The LTV:CAC ratio is a metric that measures the profitability of a customer over the lifetime of their relationship with a company.
It is calculated by dividing the customer’s lifetime value by the cost of acquiring that customer.
This metric is important for small businesses because it helps them to determine how much they can afford to spend on marketing in order to acquire new customers.
A high LTV:CAC ratio means that a company is making a good return on its investment in marketing, while a low LTV:CAC ratio means that the company is not getting a good return on its investment.
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