LTV:CAC Ratio

Lifetime Value to Customer Acquisition Cost Ratio

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Written by Ryan
Updated over a week ago

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

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