Strategy & growth tools for founders.

CAC stands for Customer Acquisition Cost. It is the exact amount of money you spend on marketing and ads to get just one new customer. If you spend Rs. 5,000 on ads and get 5 customers, your CAC is Rs. 1,000. If this number is higher than what a customer spends with you, your business is losing money.

LTV stands for Lifetime Value. It is the total amount of money a single customer will spend at your business over the entire time they buy from you. For example, if a client buys a Rs. 2,000 service from you 3 times a year, and stays with you for 2 years, their LTV is Rs. 12,000.

Ideally, your ratio should be 3:1 or higher. This means a customer should bring in at least 3 times more revenue than what it cost you to run ads to find them. If your ratio is lower (like 1:1 or 2:1), you are spending too much on marketing or your prices are too low.