What is LTV-CAC Ratio? π
Customer Acquisition Cost (CAC) and Lifetime Value (LTV) are important metrics for a subscription business to understand the underlying unit economics and inform marketing efforts. Hence, the LTV-CAC Ratio is a good indicator of how valuable your company isββa ratio of 3:1 indicates your customer's value is three times more than the cost of acquisition.
The LTV-CAC ratio helps you determine how much you should be spending on acquiring customers. If this ratio is low, you're pretty much burning money in the long run because if you are spending more to acquire your customers than their expected return on revenue throughout the customerβs lifetime, eventually you will run out of resources to acquire any more customers.
Time To Read: 7 Minutes
Published: February 2022
Link: What is LTV-CAC Ratio? π
Meta announced today that it will be phasing out onboarding of new Shops without checkout on Facebook and Instagram enabled. Beginning April 24 of next year, Shops without checkout on Facebook and Instagram enabled will no longer be accessible. This means that shops that direct people to an e-commerce site to complete a purchase, rather than allowing people to make a purchase directly through Facebook or Instagram, will no longer be accessible.
βIn the U.S., we will focus on helping businesses add checkout to their Shop,β the company wrote in a blog post. βTo ease the transition, we will continue to support Shops that link to a website until April 24, 2024. In select markets where we see a future opportunity to introduce checkout, weβll continue to support Shops that link to a website to make the transition as easy as possible. All other markets will no longer be able to host a Shop on their Facebook or Instagram page or use product tagging in posts beginning on August 10, 2023.β
Read More: Instagram and Facebook will force their checkout experience on Shops soon π
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