CAC-LTV-Ratio: Difference between revisions
Jump to navigation
Jump to search
(Created page with "The CAC Ratio looks at how much Sales & Marketing expense you spend to buy $1 of new ARR. It’s the inverse of the Magic Number, which measures how much new ARR is created for each $1 of Sales & Marketing expenses. == Definition == CAC Ratio = last period’s Sales & Marketing expense / this period’s new ARR <math> CAC(\Delta t)=\frac{S_x+M_x}ARR </math> == Details == ;Sales Expenses (S<sub>x</sub>) include * the wages of all of the personnel in Sales, in...") |
Mara Melão (talk | contribs) No edit summary |
||
| (One intermediate revision by one other user not shown) | |||
| Line 6: | Line 6: | ||
<math> | <math> | ||
CAC(\Delta t)=\frac{S_x+M_x}ARR | CAC(\Delta t)=\frac{S_x+M_x}{ARR} | ||
</math> | </math> | ||
| Line 22: | Line 22: | ||
* including Ad Spend in the given time period <small>Δ</small>t | * including Ad Spend in the given time period <small>Δ</small>t | ||
{{RFC_Metric|number=22/ | {{RFC_Metric|number=22/0102|title=CAC-LTV-Ratio|version=0.9|status=proposal|type=metric}} | ||
== See also == | == See also == | ||
Latest revision as of 13:37, 8 December 2022
The CAC Ratio looks at how much Sales & Marketing expense you spend to buy $1 of new ARR. It’s the inverse of the Magic Number, which measures how much new ARR is created for each $1 of Sales & Marketing expenses.
Definition
CAC Ratio = last period’s Sales & Marketing expense / this period’s new ARR
Details
- Sales Expenses (Sx) include
- the wages of all of the personnel in Sales, including commissions
- all expenses for tools used by this personnel
- excluding company-wide tools like email, chat, data storage, etc.
- Marketing Expenses (Mx) include
- the wages all of the personnel in Marketing
- all expenses for tools uses by this personnel
- excluding company-wide tools like email, chat, data storage etc.
- including Ad Spend in the given time period Δt
Standardization Status
Request for Comments (RFC): 22/0102 - CAC-LTV-Ratio
Type: metric
Version: 0.9
Status:proposal