LTV : CAC Ratio
Check whether each customer you acquire actually pays off.
LTV : CAC RATIO
6.0 : 1
Underspending — you could grow faster
A 3:1 ratio is the healthy benchmark. Below 1:1 you lose money per customer; above 5:1 you may be under-investing in growth.
What is LTV : CAC Ratio?
The LTV:CAC ratio compares how much a customer is worth (LTV) with how much it costs to acquire them (CAC). It's the clearest single test of whether your growth is profitable and sustainable.
LTV : CAC = customer lifetime value ÷ acquisition cost
How to read your result
- 3:1 is the widely cited healthy benchmark.
- Below 1:1 you lose money on every customer you acquire.
- Above 5:1 you may be under-investing — you could likely grow faster by spending more.
- Also watch CAC payback: how many months of revenue it takes to recover the acquisition cost.
Frequently asked questions
What is a good LTV:CAC ratio?
Around 3:1 is considered healthy for most SaaS businesses. Much lower means acquisition isn't paying off; much higher can mean you're under-spending on growth.
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