Gauging your business’s performance is not new–income statements and balance sheets are as old as capitalism after all. But today’s businesses have a few new measurement tools at their fingertips: CAC (Customer Acquisition Cost) and LTV (Lifetime Value).
Bare with me; I know your eyes are probably glazing over. But if you’re a startup founder, the following is both relevant and vital.
Back to CAC (pronounced ‘kack’) and LTV. By design, each metric puts the customer first. No matter how much you think your product is the end all be all, it’s nothing without customers.
At a minimum, learn what these key performance indicators are and how to calculate them for your business. Further, integrate them into your business early on. Make sure everyone in your company becomes fluent in CAC and LTV.