A guide to customer lifetime value, customer acquisition cost, and unit economics
How do you truly measure the health of your business? While the day-to-day financial health of a company are essential to running the enterprise, the CMO's focus has to be on the customer. One important calculation for measuring customer satisfaction and resulting profitability is LTV:CAC, the ratio of customer lifetime value to customer acquisition cost. This guide will show you exactly how to calculate this ratio. Through a case study of Starbucks, you will be able to determine the best methods for this calculation and the right one to utilize for your company. Other topics include churn rate and how to avoid “the dead zone."