marketing and acquisition costs

What is the Role of Lifetime Value (LTV) in Assessing CAC?

Lifetime Value (LTV) is a metric that estimates the total revenue a business can expect from a single customer over the duration of their relationship. Comparing LTV to CAC helps determine the efficiency of your acquisition efforts. Ideally, the LTV should be significantly higher than the CAC to ensure profitability.
Rule of thumb: Aim for an LTV to CAC ratio of at least 3:1.

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