a customer a repeating customer of the company
- More trust build
- Attract Customers
Generally it seems like a free trial of a product.
After assuming the LTV or we can say the Life Time Value of a customer company has to calculate the ratio of LTV and CAC.
By this ratio we can determine the CAC or Customer Acquisition Cost of the customer or the product.
So, Team TCB are here. We provide you all types of services to make your business digitally present and increase your brand value.
