Customer Acquisition Costs, Lifetime Value, and LTV:CAC Ratio

Everything you need to know to help calculate, visualize, and distribute your Customer Acquisition Costs (CAC), Customer Lifetime Value (LTV), and LTV:CAC Ratio.

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Customer Acquisition Costs

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.

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 to the right:

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

Check Out Our Google Sheets Template

A free Google Sheets template to help calculate and project your Customer Acquisition Costs, Customer Lifetime Value, and LTV:CAC Ratio.
Check it Out