Mobile App Customer Acquisition Cost (CAC)

Jan 22, 2024

22 Min Read

1. Can you explain the concept of Customer Acquisition Cost (CAC) in mobile app development?


Customer Acquisition Cost (CAC) is the cost incurred by a company to acquire a new customer through various marketing and advertising efforts. In the context of mobile app development, CAC refers to the amount of money spent on marketing, advertising, and other promotional activities to acquire a new user for the mobile app.

It is an important metric for businesses, especially for those in the mobile app industry, as it helps them understand how much they are spending to get each new user or customer. This cost includes all expenses related to customer acquisition, such as paid advertisements, social media marketing, influencer collaborations, referral programs, etc.

Calculating CAC can help businesses evaluate their marketing strategies and optimize their efforts to acquire customers more efficiently and cost-effectively. It can also provide insights into the overall profitability of a business by comparing it with the lifetime value of customers (LTV), which represents the revenue generated from each customer over their lifetime.

In summary, CAC is a crucial metric for businesses as it helps them understand how much they need to invest in acquiring new customers and how successful their marketing efforts are in attracting new users to their mobile app.

2. How does CAC differ between different types of mobile apps, such as gaming vs. productivity apps?


CAC can differ between different types of mobile apps due to various factors such as the target audience, budget, and pricing structure. For example:

1) Target Audience: The target audience for gaming apps is often younger individuals who are more likely to download and try out different apps without much cost consideration. On the other hand, productivity apps usually target professionals or businesses who may have a higher value for their time and money and may be less likely to try out new apps that require a significant investment.

2) Budget: Gaming companies tend to have larger budgets for user acquisition as they often rely heavily on advertising and paid marketing to reach a wide audience. This results in a higher CAC for gaming apps compared to productivity apps that may rely on word-of-mouth referrals or organic search traffic.

3) Pricing Structure: Gaming apps typically follow a freemium model where users can download the app for free but can make in-app purchases for additional features or virtual items. This allows companies to offset their CAC with revenue from these purchases. Productivity apps, on the other hand, may charge a one-time fee or have a subscription model, resulting in a lower CAC as the revenue from each customer is higher.

Overall, gaming apps tend to have a higher CAC compared to productivity apps due to their target audience, budget, and pricing structure. However, this may vary depending on the specific app and its marketing strategy.

3. What role does advertising play in determining the CAC of a mobile app?


Advertising can play a significant role in determining the CAC (customer acquisition cost) of a mobile app. Advertising is typically used as a marketing strategy to promote and attract potential users to download and use the app. This can be done through various forms of advertising such as social media, search engines, digital ads, influencer partnerships, and more.

The following factors influence how much an app will spend on advertising and ultimately affect its CAC:

1. Target audience: The target audience for the app will determine which advertising platforms are most effective in reaching potential users. Different demographics may respond better to certain types of ads, influencing where the app should focus its advertising efforts.

2. Competition: If there are many similar apps competing in the market, this can drive up the cost of acquiring new users through advertising. Ad space becomes more competitive and companies may have to spend more to stand out.

3. User acquisition strategy: The type of user acquisition strategy used also impacts the CAC. For example, if an app chooses to pay for installs through incentivized campaigns or app store optimization techniques like buying keyword installs, it can significantly lower the CAC.

4. Ad performance: The effectiveness of ad campaigns can greatly impact the CAC. If ads are not performing well, they may be costly and bring in fewer users at higher prices. On the other hand, well-performing ads can lead to a lower CAC.

5. Cost per click/impression/view: The cost per click (CPC), cost per impression (CPM), or overall cost per view (CPV) all factor into the CAC calculation. Higher costs for these metrics will result in a higher overall customer acquisition cost.

Overall, effective advertising strategies that target specific demographics and convert to downloads at reasonable costs can help keep the CAC low for an app. However, inefficient or expensive advertising methods could significantly increase a mobile app’s customer acquisition cost.

4. How do organic vs. paid user acquisition strategies impact the CAC?


Organic and paid user acquisition strategies can impact the customer acquisition cost (CAC) in different ways.

1. Organic User Acquisition:
Organic user acquisition refers to the process of acquiring users without spending money on marketing or advertising. This can include tactics such as word-of-mouth, social media sharing, and search engine ranking. The impact on CAC from organic user acquisition is often lower compared to paid strategies because there is no direct cost associated with acquiring users. However, it still involves investing resources in creating valuable content or engaging with potential customers, which can indirectly impact CAC.

