This calculator helps B2C businesses model the potential impact of optimizing Customer Acquisition Cost (CAC) for their High Lifetime Value (LTV) customer segments.
Input Fields Explained:
- Current Monthly Ad Spend: Your total advertising budget per month.
- Current CAC (High-LTV Segment): The average cost to acquire one customer specifically from your identified High-LTV segment. If unsure, you can start with your overall average CAC, but a segment-specific CAC will yield more accurate results.
- % of Ad Spend on High-LTV Customers: The portion of your total ad spend currently dedicated to acquiring these High-LTV customers.
- Average LTV (High-LTV Customer): The total net profit you expect from an average customer in your High-LTV segment over their entire relationship with your business.
- Average Order Value (AOV): The average revenue generated per transaction.
- Gross Margin %: Your profit margin before operating expenses, calculated as ((Revenue - Cost of Goods Sold) / Revenue) * 100.
- Your Industry: Helps tailor benchmarks and AI insights.
- Implementation Timeframe: The period over which you expect to implement and see results from optimization efforts. Longer timeframes generally allow for achieving a greater portion of the potential CAC reduction.
- Target CAC Reduction % (High-LTV): Your goal for reducing CAC within your High-LTV segment. The calculator will show industry benchmarks to help guide this input.
Output Metrics:
The calculator will project several key performance indicators (KPIs) based on your inputs, including Optimized High-LTV CAC, additional customers you could acquire, potential monthly savings, LTV:CAC ratio, and ROI on your optimization efforts.
AI Enhancement:
Click "Enhance with AI Predictions" to get suggestions from Gemini AI for CAC reduction, LTV increase, and implementation timeline, along with strategic insights. You can then choose to apply these AI-driven figures to the calculator.
Note: This tool provides estimates for planning and strategic discussion. Actual results will vary based on specific business conditions, market dynamics, and execution quality.