The Lifetime Value to Customer Acquisition Cost Ratio (LTV:CAC) puts the value a customer creates and the costs incurred to acquire him into perspective.
The LTV : CAC Ratio enables you to stay on top of your marketing spending and adapt them if necessary.
Atlas | - |
Abbreviation | LTV:CAC |
Unit | Ratio |
Calculation
The average lifetime value of a customer divided by the customer acquisition cost gives the LTV:CAC Ratio.
LTV
÷ CAC
___________
LTV:CAC Ratio
The average lifetime value of a company's customer is 100 € their CAC amounts to 25 €.
100 €
÷ 25 €
______________
4:1 LTV:CAC Ratio