Lower CAC by Focusing on Customers
If you don’t know what a customer is worth to you over time, you can’t confidently decide how much to spend to acquire a new one
Joseph Loria
5/6/20251 min read
In the past 3 months, I’ve asked over two dozen CEOs, “How much is a customer worth to you over time?”
More than half paused for way too long. ⏸️
Quite a few growth CEOs can quote me their Customer Acquisition Cost (CAC). But, a surprising number don’t know their average Lifetime Value (LTV), or Net Revenue Retention (NRR). 🤔💭
That’s a gap worth closing. ↔️
Because if you don’t know what a customer is worth to you over time, you can’t confidently decide how much to spend to acquire a new one. 💲💲
But it’s not just about calculating the LTV number; it’s about what happens when you maximize that LTV by focusing on the customer experience:
You reduce reliance on constant net-new growth 🐢
You lower effective CAC through retention, expansion, and referrals 🤝
You create more predictable (and profitable) investor-friendly growth 📈
It all starts with some customer-facing operational clarity:
Know customer success by segment (size, ARR, industry, etc.); 💡
Monitor customer health;🩺
Equip your team with clear playbooks to retain and expand. 📚
LTV and NRR are NOT just post-sale metrics. They’re inextricably tied to Sales & Marketing and CAC, and they’re the path to unlock smarter, more sustainable growth. 🛣️
➡️ Want to reduce new customer acquisition pressure and grow more predictably?
Start by maximizing the sizable value already in your customer base.