Finding customers and growing
CAC and LTV
CAC, short for customer acquisition cost, is what you spend to win one customer, and LTV, short for lifetime value, is what that customer pays you while they stay; putting the two side by side shows whether a customer pays back what it cost to win them.
Also called customer acquisition cost, customer lifetime value, lifetime value, CAC, LTV
Looking this up for a class, a job, or something you want to build? If it is the last one, nommi reads your idea before you spend months on it.
CAC counts ads, tools and paid help. LTV is built from how long customers stay, so it is only as good as your churn number, the share of customers who cancel each month. If a customer costs more to win than they bring in, faster growth only loses more money.
At a glance
| CAC | LTV | |
|---|---|---|
| What it measures | What you spend to win one customer | What that customer pays you while they stay |
| Built from | Ads, tools and paid help | How long customers stay, so your churn number |
| Should be | The smaller of the two | The bigger of the two |
What recent High Alpha data says
In High Alpha's 2025 survey, SaaS companies that won back their CAC fast and kept their customers grew at a median 71%, against 10% for those slow on both.
- CAC paid back in under 10 months, net revenue retention (revenue kept from existing customers, upgrades included) above 106%: median growth 71%.
- CAC paid back in over 15 months, net revenue retention below 98%: median growth 10%.
Source: High Alpha, 2025 SaaS Benchmarks Report. More than 800 SaaS companies, 69% in the US, not all startups. A pattern, not proof that one causes the other. As of 5 November 2026.
When this shows up
Example, not a real founder: you run ads and win customers at what feels like a fair cost. Most of them cancel soon after. When you compare what each one paid with what it cost to win them, every new customer lost money.
What to do next
Add up last month's spend on winning customers and divide it by the new customers you got. Put that next to what an average customer has paid you so far.
Questions founders ask
What do CAC and LTV stand for? Customer acquisition cost and customer lifetime value. CAC is what you spend to win one paying customer, and LTV is what that customer pays you over their whole time with you.
Go deeper
How much should you charge for your app? A number with reasons
A suggested price, how sure it is, where your pricing leaks money and one test, or a note when it cannot price honestly.
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