Customer Lifetime Value to Acquisition Cost Ratio (LTV:CAC)

Ratio of total customer lifetime value to customer acquisition cost

SalesMarketingCustomer SuccessSaaS / SoftwareE-commerce / RetailRatioQuarterly

FORMULA

LTV:CAC Ratio = Customer Lifetime Value / Customer Acquisition Cost

What is Customer Lifetime Value to Acquisition Cost Ratio?

Unit economics benchmark. Ratio >3:1 is healthy, >5:1 is excellent. Measures return on acquisition investment. SaaS benchmark is 3-5:1. Lower ratios indicate need for better retention or higher pricing.

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ltvcacratio