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Answers to Frequently Asked Questions about Marketing % Of Customer Acquisition Cost
LTV is a (Revenue the customer pays in a period – gross margin) ÷ Estimated churn percentage for that customer
The higher the LTV:CAC, the more ROI your sales and marketing team is delivering to your bottom line. However, you don’t want this ratio to be too high, as you should always be investing in reaching new customers. Spending more on sales and marketing will reduce your LTV:CAC ratio, but could help speed up your total company growth.