Digital Marketing Glossary

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LTV:CAC Ratio

This compares a customer's lifetime value to the acquisition cost, indicating long-term value.

Formula: LTV:CAC = Customer Lifetime Value / Customer Acquisition Cost

Example: If the CAC is $50 and the LTV is $300, the LTV:CAC ratio is 6, meaning you're generating $6 of value for every $1 spent to acquire customers.

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