Definition
The average cost to acquire a new customer or subscriber, typically calculated by dividing total acquisition spend by the number of new users acquired. Keeping CAC lower than LTV is essential for profitable growth.
CAC = Total Acquisition Spend / Number of New Paying Customers. Blended CAC includes all channels. Channel-specific CAC isolates spend per channel. For a fuller picture: Fully Loaded CAC = (Ad Spend + Marketing Team Salaries + Tools) / New Paying Customers.
Your CAC should be significantly lower than your LTV — a 3:1 LTV/CAC ratio is the common benchmark. In practice, consumer subscription apps see CAC ranging from $3-15 for monthly plans and $10-40 for annual plans. The right CAC depends on your LTV and payback period targets, not on industry averages.
Four main strategies: improve your conversion rate (same spend, more subscribers), invest in organic channels like ASO and referrals, refine ad targeting to reach higher-intent users, and optimize your onboarding to convert more installs into subscribers. A 20% improvement in trial-to-paid conversion effectively reduces CAC by 20%.
It depends on the decision you are making. For evaluating paid channel efficiency, calculate CAC per channel using only that channel's spend. For overall business health, calculate blended CAC that includes all marketing costs divided by all new subscribers (including organic). Just be consistent in how you report it.
The act of ending a subscription, either by the user or automatically due to billing failure. Understanding cancellation timing and reasons is key for designing retention strategies, deflection flows, and win-back campaigns.
A short feedback form presented during the cancellation process to understand why a user is choosing to leave. These insights inform product improvements, pricing strategy, and targeted win-back efforts.
The percentage of subscribers who cancel or do not renew their subscription over a given time period. Churn can be voluntary or involuntary and is a core metric for measuring retention health and forecasting revenue growth.
The ratio of users who click on a specific call-to-action (e.g., email link, push notification, paywall button) versus those who viewed it. CTR is a key engagement metric for evaluating creative performance and funnel effectiveness. Click-through-rate originated in the email and banner ad world, where everything was on a desktop. With mobile, some companies now call this same metric tap-through-rate since people are tapping on their phone vs clicking on desktop, but at the end of the day it's really the same type of measurement.
A method of analyzing user behavior by grouping users based on shared characteristics — most often the date they first installed or subscribed. This allows teams to compare retention, LTV, and monetization trends across cohorts over time.
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