2. Paid User Acquisition:
Paid user acquisition refers to the process of acquiring users through paid advertising or marketing efforts, such as social media ads, display ads, influencer partnerships, etc. This strategy involves a direct cost for each new user acquired, which leads to a higher CAC. The effectiveness of this strategy in reducing CAC depends on various factors like targeting the right audience and optimizing ad campaigns for better conversion rates.

3. Impact on CAC:
The impact of organic vs. paid user acquisition strategies on CAC can vary significantly based on the nature of the business and its target market. In some cases, businesses may find that investing heavily in paid advertising results in a lower CAC due to high conversion rates and a strong return on investment (ROI). On the other hand, businesses with highly engaged customers may see little benefit from paid strategies and prefer focusing on organic methods.

Ultimately, a combination of both organic and paid strategies may be most effective in reducing CAC by leveraging the strengths of each approach. For example, using organic methods to build brand awareness and trust can help improve ROI from paid campaigns by increasing conversion rates. Additionally, continuously monitoring and analyzing metrics from both strategies can help identify areas for improvement and optimize overall customer acquisition efforts.

5. Can you give an example of a successful mobile app with a low CAC?


One example of a successful mobile app with a low CAC is WhatsApp. The messaging app was able to acquire millions of users with a relatively low CAC by relying on word-of-mouth marketing and user referrals. They also offered a free trial period for users to try out the app before requiring payment, which helped lower their CAC. By providing a valuable and convenient service, WhatsApp was able to quickly gain popularity and attract millions of users at a low cost compared to traditional digital advertising campaigns. The app eventually reached over 2 billion active users and was acquired by Facebook in 2014 for $19 billion.

6. What factors contribute to a high CAC for a mobile app?


1. High competition: When a market is crowded with similar apps, it can be difficult and expensive to acquire new users because they have many options to choose from.

2. Limited reach: With millions of apps available in the app stores, it can be challenging for a single app to gain visibility and reach potential users.

3. App discoverability: App store algorithms are constantly changing, making it difficult for new or less popular apps to appear in top search results and get noticed by users.

4. User retention: It is crucial for mobile apps to retain their users in order to justify the cost of acquisition. If users don’t find value in the app and uninstall it, the CAC becomes a sunk cost.

5. Quality of user acquisition channels: Not all user acquisition channels are created equal. Some channels may deliver a high number of downloads but lower-quality users who are less likely to engage with the app or make any purchases.

6. Frequent updates: Mobile apps need to stay relevant and updated in order to keep existing users engaged and attract new ones. However, frequent updates come at a cost and can contribute significantly to the overall CAC.

7. Ineffective marketing strategies: If an app’s marketing strategies are not well-planned or executed, it can lead to low conversion rates and higher CAC.

8. Cost of paid advertising: Paid advertisements on social media platforms or mobile ad networks can be expensive, especially if targeting specific demographics or locations.

9. Targeting the wrong audience: Choosing the wrong target audience can result in wasted marketing efforts and higher CAC as these users are less likely to convert into paying customers.

10. High churn rate: Churn rate refers to the percentage of customers who stop using an app over time. A high churn rate means that more resources will need to be spent on acquiring new customers, resulting in a higher CAC.

7. Is there a benchmark or standard CAC that developers should aim for?


There is no set benchmark or standard CAC that developers should aim for as it can vary greatly depending on the industry, product, and target audience. Generally, a lower CAC is desirable as it indicates more efficient and cost-effective customer acquisition. However, the definition of “low” will differ for each business and its specific goals and resources. It’s important for developers to regularly track their CAC and compare it to industry averages and their own historical data to determine if they are meeting their desired targets.

8. How can data and analytics be used to optimize and reduce CAC for a mobile app?


Data and analytics can be used to optimize and reduce customer acquisition costs (CAC) for a mobile app in the following ways:

1. Targeted Audience Selection: Data analytics can help identify the most relevant and profitable audience segments for your mobile app. By analyzing user demographics, behavior patterns, and user preferences, businesses can target their marketing efforts towards the right audience, resulting in more effective user acquisition at a lower cost.

2. User Behavior Analysis: By tracking key metrics such as app usage frequency, time spent on the app, and conversion rates, businesses can gain valuable insights into how users interact with their app. This data can help identify areas of improvement and optimize the user experience to increase retention and reduce churn rate.

