This is pretty good; you have all the necessary info. But it’s hard to follow and confusing, because you’ve taken out too much of the explanation. And frankly, the explanation in the blog was already tricky to follow.
Here’s what the reader needs to know:
- For example, over a 3-month period, your revenue and costs might look like this:
(that explains the table, which currently appears with no introduction) - But if you offer a free trial, this complicates your calculation, because there’s a significant delay between the costs and your customer acquisition. You’ll need to offset your calculation to allow for the delay.
- For example, if the average conversion from free trial to customer takes 30 days, you need to use the previous month’s acquisition costs in your CAC calculation instead. So you’d take February’s acquisition costs and March’s customer acquisitions to calculate March’s CAC:
CAC for March = costs in Feb / acquisitions in March = 33000 / 1100 = $33 - If, however, you offer a fixed free trial of 14 days, you need to essentially apply half of this month’s costs and half of last month’s costs:
(calculation you already included)