Jun 19 • 🏢 Management
What is LTV to CAC ratio?
LTV to CAC shows how much profit you make from a customer compared to what it cost to get them, and a high ratio means your business can grow fast and make money 🚀💰.
LTV (Lifetime Value) 💰
This is the money you keep after serving the customer.
It’s not all the money they pay you.
First, subtract your cost to deliver the product or service 🧾.
What’s left is your profit 📈.
Use that to grow the business 🚀 or take as income 🏦.
CAC (Customer Acquisition Cost) 🎯
This is what it costs to get one paying customer.
Add your ad spend 📣, marketing team pay 👥, and sales commissions 💼.
Then divide by how many customers you got ➗.
That’s your CAC.
LTV to CAC Ratio ⚖️
This shows how much profit one customer gives you for each dollar you spent to get them.
If the ratio is high 📊, your business works well.
It means your model makes money 💸.
You can grow fast if this number is strong 💪.
Big idea: 🧠
Understand this ratio.
Make it better.
That’s how you scale 🚀.
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What is LTV to CAC ratio?
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