Saturday, February 12, 2011

Customer Acquisition Cost vs. Long Term Value (Monetization)

This presentation highlights a constant debate we have with entrepreneurs when they pitch us: Cost of Customer Acquisition (CAC) - always underestimated, vs. Long Term Value of that Customer (LTV) - as in the revenues derived from acquired customers.

And indeed entrepreneurs always underestimate CAC and overestimate LTV, both in time and absolute value .