LTV CAC for Consumer Subscription App Calculation Question
I'm only really familiar with enterprise LTV / CAC calculation in which I use New ACV Bookings to get to Gross Annual ARPA:
New ACV Bookings
(/) Customers Added
(*) Gross Margin
Gross Annual ARPA
In something like a consumer subscription app, what do you use instead of New ACV Bookings? Is it just the revenue contributed by anyone who becomes a paid subscriber between beginning period and end of period?
For example, say we are calculating LTV / CAC for one quarter. One person joins in each month and pays $1 / month. I assume the value I would use is $6 (1st person pays $3 over the period, 2nd person pays $2, and last person pays $1).
I'm getting a microscopically low LTV / CAC so wondering what my issue is. Thank you.
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