---
title: "What LTV:CAC ratio should I target?"
summary: "Target LTV:CAC of 3:1 minimum, 5:1 for healthy unit economics. Above 7:1 usually means you should invest more in acquisition – you're under-spending and leaving growth on the table. Below 3:1 means the business is unprofitable per customer."
canonical: https://unlocksaas.com/answers/what-ltv-to-cac-ratio-should-i-target
updated: 2026-05-19
publisher: "Unlock SaaS"
author: "Maryan"
license: All rights reserved. Quotation with attribution permitted.
---

# What LTV:CAC ratio should I target?

> Target LTV:CAC of 3:1 minimum, 5:1 for healthy unit economics. Above 7:1 usually means you should invest more in acquisition – you're under-spending and leaving growth on the table. Below 3:1 means the business is unprofitable per customer.

## Supporting points

- LTV calculation should be cohort-based, not '1/churn'. Real churn curves are non-linear.
- CAC should include founder time, not just paid ad spend. Indie SaaS often under-counts CAC.
- Payback period under 12 months is healthy; under 6 months is excellent; over 18 months means funding acquisition out of capital, not cash flow.

## Related terms

- [Value Ladder](https://unlocksaas.com/glossary/value-ladder) – An ordered sequence of offers a customer can move through, each delivering more value than the last at a price proportional to the delivery.

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Contact: maryan@unlocksaas.com