Also known as: Customer acquisition cost, Acquisition cost
The total cost of winning one new customer — including marketing, sales hours and tooling. A healthy CAC is far lower than LTV (ratio of at least 1:3).
Formula: (total sales + marketing costs in a period) / number of new customers in that period. Too low a CAC can signal under-investment in growth; too high a CAC means it isn't scalable. The ideal: an LTV / CAC ratio of 3-5x.
An agency spends €5,000/month on marketing + €2,000/month on sales time. On average 3 new clients/month. CAC = €7,000 / 3 = €2,333. LTV is €36,000 → ratio 15:1 (very healthy, room for more aggressive growth investment).
The total revenue (or profit) a customer generates on average over the entire relationship — crucial for deciding how much you can invest in customer acquisition.
The predictable monthly revenue an agency (or SaaS company) generates from subscriptions — a key KPI because it measures stable income, unlike one-off projects.
The percentage of clients who cancel within a given period (usually per month or year). Keeping churn low is essential to an agency's health, since winning new clients costs more than retaining existing ones.
A pricing model where an agency (or software vendor) pays per active client they manage — instead of per user, per social account or per feature.
The predictable monthly revenue an agency (or SaaS company) generates from subscriptions — a key KPI because it measures stable income, unlike one-off projects.
The percentage of clients who cancel within a given period (usually per month or year). Keeping churn low is essential to an agency's health, since winning new clients costs more than retaining existing ones.
The total revenue (or profit) a customer generates on average over the entire relationship — crucial for deciding how much you can invest in customer acquisition.
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