3. A/B Testing: A/B testing involves creating two versions of an ad or landing page and testing them against each other to see which one performs better. By using data analytics to track metrics such as click-through rate (CTR), conversion rate, and cost-per-action (CPA), businesses can determine which version is more effective at acquiring users at a lower cost.

4. Referral Tracking: Referral programs are a great way to acquire new users at a low cost because they rely on word-of-mouth advertising from existing satisfied customers. Analytics tools can track referrals and help businesses understand which channels are bringing in the most quality leads.

5. Channel Optimization: Data analytics can provide insights into which marketing channels are driving the most conversions for your mobile app. Businesses can use this information to allocate their marketing budget towards high-performing channels, reducing CAC in the long run.

6. Predictive Modeling: Advanced analytics techniques such as machine learning can be used to build predictive models that forecast future performance based on historical data. This helps businesses make data-driven decisions while planning campaigns and budgets, optimizing CAC.

7. Cost Reduction Strategies: Data analytics can also help identify areas where costs can be reduced without impacting user acquisition. For example, analyzing data may reveal that one particular ad network is delivering the same results as another at a lower cost.

8. App Store Optimization (ASO): ASO involves optimizing your mobile app’s name, title, keywords, and descriptions to rank higher in app store search results. By using data analytics to track keyword performance and user behavior on the app store, businesses can improve their ASO strategy and acquire more users organically, reducing CAC.

9. Does the target market or demographic affect the CAC of a mobile app?

Yes, the target market or demographic can affect the CAC of a mobile app. For example, if the app is targeting a younger audience who are more technologically savvy and likely to download new apps, the CAC may be lower. On the other hand, if the app is targeting a niche market with specific interests, the CAC may be higher as it will require targeted marketing efforts. Additionally, if the target market is located in an area with high advertising costs or competition from other apps, this could also increase the CAC.

10. Is there a correlation between retention rates and CAC for a given app?



To begin, let’s look at two different scenarios to determine the possible relationship between retention rates and CAC for a given app.

Scenario 1:
In this scenario, there is a strong correlation between retention rates and CAC. This means that as retention rates increase, CAC also increases or vice versa. This could be due to various factors such as a highly competitive market where apps need to constantly spend more on marketing and advertising to retain customers.

In this case, it would be beneficial for the app developer to focus on improving retention rates in order to decrease CAC. Improving the overall user experience, providing regular updates and new features, and implementing effective customer engagement strategies can all contribute to better retention rates.

Scenario 2:
On the other hand, in this scenario there is no significant correlation between retention rates and CAC. This means that retention rates may remain consistent regardless of how much is spent on acquiring new users. This could happen if the app has very loyal customers who continue to use it regardless of external factors or if the app caters to a niche market with limited competition.

In this case, it might be more beneficial for the app developer to focus on maintaining customer loyalty rather than trying to decrease CAC. Strengthening relationships with existing users through personalized messaging, rewards programs, or exclusive content can help keep them engaged and reduce the need for constantly acquiring new users.

Overall, while there may be correlations between retention rates and CAC in some cases, it is important for app developers to analyze their specific market and user base in order to determine the best approach for reducing costs while maintaining high retention rates.

11. What are some effective ways to track and measure the success of customer acquisition efforts for a mobile app?


1. Downloads: One of the most obvious ways to measure the success of a customer acquisition strategy is by tracking the number of app downloads. This will give you an overall idea of how many people are interested in your app and are willing to take the time to download it.

2. App Store Ranking: Monitoring your app’s position in the app store rankings can also give you an idea of its popularity among users. A higher ranking indicates that your app is easily discoverable and appealing to potential users.

3. Cost per Acquisition (CPA): Tracking the cost per acquisition will help you understand how much you are spending on acquiring each new customer. This can be calculated by dividing the total marketing spend by the number of new customers acquired during a specific period.

4. Conversion Rate: The conversion rate measures the percentage of people who downloaded your app after interacting with an ad or other promotional material. A high conversion rate indicates that your customer acquisition efforts are effective.

5. User Retention: Keeping track of user retention rates can provide insights into whether your customers find value in your app and continue using it over time. If retention rates are low, it may indicate room for improvement in customer experience.

