LTV:CAC Ratio

LTV:CAC ratio compares what a customer is worth over their lifetime to what it cost to acquire them. A commonly cited benchmark is 3:1 or higher, though the right target varies by business model, growth stage, and how much of that value arrives quickly versus slowly.

A very high ratio (10:1 or more) isn't automatically a good sign either — it can indicate underinvestment in growth, since the company could likely spend more on acquisition and still turn a healthy return.