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CAC (Customer Acquisition Cost)
Definition
The total cost of acquiring a new customer, including marketing and sales expenses. A healthy business has LTV significantly higher than CAC.
Related Terms
LTV (Lifetime Value)
The total revenue a customer generates throughout their relationship with a business. Used to determine how much to spend on acquiring customers.
ROI (Return on Investment)
A metric measuring the profitability of an investment. Calculated as (Revenue - Cost) / Cost × 100%. Positive ROI means profit, negative means loss.
CPA (Cost Per Action)
A pricing model where advertisers pay for a specific action taken by a user, such as a purchase, sign-up, or deposit. CPA is the most common model in affiliate marketing.
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