How to Scale From $1M to $20M with Andrew Faris
Ecommerce Playbook: Numbers, Struggles & Growth
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Acquire Smartly: Customer Value over Time
To succeed in customer acquisition, having either low customer acquisition costs (CAC) or high lifetime value (LTV) is crucial. Low CAC is beneficial as it reduces overall inventory costs and eases cash flow management. Importantly, CAC is more closely related to the average order value (AOV) rather than LTV. This means the cost to acquire a customer is influenced more by their initial purchase value than by their long-term value, indicating that even high-LTV customers can be acquired with similar ad spend efficiency as low-LTV customers.
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