How does LTV inform marketing spend?

A common rule of thumb is to keep customer acquisition cost (CAC) well below LTV, often at a 1:3 ratio or better.

Customer Lifetime Value Calculator

Customer Lifetime Value (LTV) estimates total revenue expected from a customer, based on average purchase value, purchase frequency, and customer lifespan.

Inputs

Results

Customer Lifetime Value: $600.00

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Formula

LTV = Avg Purchase Value × Purchase Frequency × Customer Lifespan

Learn How This Works

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.

Frequently Asked Questions

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