Improving the LTV : CAC ratio

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I have assumed the Current CAC to be ₹3000. With our comprehensive efforts, we aim to reduce the CAC by approximately 15%, which equates to ₹2550. Simultaneously, we will continue launching bundled packages, each with an average revenue of ₹8300. Here are the rough calculations, assuming a 7% conversion rate in the first month

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Step 1: Calculated Online LTV

• User spends ₹1400 over 3 months before churning

Step 2: Calculate Offline LTV

• User spends ₹2400 over 6 months before becoming inactive

Step 3: Calculate LTV for subscribers

• User spends roughly ₹8300 for one package (Average cost of all the packages)

Step 4: Determine the Weightage

• Online contribution: 5% of total business
• Offline contribution: 88% of total business
• Subscribers: 7% of total business

Step 5: Calculate Business LTV Using Weighted Average

• Business LTV = (₹1400 × 0.05) + (₹2400 × 0.88) + (₹8300 × 0.07)
• Business LTV = ₹70 (from online) + ₹2280 (from offline) + 581 (from subscribers) = ₹2763

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LTV : CAC Ratio → 1.08 : 1 , This signifies that the business is on the right track on the road towards profitability

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