Get your LTV1
than CAC3 with
a brand story.
1 Customer Lifetime Value (LTV) is how much your average customer pays you over time
3 Customer Acquisition Cost (CAC) is total costs to gain an average customer
2 300% or 3:1 is the ideal ratio of LTV/CAC that gives you enough margin to scale
Customer Lifetime Value
Customer lifetime value LTV goes up when you keep customers coming back. Branding makes this possible. Without a uniquely differentiated value proposition wrapped in an enduring brand story, you're just a fungible commodity–easily replaced.
Branding can turn customers into subscribers raising customer lifetime value (LTV1) to 3x CAC2 (3:1)
1 LTV = Annual revenue per customer * time retained
Branding can motivate customers to refer more customers lowering customer acquisition cost (CAC2) to 0.33 LTV1 (3:1)
2 CAC = All annual expenses / total number of customers
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