3 Critical Business Development #'s to Undersand

Most business owners I talk to know they need "more leads." But when I ask, "What are you actually paying to acquire a customer?" the room usually goes quiet.

If you don’t know your Customer Acquisition Cost (CAC) compared to your Lifetime Value (LTV), you’re flying blind. You might be spending $500 to make $400—or worse, you might be sitting on a goldmine and afraid to spend the dollar that would return ten.

Here is the quick breakdown you need today:

• Lead Generation Cost: What you pay for a "maybe." (Total Marketing Spend / Total Leads).

• Customer Acquisition Cost (CAC): What you pay for a "yes." (Total Sales + Marketing Spend / New Customers).

• Lifetime Value (LTV): The total "juice." This isn't just the first sale; it's the repeat business and the value of the referrals they bring you.

The Golden Rule: Some say if your LTV isn't at least 3x your CAC, your business model needs an adjustment before you scale. My view is start with knowing where you are with these 3 numbers and you will then recognize some actions to change to move upward.

Want to see how your numbers stack up against other owners in check out some of our group programs like ActionMEMBERS and ActionBOARD.