LTV/CAC Ratio = Average Lifetime Value (net) / Average Customer Acquisition Cost. For example: $45 LTV / $12 CAC = 3.75x. Always use net LTV (after platform fees) for accuracy. Segment by channel: ASA LTV/CAC = $45 / $9 = 5.0x. Facebook LTV/CAC = $45 / $18 = 2.5x.
3:1 is the commonly cited benchmark: for every $1 spent acquiring a user, you earn $3 in lifetime value. Below 2:1 is concerning (not enough margin for overhead and profit). Above 5:1 might mean you are under-investing in growth and leaving market share on the table. The sweet spot for growth-stage apps is 3:1 to 4:1.
Calculate channel-specific CAC (channel spend / channel subscribers) and channel-specific LTV (average lifetime revenue of users from that channel). Channels often have very different ratios — organic users typically have the best LTV/CAC (infinite, since CAC is ~$0), while some paid channels may be sub-2:1. Botsi helps track LTV by user cohort and source.
Three reasons: 1) LTV is a projection, not a guarantee — if retention deteriorates, your actual LTV will be lower than predicted. 2) It ignores payback period — a 4:1 ratio is useless if it takes 3 years to realize. 3) It hides cash flow dynamics — you spend CAC today but collect LTV over months/years. Always pair LTV/CAC with payback period analysis.
A messaging strategy that targets users at key moments in their journey - from onboarding and trial to renewal and reactivation. Channels like email, push notifications, and in-app messages are orchestrated around behavioral triggers to drive higher conversion and retention.
The total revenue a user is expected to generate over the entire duration of their relationship with your app. LTV is a foundational metric for forecasting revenue, setting CAC targets, and evaluating the long-term impact of product or pricing decisions.
The process of adapting your app's content, pricing, messaging, and visuals for different languages, regions, or cultural norms. Effective localization improves global conversion rates, user trust, and long-term retention in international markets.
User interactions that originate from lock screen surfaces - such as notifications, widgets, or Live Activities - without launching the full app. These lightweight touchpoints help boost engagement, reinforce habits, and improve retention with minimal friction.
The percentage of users who remain active and/or subscribed after extended periods (e.g., day 30, day 90, or day 180). Particularly important for subscription apps with annual plans or freemium models where monetization happens later in the user lifecycle.
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