Glossary
LTV:CAC Ratio
The LTV:CAC ratio compares customer lifetime value to customer acquisition cost. A ratio around 3:1, meaning each customer is worth about three times what it costs to acquire them, is widely considered healthy.
A ratio below 1:1 means you lose money on every customer. Around 3:1 is a common target for sustainable growth, while a much higher ratio can signal you are underinvesting in acquisition and leaving growth on the table.
Because it links spend to long-term value, the LTV:CAC ratio is one of the best single indicators of whether a growth engine is working.
Struggling with this in your own business? See how we help you reduce customer acquisition cost.