Most businesses price their marketing against a single sale. This works out what a customer is worth across the whole relationship, and therefore the most you can afford to spend winning one.
Cumulative gross profit per customer, with the acquisition cost taken out at the start.
If a customer is worth one sale, your acquisition cost has to stay below the margin on that sale. If they are worth four years of repeat business, you can afford to outbid every competitor who is only counting the first one. That is usually the whole difference between two businesses in the same market.
The margin figure matters more than people expect. Revenue-based lifetime value flatters itself: what you can actually spend on marketing comes out of gross profit, not turnover.
A healthy ratio of lifetime value to acquisition cost is around three to one or better. Much higher than five and you are probably underinvesting in growth. Below two and you are buying customers you cannot afford.
Take the lifetime value above into the ROI calculator, or book a call and we will work through your real numbers together.