Logo Launch IT (Fast)
GLOSSARY

CAC:LTV ratio

“

The Customer Acquisition Cost to Lifetime Value ratio is a metric used to assess the efficiency of your marketing efforts. It compares the cost of acquiring a customer to the revenue that customer generates over their lifetime.

CAC:LTV Ratio for Startups

The Customer Acquisition Cost to Lifetime Value ratio is a key metric for startups. It measures how much it costs to acquire a customer compared to the revenue that customer brings over their lifetime.

  • Why it matters: Helps assess marketing ROI and long-term customer value.
  • Example: If your CAC is $50 and LTV is $500, the ratio is 1:10, indicating a healthy return on investment.
  • Related concepts: Customer retention churn rate, payback period.

Share this term

Browse All Terms

Related Terms

A/B testing

A

A/B testing is a method where two versions (A and B) of a webpage or app are compared to see which performs better in achieving a specific goal, helping you make data-driven decisions.

API (Application Programming Interface)

A

An API (Application Programming Interface) is a set of rules and protocols that allows different software applications to communicate with each other.

ARPU (Average Revenue Per User)

A

ARPU (Average Revenue Per User) is a key metric that calculates the average revenue generated by each user of a product or service over a specific period.

ARR (Annual Recurring Revenue)

A

Annual Recurring Revenue (ARR) is the predictable, annual revenue generated from subscription-based products or services.

Affiliate marketing

A

Affiliate marketing is a performance-based marketing strategy where a company rewards affiliates for driving traffic or sales through their marketing efforts.

Agile development

A

Agile development is a software development approach that emphasizes flexibility, collaboration, and iterative improvements.