6. In-app Engagement: Tracking in-app engagement metrics, such as session length, screen views, and actions taken, can provide valuable information about how users interact with your app and whether they find it useful and engaging.

7. Referral Tracking: Utilizing referral tracking tools can help measure how many new users were acquired through word-of-mouth or referral marketing efforts.

8. Surveys and Feedback: Conducting surveys or gathering feedback from customers can provide valuable insights into what attracted them to your app and why they chose to download it.

9. Social Media Metrics: Keep an eye on social media metrics such as likes, shares, comments, and engagements related to your mobile app to gauge its popularity among potential users.

10. A/B Testing: Conducting A/B testing on different elements of your app, including messaging, visuals, and call-to-action, can help you understand what resonates with your target audience and optimize your customer acquisition strategy accordingly.

11. Return on Investment (ROI): Tracking ROI for your app’s customer acquisition efforts can provide an overall understanding of the effectiveness of your marketing strategy. This can be calculated by subtracting the cost of acquiring a customer from the revenue generated by that customer.

12. Does the type of monetization strategy used by an app have an effect on its overall CAC?


The type of monetization strategy used by an app can have an effect on its overall CAC. Some monetization strategies, such as in-app purchases or subscriptions, may require a lower CAC because users are more likely to spend money on the app after they have already downloaded it. In contrast, advertising-based monetization strategies may require a higher CAC because the app has to attract a large number of users in order for the advertising revenue to be significant. Ultimately, the most effective monetization strategy will depend on the specific app and its target audience.

13. How can social media marketing be utilized to lower CAC for a mobile app?


1. Leverage Influencers: Partner with influencers who have a large and engaged following in your target audience. They can promote your app through sponsored posts or stories, which can result in more downloads and lower CAC.

2. Run Social Media Ads: Use social media ads to reach a wider audience and promote your app. Platforms like Facebook, Instagram, and LinkedIn have advanced targeting options that allow you to reach specific demographics, interests, and behaviors.

3. Create Engaging Content: Share high-quality content on social media platforms to attract users’ attention towards your app. This can include tutorial videos, infographics, user-generated content, or behind-the-scenes looks at the development process.

4. Host Contests and Giveaways: Contests and giveaways are a great way to generate buzz around your mobile app and encourage people to download it without spending much on advertising.

5. Utilize User-Generated Content: Encourage your users to share their experiences with your app through reviews, posts, or stories on social media. This word-of-mouth marketing is an effective way to gain trust among potential new users and lower CAC.

6. Engage with Your Audience: Interact with your followers on social media by responding to comments, messages, and mentions. This will increase engagement and build a community around your brand.

7. Use Custom Tracking Links: Utilize custom tracking links for each social media platform you’re active on to measure the effectiveness of each channel in terms of driving app installs.

8. Offer Incentives for Shares/Referrals: Encourage users to share your app or refer it to their friends by offering rewards such as discounts or free premium features.

9. Optimize for App Store SEO: Utilize relevant keywords in the description of your app on social media platforms so that it ranks higher in searches within the respective app stores.

10. Partner with Complementary Apps: Collaborate with other apps that have a similar target audience, but are not direct competitors. This way, you can exchange promotions and reach a wider audience.

11. Utilize Facebook Lookalike Audiences: Use the “Lookalike Audience” feature on Facebook to find new users who have similar characteristics as your current users.

12. Utilize Retargeting Ads: Run ads on social media platforms to target users who have expressed interest in your app but haven’t converted yet.

13. Test and Analyze: Continuously test different ad creatives, targeting options, posting times, etc., and analyze the results to optimize your social media marketing strategy for lower CAC over time.

14. Are there any trends or shifts in user behavior that impact the calculation of CAC for mobile apps?


Yes, there are several trends and shifts in user behavior that can impact the calculation of CAC for mobile apps. These include:

1. Increased use of ad blockers: With the rise of ad blocking software, it has become more challenging to reach potential users through traditional advertising methods like display ads or pop-ups. This can increase the cost per impression (CPI) and ultimately impact the overall CAC.

2. The growing popularity of video ads: Video ads have become one of the most effective ways to advertise on mobile devices, but they can also be very costly. If a mobile app relies heavily on video ads for user acquisition, it may lead to a higher CAC.

