Customer economics

LTV to CAC

Lifetime value divided by acquisition cost — the return on each dollar spent winning a customer. Three is the usual healthy line.

Owned by: Senior sales analystTest band: Senior sales analyst

The formula

LTV:CAC = LTV ÷ CAC

By segment and by channel. A 4:1 blended ratio can hide a 1:1 channel that is burning money next to a 7:1 one that deserves the budget.

Blended LTV:CAC is 4:1. Split by channel it is 7:1 for inbound and 1:1 for outbound. The action is…