Retention is the New Acquisition: Why CAC is Outdated

Obsessing over customer acquisition while ignoring retention is like filling a bucket with a hole in the bottom.

The Math of Retention

Let's say: - CAC: $1,000 - Monthly revenue per customer: $100 - Churn rate: 10% per month

At 10% churn, your average customer lifespan is 10 months.

Now imagine you improve retention to 2% monthly churn - your average customer lifespan becomes 50 months, and their total value increases 5x.

That's the power of retention.