LTV/CAC

Clement Vouillon

Twitter icon

LTV/CAC

Another very commonly used ratio is the LTV / CAC one. LTV stands for Life Time Value and CAC for Customer Acquisition Cost.

VCs expect that a customer generates at least 3 times what it cost you to acquire him (it’s a minimum).

As you can see on the diagram below, this ratio mixes many aspects from sales and marketing efficiency to your ability to keep users (linked to product quality and customer support). As a consequence there are many ways to optimize this ratio and just looking at the “raw result” won’t give you much insights.

Most relevant during:

Most relevant for:

Subscribe to the upcoming newsletter

The best new Sales and GTM content delivered to you twice a month