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What is a good customer lifetime value?

Asked 3 years ago

Apparently, your customer lifetime value is related to your customer acquisition cost (CAC). What is a good ratio for an eCommerce business to have?

Customer lifetime value Cost of acquisition Customer acquisition cost (cac)Customer lifetime value

+1

Abeeha Qasmi

Tuesday, October 12, 2021

The ratio between customer lifetime value (LTV) and customer acquisition cost (CAC) is a vital e-commerce metric, especially for subscription-based companies.
3:1 is the ideal ratio between LTV and CAC. If you get a ratio of 1:1 ratio means your spending is huge. Whereas the 5:1 ratio means your spending isn't sufficient. Both percentages aren't suitable to excel in a business and indicates that you need to work on your strategy.

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