Effects of reducing CAC

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Consumers might be hesitant to commit to a subscription, that’s why it’s important to provide a flexible service and then communicate that to potential subscribers.

Letting people know they can skip and pause orders, and even easily unsubscribe, can them feel more comfortable.

Clean Remedies CBD subscription LTV

CBD products are meant to help people relax, and Clean Remedies keeps up this ‘peace of mind’ concept in how they promote their subscriptions. This handy infographic promotes the customer’s ability to save money, set the frequency, and skip, pause, or cancel with ease.

If you can effectively lower CAC, you’ll give have more telegram data room to be profitable even if the other three levers are at a less than ideal state. It allows:

Lower average revenue per customer

Because you’re spending less to get every customer, you don’t need as much revenue from them to cover acquisition costs. This usually means it’s cheaper to acquire new customers than to persuade existing customers to spend more (particularly for single-product subscriptions).
Higher cost of goods sold

Because you’re spending less attracting customers, you can afford to spend more on your products. Often, higher COGS leads to higher-quality products, which is what attracts customers to your brand and brought you a low CAC in the first place.
Higher churn

Because you can afford to get new customers when others leave since the cost of acquiring them is low (likely thanks to viral word of mouth). Higher churn rates may also be common with subscriptions that don’t need to be fulfilled as often.
To learn more about CAC and how to reduce it, download our free ebook. It also goes in depth into many other aspects of LTV and included dozens of real-life example on how merchants are reducing customer acquisition costs.