3. Shift towards in-app purchases: Many mobile apps now offer in-app purchases as their primary revenue source, which means that user behavior has shifted from paying a one-time fee for an app to making multiple transactions within the app. This change in behavior can affect how CAC is calculated, as it may take longer for an app to recoup its acquisition costs.

4. Mobile-first approach: As more people rely heavily on their mobile devices for everyday tasks and activities, brands are shifting towards a “mobile-first” approach when implementing their digital marketing strategies. This focus on mobile can result in higher advertising costs and therefore impact the CAC for mobile apps.

5. Changing social media landscape: Social media platforms continue to evolve and change, with new platforms emerging while others decline in popularity. This makes it challenging for brands to reach their target audience effectively and efficiently, potentially increasing the CAC for mobile apps.

6. The rise of influencer marketing: Influencer marketing has become a popular way for brands to reach potential users organically through trusted influencers’ recommendations. However, this type of marketing can be costly and may impact the overall CAC if not executed strategically.

7. Increasing competition in app stores: With millions of apps available in the app stores, competition for user attention and downloads has become fierce. This can result in higher costs for app store optimization (ASO) and app install campaigns, ultimately impacting the CAC for mobile apps.

Overall, these trends and shifts in user behavior highlight the importance of regularly reviewing and adjusting the calculation of CAC to accurately reflect the current market conditions and consumer behavior.

15. Can partnerships or collaborations help in reducing the CAC of an app?


Yes, partnerships or collaborations can help reduce the cost of customer acquisition (CAC) for an app. By partnering with other companies or organizations, an app can gain access to their existing customer base and tap into a wider audience without incurring high marketing costs. Collaborations also allow for sharing resources and expertise, which can be beneficial in creating a stronger and more effective marketing strategy. Additionally, partnerships can lead to cross-promotion opportunities, further expanding the reach of the app without additional expenses.

16. How does App Store Optimization (ASO) play into determining the ultimate cost per acquisition for an app?


App Store Optimization (ASO) helps increase the visibility and discoverability of an app in the app stores, ultimately driving more organic downloads and reducing the cost per acquisition (CPA). By optimizing various elements such as app title, keywords, description, screenshots, and reviews, ASO can improve an app’s ranking in search results and increase its chances of being downloaded. This can result in a lower CPA as more users are organically discovering and installing the app. Additionally, a well-optimized app with positive reviews and ratings can lead to better conversion rates and higher user retention rates, further reducing the overall CPA.

17. How important is user feedback and reviews in improving the efficiency of customer acquisition for an app?


User feedback and reviews are extremely important in improving the efficiency of customer acquisition for an app. This is because they provide valuable insights into how users perceive the app, what features they like or dislike, and any issues or concerns they may have. By gathering and analyzing this feedback, developers can make necessary changes and improvements to their app, making it more attractive to potential customers.

Reviews also play a crucial role in building trust and credibility for an app. Many people rely on reviews before deciding to download an app, so positive reviews can significantly increase the likelihood of acquiring new customers. Conversely, negative reviews can turn potential customers away, highlighting the importance of actively addressing user concerns.

Additionally, user feedback can help identify key areas for growth and expansion. Through understanding what features are most popular among users, developers can focus on promoting these features to attract more customers.

In summary, user feedback and reviews are vital tools in improving customer acquisition for an app. They provide valuable insights, build trust and credibility, and inform future development efforts to attract more customers.

18. What marketing channels are typically most effective in lowering CAC for mobile apps?


1. Social Media Advertising: With almost everyone using some form of social media, platforms like Facebook, Instagram, and Twitter offer highly targeted advertising options that can lower CAC for mobile apps. These platforms allow app developers to reach a large number of potential users with precision targeting based on demographics, interests, behaviors, and more.

2. Influencer Marketing: Collaborating with popular influencers can significantly lower CAC for mobile apps as they already have an engaged audience who trusts their recommendations. Influencers can create sponsored content or reviews promoting the app to their followers, resulting in increased visibility and downloads.

3. App Store Optimization (ASO): ASO involves optimizing various elements of an app store listing such as title, description, keywords, and visuals to improve visibility and generate more organic downloads. A well-optimized listing can attract more relevant users to the app, thereby lowering the overall CAC.

4. Referral Marketing: Encouraging existing users to refer the app to their friends and family can be an effective way to lower CAC as referrals tend to have a higher conversion rate compared to other marketing channels. Incentivizing referrals further incentivizes users to share the app with others.

