Also known as:LTV:CAC, LTV/CAC, Unit Economics Ratio
What is LTV:CAC: LTV to CAC Ratio?
The LTV:CAC ratio compares the lifetime value (LTV) a client generates against the customer acquisition cost (CAC) spent to win them. It is the single clearest measure of whether a partner's marketing turns ad spend into profit, expressed as a ratio such as 3:1.
Lifetime value is the total commission you expect from a client across their whole trading relationship; acquisition cost is everything you spent to acquire them — ad budget, tools, and any content costs divided by clients acquired. Dividing one by the other tells you how many dollars of value each dollar of acquisition buys.
Key takeaways
3:1 is the common healthy benchmark; below 1:1 the channel loses money.
A ratio above ~6:1 often means you're under-spending on acquisition.
Always compute on an LTV basis, not day-one ROAS.
Track per channel — a blended ratio hides weak sources.
Re-check whenever payout terms or ad costs change.
A widely used benchmark is 3:1: for every $100 spent acquiring clients you earn about $300 in lifetime commission. Around 1:1 the business breaks even before overhead and is effectively losing money; below 1:1 the channel is destroying value. A very high ratio such as 6:1 usually signals under-investment — you could profitably spend more to grow faster.
Because forex commission is earned over months, the ratio must be read on an LTV basis, not day-one return. A campaign that looks unprofitable on the first deposit can be strongly positive once six months of rebates are counted, so pausing on day-one ROAS alone is a classic mistake.
How it works
You calculate LTV per client from your commission data — average revenue per client multiplied by their expected lifespan — and CAC by dividing total acquisition spend over a period by the number of clients that spend produced. The ratio is LTV divided by CAC.
Partners track it per channel and per campaign, because a blended ratio can hide a losing source. Paid search might run at 2:1 while a content channel runs at 8:1; the ratio tells you to shift budget toward the efficient channel and repair or cut the weak one.
Because both inputs move over time — payout rates change, spreads tighten, ad costs rise — the ratio is monitored as a trend, not a one-off number, and revisited whenever CPA/RevShare terms or ad prices shift.
1
Measure LTV per client
From your commission history, compute average revenue per client and multiply by expected active lifespan to get lifetime value.
2
Measure CAC per client
Add all acquisition spend (ads, tools, content) for a period and divide by the number of funded clients it produced.
3
Divide LTV by CAC
Express the result as a ratio, e.g. $600 LTV ÷ $200 CAC = 3:1.
4
Segment by channel
Repeat per traffic source and campaign so a strong blended number can't hide a value-destroying channel.
5
Act on the number
Scale spend where the ratio is healthy (≥3:1), and fix targeting, creative, or retention where it approaches 1:1.
Why it matters for partnership: LTV:CAC is the health metric for a partner's paid-marketing engine. Above ~3:1 you can scale spend confidently; near 1:1 you're burning money and must fix targeting or retention. It tells you when to push budget and when to stop.
Formula
LTV:CAC = Average Lifetime Value per Client / Customer Acquisition Cost per Client
Real World Example
Take an affiliate whose funded clients average $600 in RevShare over their lifetime and who spends $200 in Google and Meta ads to acquire each one. That is a 3:1 ratio — healthy enough to scale. If ad costs rise and CAC climbs to $550, the ratio falls near 1:1 and the partner must tighten targeting or lift retention before adding budget.
Reading the LTV:CAC ratio
Ratio
What it means
Action
Below 1:1
You spend more than clients return
Pause and fix targeting/retention
≈ 1:1 to 2:1
Thin or break-even margin
Improve conversion and LTV before scaling
≈ 3:1
Healthy, sustainable economics
Scale spend with confidence
6:1 and up
Likely under-investing
Increase budget to capture more share
Pro Tip
If your ratio sits at 6:1 or higher you're probably leaving growth on the table — increase acquisition spend to capture share while economics are favourable.
Common Pitfalls
Judging campaigns on day-one CPA instead of full LTV, which makes you pause ad campaigns that would have become highly profitable over a six-month payout horizon.
FAQ
What is a good LTV:CAC ratio?
Around 3:1 is the widely cited healthy target — roughly $3 of lifetime value for every $1 of acquisition cost. Below 1:1 the channel is losing money.
Why can a high ratio be a problem?
A ratio of 6:1 or more usually means you are being too cautious with spend. You could profitably acquire more clients and grow faster while the economics stay favourable.
How is it different from ROAS?
ROAS measures revenue against spend over a short window, often day one. LTV:CAC uses the client's full lifetime commission, so it captures value that ROAS misses in a delayed-payout model.
How often should I recalculate it?
Whenever payout terms, spreads, or ad costs change, and at least monthly. Both LTV and CAC drift over time, so treat the ratio as a trend rather than a fixed figure.
Should I track it per channel?
Yes. A healthy blended ratio can hide a channel running below 1:1, so segment by traffic source and campaign to see where value is actually created.
Does it guarantee my campaign will be profitable?
No metric guarantees an outcome. LTV:CAC is a decision aid based on historical averages; future results depend on client behaviour and market conditions, which vary.
A durable, operator-grade framework for comparing forex broker affiliate programs by commission model, qualification rules, payout terms, and regulation — matched to your IB business.
A practical breakdown of how signal and copy-trading providers monetize through broker revenue share, member subscriptions, or both — and how to structure a hybrid model …
RevShare percentages mean nothing without the spread and mark-up they're calculated against. Here's how to model the real payout and lifetime value behind any RevShare offer.
