Digital Marketing Basics Part 1: Understanding CAC, nCAC, LTV

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Mar 21, 2025

Explore the crucial metrics of Customer Acquisition Cost (CAC), New Customer Acquisition Cost (nCAC), and Lifetime Value (LTV) for scaling your business. Dive into how to apply these metrics for real-world success, enhance profitability projections, and optimize your marketing strategies. Discover the balance between costs and customer value, plus the importance of a structured sales process. With a sprinkle of humor, the discussion wraps up with tips on enhancing customer retention and maximizing growth.

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INSIGHT

Understanding CAC, NCAC, LTV & ROAS Limits

Understanding CAC, NCAC, and LTV deeply is essential to analyze marketing success effectively.
ROAS alone is misleading due to brand influence and funnel contributions from multiple channels.

ADVICE

Benchmark Your Own Metrics

Define your Lifetime Value (LTV) and New Customer Acquisition Cost (NCAC) clearly to guide marketing investments.
Benchmark against your own brand data rather than industry averages for effective scaling.

INSIGHT

LTV Determines CPA Strategy

A good LTV with high repeat rate means you can afford a higher CPA on the first sale.
Your willingness to lose, break-even, or profit on the first sale affects how aggressively you can set CPA targets.

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