LTV:CAC Ratio
Category: E-commerce
Also searched as: LTV CAC
Definition (plain English)
A comparison of estimated customer lifetime value with the cost to acquire that customer.
Why it matters commercially
It helps decide whether marketing spend, sampling, discounts, and channel investment are sustainable after real product and fulfillment costs.
Example
A subscription importer required a 3:1 LTV:CAC ratio before expanding paid acquisition for a new product line.
Common mistake
Calculating the ratio from revenue LTV and ad-only CAC, which hides margin, returns, discounts, and servicing cost.
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