Evaluating Your LTV:CAC Ratio

The LTV:CAC ratio compares the lifetime gross revenue or profit a customer generates against the cost required to acquire them. It tells you whether you are overpaying for traffic, operating at a loss, or positioned to scale ad campaigns aggressively.

LTV:CAC Ratio = Customer Lifetime Value (LTV) ÷ Customer Acquisition Cost (CAC)

Funnel Efficiency Assessment

Your LTV:CAC Ratio:

0.0 : 1

Customer Lifetime Value (LTV): $0.00

Customer Acquisition Cost (CAC): $0.00

Net Lifetime Contribution per Customer: $0.00

Industry Standard Benchmarks

Ratio	Status	Recommended Action
< 1.0 : 1	Severe Loss	Acquisition cost exceeds customer value. Pause ads and repair conversions.
1.0 : 1 – 2.0 : 1	Marginal	Little cash flow margin. Boost order values, upsells, and retention.
3.0 : 1	Gold Standard	Optimal balance of profitability and sustainable scale.
> 5.0 : 1	Under-investing	Highly profitable, but you can afford to bid higher and scale faster.