How do you calculate LTV to CAC Ratio?

LTV:CAC = customer lifetime value ÷ customer acquisition cost. The SQL example on this page shows the same calculation against a simple table.

What commonly goes wrong when calculating LTV to CAC Ratio?

Both inputs are estimates; the ratio inherits all their errors.

How to calculate LTV to CAC Ratio

The LTV to CAC ratio compares what a customer is worth over their lifetime with what it costs to acquire them.

Formula

LTV:CAC = customer lifetime value ÷ customer acquisition cost

SQL query

This example assumes: a segment table: segment_metrics(segment, ltv, cac) built from your LTV and CAC queries. It is written in PostgreSQL syntax; date functions differ slightly in MySQL, BigQuery and SQLite, and your column names will differ from these.

SELECT segment,
       ltv,
       cac,
       ltv / NULLIF(cac, 0) AS ltv_to_cac
FROM segment_metrics
ORDER BY ltv_to_cac DESC;

Common mistakes that make LTV to CAC Ratio wrong

Both inputs are estimates; the ratio inherits all their errors.
Use the same segmentation and period for both numbers.
A high ratio can mean you under-invest in growth; read it with payback period.

Ask for LTV to CAC Ratio in plain English

Instead of writing the query yourself, you can type the question. SchemaChat turns it into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. It does not replace your judgement about the definition: check that the query matches the formula your business uses.

What is our LTV to CAC ratio by acquisition channel?
Which segments have an LTV to CAC ratio below 3?

How to calculate LTV to CAC Ratio

Formula

SQL query

Common mistakes that make LTV to CAC Ratio wrong

Ask for LTV to CAC Ratio in plain English

Frequently asked questions