LTV to CAC Ratio
What is LTV to CAC Ratio?
LTV to CAC Ratio compares customer lifetime value against customer acquisition cost to evaluate acquisition efficiency.
Also known as: LTV/CAC, LTV:CAC
LTV to CAC Ratio Formula
LTV:CAC Ratio = LTV / CAC | Variable | Meaning |
|---|---|
CAC | Customer acquisition cost. |
LTV | Customer lifetime value. |
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How to Calculate LTV to CAC Ratio
Worked example
- LTV
- $30,000
- CAC
- $5,000
- → LTV:CAC Ratio
- 6
LTV to CAC Ratio Calculator
LTV:CAC Ratio = LTV / CAC | Variable | Meaning |
|---|---|
CAC | Customer acquisition cost. |
LTV | Customer lifetime value. |
Worked example
- LTV
- $30,000
- CAC
- $5,000
- → LTV:CAC Ratio
- 6
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LTV to CAC Ratio Benchmarks
| Segment | Level | Benchmark |
|---|---|---|
| general | good | 3 x |
| general | great | 6 x |
LTV to CAC Ratio vs Related Metrics
- LTV to CAC Ratio vs CAC Payback Period — how the two differ and when each matters.
- LTV to CAC Ratio vs ARPA — how the two differ and when each matters.
- LTV to CAC Ratio vs Customer Churn — how the two differ and when each matters.
- LTV to CAC Ratio vs Total Marketing Spend — how the two differ and when each matters.
- LTV to CAC Ratio vs Overall Marketing KPIs — how the two differ and when each matters.
- LTV to CAC Ratio vs MRR — how the two differ and when each matters.