Slide 35Task 1Calculating CAC
Find the CAC
You are promoting a mobile app: an AI calorie tracker. To acquire users, you use Apple Search Ads.
Your task is to calculate the cost of acquiring one paying customer (CAC) based on the advertising funnel data.
Click-to-install conversion: 20%; cost per click (CPC): $0.50; install-to-registration conversion: 50%; registration-to-subscription conversion: 10%.
Slide 39Task 2Calculating LTV
Find the LTV
The app earns revenue from subscriptions and uses AI to process user requests, which creates additional costs.
Average subscription check: $10 per month. Retention rate: month 1: 100%; month 2: 60% of users continue their subscription; month 3: 40% of users continue their subscription.
After month 3, users stop renewing their subscription. The cost of one token for processing AI requests is $0.01. The average number of tokens a user spends per month is 200 tokens.
Over to youTask 3Break-even
John Peel's rolls per month
How many rolls a month must John Peel sell to earn £100?
Hint: cover the fixed £1,750, then the £100 profit, at £7 a roll.