Ever wonder why some companies grow fast while others struggle, even with the same marketing budget? It often boils down to two numbers: LTV and CAC. Get these right, and you’re in the game. Get them wrong, and you’re burning money. When your LTV is much higher than your CAC, you’re set up to scale. But finding that sweet spot means digging into the data—looking at customer behavior, product usage, and retention trends. It's about knowing which acquisition channels bring the best customers, the ones who stick around and spend more over time. In a world where every dollar counts, understanding how long it takes to break even on a new customer and which segments are most profitable gives you an edge. It's not just about growth; it’s about smart growth that pays off. #cac #ltv #fpanda
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#consumerinaights The power of growth. Growth is when you can envision delivering a year’s worth of sales in a month. Obtaining exponential growth comes from uncovering the right consumer insight that creates new different value for the consumer #growth#consumer#value#new
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CEO & Co-Founder - OMG Commerce. We create PROFITABLE SCALE for great DTC and Omni-Channel brands like RTIC, NATIVE, Cumbl, Groove Life, Monin and more.
CAC/LTV ratios are important. When you really know your numbers, you can dial up more aggressive media spend. 💰 That said, I still love the focus and the discipline of first order profitability. First order profitability isn’t right for every brand, but remember that it is still possible to go broke waiting for LTV to come in. ⌛️
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The LTV Trap A common problem I see advertisers face is what I call the "LTV Trap": an advertiser's LTV model is overly complex, likely overspecified, suffers from high variance, and overfits. This becomes clear when the model doesn't generalize either over time or in other specific but not uncommon circumstances (eg., a promotion is run), so the team adjusts the model and waits for more data to accrue. Meanwhile, management or the product team has lost confidence in the LTV model's credibility, generally, and they become suspicious of the model's predictive power going forward. It's very easy to build an LTV model that dramatically overfits. In general, I think teams tend to spend too much time building overly complex LTV models and not enough time building cash flow forecasting tools to help them allocate budget optimally. There's often more value in right-sizing the budget at a cohorted ROAS target than trying to achieve precision with unit economics.
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Two quotes I borrowed for thinking abt 1 // No amt of sophistication is going to correct the fact that all of your knowledge is abt the past, and all your decisions are abt the future. – Ian Wilson (GE, 1970's or 80's) 2 // There are 2 kinds of LTV: those that are wrong; & those you don't know are wrong. – John Kenneth Galbraith <orig> "There are two kinds of forecasters: those who don't know, and those who don't know they don't know." –Galbraith -- cc/ Daniel McCarthy, Eric Seufert, Oaktree Capital Management, L.P., Howard Marks @howardmarks
The LTV Trap A common problem I see advertisers face is what I call the "LTV Trap": an advertiser's LTV model is overly complex, likely overspecified, suffers from high variance, and overfits. This becomes clear when the model doesn't generalize either over time or in other specific but not uncommon circumstances (eg., a promotion is run), so the team adjusts the model and waits for more data to accrue. Meanwhile, management or the product team has lost confidence in the LTV model's credibility, generally, and they become suspicious of the model's predictive power going forward. It's very easy to build an LTV model that dramatically overfits. In general, I think teams tend to spend too much time building overly complex LTV models and not enough time building cash flow forecasting tools to help them allocate budget optimally. There's often more value in right-sizing the budget at a cohorted ROAS target than trying to achieve precision with unit economics.
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President at RevU | Offerwall, Ad Monetization, and Acquisition Expert | Online & Mobile Gaming Specialist
#LTV is one of the most fundamental metrics for growth advertisers, and Eric Seufert makes great points - it's easy for teams to over-engineer their LTV calculations at the expense of other business health KPI's. A great read for all #growth executives as we move into 2025.
The LTV Trap A common problem I see advertisers face is what I call the "LTV Trap": an advertiser's LTV model is overly complex, likely overspecified, suffers from high variance, and overfits. This becomes clear when the model doesn't generalize either over time or in other specific but not uncommon circumstances (eg., a promotion is run), so the team adjusts the model and waits for more data to accrue. Meanwhile, management or the product team has lost confidence in the LTV model's credibility, generally, and they become suspicious of the model's predictive power going forward. It's very easy to build an LTV model that dramatically overfits. In general, I think teams tend to spend too much time building overly complex LTV models and not enough time building cash flow forecasting tools to help them allocate budget optimally. There's often more value in right-sizing the budget at a cohorted ROAS target than trying to achieve precision with unit economics.
