[brey]

unless I'm misunderstanding, isn't this double counting the costs? wouldn't the margin (revenue-costs / revenue) already take into account the cost of acquiring customers?

in their example, 52% margin and a $400 CAC:

  LTV/CAC = 0.25 years x $2160/year x 52% / $400 = 0.70x

[robzyb]

> wouldn't the margin (revenue-costs / revenue) already take into account the cost of acquiring customers?

Not necessarily. The word "margin" is very ambiguous because it could relate to many different types of margins.

In this case I think its safe to assume that "margin" meant the difference between the customer's price and the direct cost of supplying that particular unit of product, ignoring overheads.

[brey]

ah, yes, good point. if margin only includes cost of production, that's valid.