LTV:CAC Ratio

LTV:CAC divides a customer's lifetime value (total revenue they're expected to generate) by the cost to acquire them. A commonly cited healthy benchmark is 3:1 or higher — a customer worth three times what it cost to acquire them — though the right ratio varies by business model and margin structure.

This ratio is a more complete efficiency signal than CAC or LTV alone, since it directly answers "is this spend worth it" rather than looking at either side in isolation. It's the specific metric Directive Consulting's Customer Generation methodology is built around, in contrast to agencies that report only on lead volume or traffic.

Central to our Directive Consulting review, and referenced in our AI SEO Agencies category hub as one criterion separating pipeline-focused agencies from traffic-focused ones.