Mastering Subscription Metrics: Decoding CAC, LTV, and Profitability

Understanding the financial metrics behind your subscription business is crucial for sustainable growth. In this episode of Subscription Prescription, we delve into the core numbers that drive profitability: Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV).

We'll explore:

How to accurately calculate CAC and LTV

The significance of the LTV:CAC ratio and what it reveals about your business health

Common pitfalls in interpreting these metrics Strategies to optimize your customer acquisition and retention efforts

Whether you're a seasoned entrepreneur or just starting out, this episode will equip you with the insights needed to make informed financial decisions for your subscription model.

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The LTV calculation sheet I mention in the show: https://docs.google.com/spreadsheets/d/1NH1yJgEHaLFjsNDZ1FWAkXm7YfOr82e-8rjth6QFekU/edit?usp=sharing