Glossary · Product
What is
LTV:CAC?
The ratio of customer lifetime value to customer acquisition cost — a core SaaS health metric.
By Anish· Founder · Vedwix
·Definition
LTV:CAC measures the unit economics of acquiring a customer. A ratio above 3:1 is generally considered healthy for SaaS — you earn 3x what you spent to acquire. Below 1:1 means you're losing money on every customer. Both numbers should be calculated honestly: include real CAC (everything spent on acquisition) and net LTV (after churn, refunds, and gross-margin discount).
Example
A SaaS with $400 CAC and $2,400 LTV has a 6:1 ratio — strong unit economics.
How Vedwix uses LTV:CAC in client work
We model LTV:CAC for any growth engagement before committing to channels.
Building with LTV:CAC?
We ship this.
If you're building with LTV:CAC in production, we can help — from architecture review to full implementation.
Brief us