Pick one metric to guide your ad spend: the gap between Customer Acquisition Cost and Customer Lifetime Value. When that gap is positive, scale up. When it's negative, stop. LTV can grow while CAC has limits, so focus on widening the gap to drive profit.
What's the most important marketing data to collect? It's a tough question, considering all the conflicting metrics out there. I like to focus on what I call the North Star metric. If it's in the green, we scale up, invest more. If not, we stop. Our top metric? The gap between customer acquisition cost and lifetime value. The former has a floor, the latter doesn't. It's easier to increase customer value. So we work from profitability to cost per click, but our North Star metric remains widening that gap for more profits.
