CAC - Customer Acquisition Cost
CAC, Customer Acquisition Cost, is a metric revealing the cost of a single paying customer from a user acquisition campaign.
In a successful user acquisition campaign, CAC (Customer Acquisition Cost) should be smaller than Average Revenue Per Paying User (ARPPU). It doesn’t make sense to continue running a user acquisition campaign is CAC is very high and is bigger than ARPPU.
CAC optimization is important for user acquisition professionals in order to make money. For optimizing Customer Acquisition Cost:
- Current paying users should be analyzed to understand the potential customers.
- In-app engagement needs to be focused and improved to convince users to spend money.
- Deep linking should be used to provide personalized content to users to convert them.
- LTV (Lifetime value) needs to be maximized.
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