Customer Acquisition Cost and Lifetime Value
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. An example of the formula within Visible is below:
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 below:
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:
Popular resources for CAC & LTV:
- Who does LTV Matter? (Google Sheet Template for calculating CAC & LTV)
- Customer Lifetime Value — The Only Metric That Matters
- What Most Companies Miss About Customer Lifetime Value
