How does CAC relate to LTV?

A healthy business typically has a Customer Lifetime Value (LTV) at least 3 times its CAC, ensuring long-term profitability per customer.

Customer Acquisition Cost (CAC) Calculator

Customer Acquisition Cost (CAC) divides total sales and marketing spend by the number of new customers acquired in a period.

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Formula

CAC = Total Sales & Marketing Spend / New Customers Acquired

Customer Acquisition Cost and the 3:1 LTV Rule

How customer acquisition cost is calculated, and why the common '3x CAC' rule of thumb exists.

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