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The Dangers of LTV
Founder's Journal
CAC & Cash Contribution
Marketers should calculate SAC by dividing spend by total customers, excluding organic customers. It is crucial to consider the marginal cash contribution rather than discounting revenues to fairly estimate future profitability. Including all variable costs in the calculation is essential. Avoid the mistake of including customers acquired organically in the calculation as it artificially lowers the cost of acquiring paid customers. Focus on cash contribution over revenues to assess the actual profit generated by acquired customers.
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