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 average lifetime value of a customer divided by the customer acquisition cost gives the LTV:CAC Ratio.
The average lifetime value of a company's customer is 100 € their CAC amounts to 25 €.
÷ 25 €
4:1 LTV:CAC Ratio