5. Search Engine Optimization (SEO): Similar to ASO for app stores, SEO helps improve the visibility of an app website on search engines like Google, Bing or Yahoo! This can lead to better traffic and conversions at a relatively low cost compared to other methods.

6. Content Marketing: Creating informative and engaging content about your app can not only attract potential users but also showcase its unique features and benefits. This can help improve brand awareness and credibility while reducing the overall CAC.

7. App Reviews & Ratings: Positive reviews and high ratings play a significant role in convincing potential users about downloading an app. Encouraging satisfied users to leave feedback on app stores or through review sites can help drive more organic downloads, thus lowering CAC.

8. Email Marketing: Email marketing to a targeted list of potential users can be cost-effective in promoting an app and driving conversions. Personalized email campaigns informing users about new features, updates, or exclusive deals can help attract more downloads and lower CAC.

9. Partner/Cross-Promotion: Collaborating with other players in the app market to promote each other’s app can help reach a wider audience at a lower cost. This could include exchanging ads, featuring each other’s apps or even co-developing a new app.

10. Paid User Acquisition Campaigns: While it may not be the most cost-effective option, running paid user acquisition campaigns on various channels such as Google Ads or AdMob can effectively target potential users based on their search queries and behaviors, thus resulting in better conversion rates and lower CAC.

19. Are there any common mistakes or pitfalls that can lead to higher than expected CAC for an app?


1. Ineffective targeting: Not understanding your target audience properly can lead to higher CAC as you may end up spending money on reaching users who are not interested in your app.

2. Lack of user engagement: If your app doesn’t provide value or does not keep users engaged, they may uninstall it after using it once, resulting in a high CAC.

3. Poor app design or functionality: A poorly designed or buggy app can result in negative reviews and lower retention rates, which can increase your CAC as you need to constantly acquire new users.

4. Ignoring time and resource management: Launching an app too quickly without proper testing and quality assurance can lead to increased CAC due to potential bugs and user dissatisfaction.

5. Wrong marketing strategy: Not utilizing the right channels or promoting your app in the wrong way can lead to low conversion rates and ultimately increase your CAC.

6. Inaccurate budget allocation: A lack of careful planning and budget allocation for marketing activities can result in overspending on less effective channels, increasing overall CAC.

7. Not tracking metrics effectively: Without proper tracking and monitoring of campaign metrics, it is difficult to optimize efforts and identify areas for improvement which can result in higher than expected CAC.

8. Overlooking organic growth opportunities: Focusing solely on paid acquisition strategies without leveraging other avenues for growth such as SEO, referrals, or partnerships can lead to higher costs for acquiring users.

9. Failure to adapt to changing market trends: Not keeping up with the latest industry trends and user preferences may result in a decrease in interest towards your app, leading to decreased conversions and higher CAC.

10. Inadequate retention strategies: Without a proper retention strategy, you may lose valuable customers who could have continued using your app, resulting in higher costs for acquiring new ones.

20.Explain how lifetime value (LTV) can factor into the calculation of CAC for a mobile app.


Lifetime value (LTV) measures the total revenue a customer generates for a company over the entire course of their relationship. In the context of a mobile app, LTV represents the estimated revenue that a user will generate from in-app purchases, subscription fees, and other monetization methods.

For any business, it is important to acquire new customers at a cost that is lower than their lifetime value. This is where customer acquisition cost (CAC) comes into play. CAC measures the amount of money that a company spends on marketing and sales to acquire each new customer.

In terms of a mobile app, calculating CAC can be more complex due to different methods of engagement and monetization. However, LTV can provide some insight into how much companies should be willing to spend on acquiring new users for their mobile app.

For example, if the LTV of a user is $20 and your CAC is $10, then it may be worth investing in acquiring more users as they are likely to generate more revenue for your app. On the other hand, if your CAC is higher than your LTV, it may be necessary to reevaluate your marketing strategies or adjust your pricing in order to increase the ROI on your user acquisition efforts.

In addition, considering LTV when calculating CAC for a mobile app allows companies to have a long-term perspective on their marketing efforts rather than just focusing on short-term profits. It also helps in making informed decisions regarding budget allocation for different marketing channels based on which channels bring in users with higher LTVs.

Overall, incorporating LTV into the calculation of CAC for a mobile app can help businesses better understand the true cost of acquiring customers and make strategic decisions for sustainable growth.

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