What is Customer Acquisition Cost (CAC) and how does the CAC:LTV ratio inform marketing strategy?

Digital Marketing Hard

Digital Marketing — Hard

What is Customer Acquisition Cost (CAC) and how does the CAC:LTV ratio inform marketing strategy?

Key points

  • CAC encompasses all marketing and sales costs, not just advertising or customer service.
  • The CAC:LTV ratio is crucial for assessing business viability beyond profitability.
  • A ratio where LTV approaches CAC signals potential issues with marketing efficiency.
  • The 1:3 ratio is a general benchmark, not a one-size-fits-all target.

Ready to go further?

Start full exam Practice more questions

Related questions