Businesssaas
LTV to CAC Ratio Calculator
The ratio of what a customer is worth to what they cost to acquire. Three times is the conventional floor; much above five usually means underspending rather than efficiency.
Also called: ltv to cac ratio, unit economics ratio.
LTV : CAC
4
4×: In the conventional healthy band of 3 to 5.
What that means
In the conventional healthy band of 3 to 5.
CAC as a share of LTV
25%
Method and background
How this is calculated
Lifetime value divided by acquisition cost, both computed on the same basis. Gross profit, not revenue, or the ratio flatters itself by the margin. Below 1 you lose money on every customer. Around 3 is the usual target. Well above 5 more often signals that growth spend is being left on the table than that the business is unusually efficient.
ratio = ltv / cac- LTV
- Gross-profit lifetime value (currency)
- CAC
- Fully-loaded acquisition cost (currency)