SaaS Marketing Budget Calculator
What is Lifetime Value (LTV)?
Lifetime Value (LTV) is the total revenue a business can expect from a single customer over the course of their relationship.
Example: If a customer spends $50 per month on your subscription service and stays for 24 months, their LTV is $50 × 24 = $1,200.
What is CAC (Customer Acquisition Cost)?
Customer Acquisition Cost (CAC) is the cost of acquiring a new customer, including expenses like marketing, sales, and advertising.
Example: If you spend $10,000 on marketing and acquire 100 customers, your CAC is $10,000 ÷ 100 = $100.
What is the LTV/CAC Ratio?
The LTV/CAC ratio measures the efficiency of your customer acquisition efforts by comparing the revenue generated by a customer to the cost of acquiring them.
- Ideal Ratio: A healthy LTV/CAC ratio is usually 3:1.
- Example: If your LTV is $1,200 and CAC is $400, your ratio is 1,200 ÷ 400 = 3:1.
What is PPC (Pay-Per-Click)?
Pay-Per-Click (PPC) is a digital advertising model where advertisers pay a fee each time someone clicks on their ad.
Example: A Google ad campaign costs $1 per click. If your ad gets 100 clicks, you pay $100.
What is Conversion?
A conversion occurs when a visitor completes a desired action, such as making a purchase, signing up for a newsletter, or downloading an app.
Example: If 1,000 people visit your website and 50 make a purchase, you’ve had 50 conversions.
How to Calculate Conversion Rate and CAC?
Example: If you have 500 visitors and 25 conversions, your conversion rate is: (25÷500)×100=5%
What is Churn?
Churn refers to the percentage of customers who stop doing business with your company within a given time frame.
Example: If you had 1,000 customers and lost 50, your churn rate is: (50÷1,000)×100=5%
Common questions around marketing budget calculator
How accurate the data is?
We create a 3-year projection based on your input, providing a clear overview of how your marketing efforts are likely to evolve over time. Marketing is all about testing and discovering the sweet spot for success.
Can we download the data?
Do you store the data?
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