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Chief Revenue Officer | Expert in Revenue Growth & Market Expansion | SaaS, MarTech, PropTech, FinTech, EdTech | Strategic Planning | Data-Driven Decision Making
Good Marketers may have data. But great Marketers create insightful strategies. Here is what great a Marketer is not: -Ignoring customer acquisition cost (CAC) -Overlooking lifetime value (LTV) -Relying solely on vanity metrics -Making decisions based on assumptions -Focusing only on short-term gains -Neglecting customer retention -Disregarding data-driven insights But a great Marketer is: -Tracking CAC meticulously -Analysing LTV consistently -Making data-informed decisions -Balancing acquisition and retention -Optimising ROI continually -Understanding customer journeys deeply -Prioritising sustainable growth The best Marketers focus on: -Integrating CAC and LTV analysis -Identifying the most profitable channels -Enhancing customer lifetime value It's fundamentally more than just marketing. Know a Marketer that has transformed your strategy? Tag them below to show them they are appreciated. #MarketingStrategy #CustomerAcquisition #CustomerRetention #DataDriven #ROI #BusinessGrowth #CAC #LTV #DigitalMarketing #CustomerValue #cac #ltv
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Guiding Subscription CEOs to the Proven Path for Recurring Revenue Growth Breakthroughs
📊 𝗦𝘂𝗯𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻 𝗠𝗲𝘁𝗿𝗶𝗰𝘀 𝗖𝗮𝗻 𝗕𝗲 𝗖𝗼𝗻𝗳𝘂𝘀𝗶𝗻𝗴! 🤯 There are so many numbers tossed around—churn rate, LTV, ARPU—and it’s easy to get lost in the noise. But here’s the thing: none of these metrics are useful in isolation. What matters is how you use them to actually drive growth. 𝗧𝗵𝗲 𝗸𝗲𝘆? 𝗬𝗼𝘂𝗿 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻 𝗺𝗲𝘁𝗿𝗶𝗰𝘀 𝗱𝗮𝘀𝗵𝗯𝗼𝗮𝗿𝗱 𝘀𝗵𝗼𝘂𝗹𝗱 𝘁𝗿𝗮𝗰𝗸 𝗲𝘃𝗲𝗿𝘆 𝗽𝗵𝗮𝘀𝗲 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗴𝗿𝗼𝘄𝘁𝗵: 🚀 Attraction 💳 Conversion 🛣️ On-Ramp 🔄 Retention But don't stop there! ➡️ Turn these numbers into a cashflow forecast. This transforms backward-looking numbers into forward-thinking projections. This is the combination that shows you what’s really happening in your business and gives you a roadmap for the next 12-60 months. 💡 𝗜𝗳 𝘆𝗼𝘂’𝗿𝗲 𝗿𝗲𝗹𝘆𝗶𝗻𝗴 𝘀𝗼𝗹𝗲𝗹𝘆 𝗼𝗻 𝗺𝗲𝘁𝗿𝗶𝗰𝘀 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗽𝗿𝗼𝗷𝗲𝗰𝘁𝗶𝗻𝗴 𝗳𝗼𝗿𝘄𝗮𝗿𝗱, 𝗶𝘁'𝘀 𝗹𝗶𝗸𝗲 𝘁𝗿𝘆𝗶𝗻𝗴 𝘁𝗼 𝗱𝗿𝗶𝘃𝗲 𝗮 𝗯𝘂𝘀 𝗯𝘆 𝗼𝗻𝗹𝘆 𝗹𝗼𝗼𝗸𝗶𝗻𝗴 𝗶𝗻 𝘁𝗵𝗲 𝗿𝗲𝗮𝗿 𝘃𝗶𝗲𝘄 𝗺𝗶𝗿𝗿𝗼𝗿! What metrics are you focusing on to drive growth? Let’s talk! 👇 #SubscriptionBusiness #GrowthMetrics #RecurringRevenue #ChurnRate #LTV #CashflowForecast #Retention
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🚀 Transform Your Traffic into Loyal Customers with Explore! 🚀 Introducing the straightforward A/B Testing Tool that empowers your business to thrive. Explore enables you to back your experiments with solid data by running A/B tests, personalization, and overlays. This means maximizing conversions from your existing traffic without breaking the bank. Why opt for Explore? 🔹 Lower acquisition costs 🔹 Acquire more customers 🔹 Boost your revenue Don't miss out on unlocking your business's full potential. Try Explore today and see the difference for yourself! #ABTesting #CustomerAcquisition #DataDrivenDecisions #BusinessGrowth #ExploreTool Click for details : https://lnkd.in/gRgxKGkp
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Marketing Consultant | Driving Inbound Leads for Solopreneurs and Small Businesses by Creating Digital Campaigns that Boost Conversion Rates and Brand Awareness
Know the numbers that drive Business Growth Understand CAC and LTV to scale profitably If you don’t know your CAC (Customer Acquisition Cost) and LTV (Lifetime Value), you’re flying blind. And in business, flying blind is a fast track to crashing. CAC is what it costs you to acquire a customer—marketing spend, sales resources, everything. LTV is how much a customer is worth to your business over their lifetime. When you compare these numbers, you get a clear picture of whether you’re running a profitable operation or burning cash. Here’s the deal: if your CAC is higher than your LTV, your business is a ticking time bomb. It means you’re spending more to acquire customers than they’re worth. But if your LTV is significantly higher than your CAC, congratulations—you’ve got the fuel to scale. Why does this matter for advertising? Because knowing these metrics changes the game. Advertising isn’t just about spending money to get customers. It’s about spending smart money. If you know your CAC and LTV, you can predict how much you can afford to spend to acquire customers profitably. And that’s how businesses scale with confidence. Here’s the truth: The companies dominating their industries are the ones who master these numbers and double down on ads that work. If you want to compete, you can’t afford to ignore this. Want to dive deeper into mastering these metrics? Drop a comment or DM me, and let’s talk! #CAC #LTV #BusinessGrowth #MarketingROI #SpartanEdge
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