October 24, 2025
It feels like every e-commerce brand has a subscription you can sign up for, which to a customer can seem annoying, but from a brand’s perspective there is a practical reason. Subscribers on most businesses are 3.5x as profitable because of their lifetime value. Additionally, they provide predictable monthly revenue..
How much to pay for a subscriber is totally dependent on these factors:
If your revenue is healthy and your profitability is managed, the industry best practice is to pay acquisition costs equivalent to a number between your 6-month LTV and up to your 12 month LTV, on a new customer.
If there isn’t a ton of revenue coming in and profitability is tight, the less availability you have to optimize to a 6-month+ LTV CAC goal. In that case, you can likely acquire a customer with the goal of being break-even on first purchase or possibly stretch this out to a 3-month LTV.his may come with less ability to scale acquisition for new high-quality subscription customers.
If you aren’t sure where you sit profitability wise for calculating your ideal CAC, you can download our FREE guide here, which will help you determine where you stand
All you have to do is input your current CAC from the past month and the amount of revenue you drove as a business. Then add the new customer and return customer revenue from that previous month to determine your net profit. If net profit is around 20% or higher, you are in a solid place to start looking at a longer LTV to CAC ratio.
The last piece to consider is making sure that you are getting at least 3 purchasers or more on average from every subscriber. If you are seeing high churn, this is a sign that you aren’t acquiring high-quality customers and should consider a more conservative CAC goal.
If you want to determine your CAC goals for your subscription business and attract high- quality customers, download our FREE Know Your Numbers sheet today!
See all
