How to read these numbers
Most marketing reports show ROAS and stop there. On its own it can't tell you whether you made money, because it ignores what it costs you to deliver the product.
ROAS — return on ad spend
Revenue divided by ad spend. A 4x ROAS means every euro of ad spend brought back four euros of revenue — revenue, not profit.
Break-even ROAS
Your break-even ROAS is one divided by your gross margin. At a 60% margin you break even at 1.67x, so a 2x campaign is genuinely profitable. At a 25% margin you need 4x just to stand still — and a 3x ROAS that looks great in a report is quietly losing money.
CAC — customer acquisition cost
Spend divided by new customers. Use only first-time buyers: counting repeat orders flatters the number and hides the real cost of growth.
LTV:CAC — the ratio that decides everything
Lifetime value divided by acquisition cost. It answers the only question that matters over time: does a customer bring back more than they cost to win?
What counts as a good LTV:CAC ratio
| Ratio | What it means |
|---|---|
| Below 1:1 | Every new customer costs more than they will ever bring back. Growing makes the hole deeper. |
| 1:1 – 3:1 | Working, but thin. There's little left over for salaries, tools and overheads. |
| 3:1 – 5:1 | The healthy zone. Acquisition pays for itself with room to reinvest. |
| Above 5:1 | Usually underspending. You could buy more growth at this efficiency and are choosing not to. |
These are starting points, not laws. A business with monthly subscriptions and near-zero delivery cost lives comfortably at ratios that would be alarming for one holding physical stock.
Common questions
What's a good ROAS?
There isn't one. A good ROAS is any number above your break-even ROAS, and that depends entirely on your margin. Anyone quoting a universal target is guessing about your business.
Should I use blended or paid-only CAC?
Both, for different jobs. Paid CAC tells you whether a channel is working. Blended CAC — total acquisition spend over total new customers — tells you whether the business is working. Reporting only the flattering one is the most common way marketing reports mislead.
How long should CAC payback take?
Under 12 months for most subscription businesses, and inside the first order for anything sold once. If it takes longer, growth is funded out of your cash reserves rather than out of your customers.
Is my data stored anywhere?
No. This page is a static file with no backend. Every figure you type stays in your browser and disappears when you close the tab.