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Customer Acquisition Cost and Lifetime Value

Customer Acquisition Costs (CAC)

Description 
Sales and marketing costs to acquire a customer.

CAC = Cost of Sales & Marketing / New Customers

How to track CAC in Visible

  • ChartMogul – Connect to ChartMogul and report on your recurring revenue movements, customer data and more.
  • Xero – Over 1.2 Million businesses use Xero to power their cloud accounting.
  • Quickbooks – Over 4.8 million businesses use Quickbooks to power their cloud accounting.
  • Via Google Sheets or Zapier 

You can also track CAC using our formula builder. An example of the formula within Visible is below:

CAC Formula


Customer Lifetime Value (LTV)

Description
A prediction of the net profit attributed to the entire future relationship with a customer.

LTV = (Average Customer Revenue x Gross Margin %) / Customer Churn Rate

How to track LTV in Visible

  • ChartMogul – Connect to ChartMogul and report on your recurring revenue movements, customer data and more.
  • Xero – Over 1.2 Million businesses use Xero to power their cloud accounting.
  • Quickbooks – Over 4.8 million businesses use Quickbooks to power their cloud accounting.
  • Via Google Sheets or Zapier 

You can also track LTV using our formula builder. An example of the formula within Visible is below:

LTV Formula


LTV:CAC Ratio

Description
Measures the cost of acquiring a customer to the lifetime value. An ideal LTV:CAC ratio is 3 (your customer’s lifetime value should be 3x the cost to acquire them).

LTV:CAC = Customer Lifetime Value / Customer Acquisition Costs

How to create and track your LTV:CAC Ratio in Visible:

You can also track LTV:CAC using our formula builder. An example of the formula within Visible is below:

LTV:CAC Ratio

Popular resources for CAC & LTV: 

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