Customer Analytics
LTV:CAC Ratio
The ratio of customer lifetime value to acquisition cost. A ratio of 3:1 or higher is considered healthy.
Formula
LTV:CAC Ratio = Customer Lifetime Value / Customer Acquisition CostWhat is the LTV:CAC Ratio?
The LTV:CAC ratio compares how much a customer is worth to how much it costs to acquire them. It's the single best indicator of sustainable business growth.
Benchmarks
- Below 1:1: You're losing money on every customer
- 1:1 to 3:1: Business is viable but vulnerable
- 3:1 to 5:1: Healthy and sustainable
- Above 5:1: You might be under-investing in growth
Example
LTV: $450. CAC: $120. LTV:CAC = 3.75:1 — healthy.
Stop guessing. Start tracking.
Shopimize calculates your true e-commerce profit in real time.
Try Shopimize free →