Digital Marketing & Analytics
Intermediate

LTV-to-CAC Ratio

Compares customer value against acquisition cost to assess marketing efficiency.

Formula

Ratio=LTVCAC\text{Ratio} = \frac{LTV}{CAC}

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Variables

LTVCustomer lifetime value
CACCustomer acquisition cost

Example

LTV = $900, CAC = $300 → Ratio = 3:1

Did You Know?

A ratio below 1:1 means you're losing money on every customer — a clear signal to rethink the funnel.

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