How Usage-Based LTV Can Save SaaS Marketers From the CPA Trap
Discover how B2B SaaS marketers can maximize ROAS by relying on usage to predict lifetime value (LTV) and avoid the cost-per-acquisition (CPA) trap. Read more.
How to Create Efficient Paid Ad Campaigns Using the LTV:CAC Ratio
Measurement & Analytics — Tue., Nov. 7, 2023Evaluating performance accurately is vital for making strategic recommendations, allocating budget, and getting C-suite approval. Customer lifetime value (LTV) is an important metric to measure at any growing company. By measuring LTV in relation to customer acquisition cost (CAC), you can measure the investment required to earn a new customer.
The LTV:CAC ratio is important for profitability measurement, capital allocation, efficiency optimization, sustainability, strategic decision-making, and investor confidence. A good ratio for SaaS companies is 3:1 or better. Calculating it requires your company's historical performance data and an Excel spreadsheet.
The spreadsheet is only a guide and not the end-all-be-all for decisions. Start harnessing the power of LTV:CAC to enhance your marketing efforts and hire PPC consulting services to help allocate budget better.
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How to Create Efficient Paid Ad Campaigns Using the LTV:CAC Ratio
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