LTV:CAC ratio
DefinitionGrowth
LTV:CAC ratio
Lifetime value divided by acquisition cost - the core unit economic in any board pack. A ratio around 3:1 is the conventional health line for subscription businesses; below it, growth spends more than customers return. Strong brands improve the ratio from both ends: cheaper acquisition, higher retention and pricing.
Evidence from the library
Brand creates value through cheaper acquisition, more value per customer, and a moatPrinciple3.21% vs 4.43%Connected TV now delivers roughly three quarters of Linear TV's long-term brand effectStatJudging channels on six-month activation gives the opposite verdict to judging them on long-term business effects - brand TV looks weak short-term but strong long-term, DRTV the reverse.Warning21% vs 10.9%Challenger brands convert loyalty into profit more reliably than penetrationStat3.35 vs 3.27Creator ads have overtaken linear TV as the channel with the highest long-term multiplierStat
Source
Marketing Definitions
standard SaaS and subscription benchmarking convention
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