The four numbers every owner should know by heart
- CAC (customer acquisition cost) = (marketing spend + sales costs) ÷ new clients signed
- Gross margin = (what a client pays − what it costs to serve them) ÷ what a client pays
- LTV (lifetime value) = what a client pays you in total − what it costs to serve them
- LTV to CAC = LTV ÷ CAC. How many dollars come back for every dollar you spend to get a client.
Most owners can tell you their revenue. Far fewer can tell you what a new client costs them, or what that client is worth after the work is done. Revenue tells you how big the business is. These four numbers tell you whether growing it will make you money.
What a good LTV to CAC ratio looks like
A common rule of thumb is 3 to 1: every client should bring back at least three dollars of profit for every dollar it cost to win them.
- Below 1 to 1: you lose money on every new client. More marketing makes it worse.
- 1 to 1 up to 3 to 1: you make money, but not much room for mistakes, slow months or rising ad costs.
- 3 to 1 or better: healthy. You can afford to spend more to grow faster.
How to improve your numbers
There are only four levers, and the calculator shows you what each one is worth:
- Sign more clients from the same spend. Faster follow-up, more booked appointments, fewer no-shows. This lowers CAC without cutting marketing or sales.
- Raise your price. This raises LTV and gross margin at the same time.
- Lower your cost to serve. Better systems, templates and automation.
- Keep clients longer or bring them back for more work. This raises LTV.
How Scoreboardz keeps these numbers in front of you
A calculator gives you a snapshot once a month. Scoreboardz keeps the inputs live, every day:
- What you spend: Google Ads and Google LSA spend sync automatically. Fixed costs like agency retainers are spread across the month.
- New clients: they come from your GoHighLevel pipeline as deals move to won. No CRM? Your team can log them with one click, or we can set up a sales pipeline for you with the Scoreboardz + CRM plan.
- What clients pay: connect Stripe and payments show up as revenue on their own.
- The work behind it: calls, follow-ups, content and outreach, logged daily, so you can see which work produces clients.
It all sits on a toolbar on your screen, green, yellow or red against your goals. You find out mid-month, while there's still time to change it.
Know your numbers questions
What is CAC?
Customer acquisition cost. It's everything you spent to win new clients in a period, marketing (ads, agencies, software) plus sales costs (sales reps' pay and commissions, intake staff, sales tools), divided by the number of new clients you signed in that period.
What is LTV?
Lifetime value. On this calculator it's the profit a client brings you over the whole relationship: what they pay you in total minus what it costs you to serve them. Using profit instead of revenue keeps the comparison to CAC honest.
What is a good LTV to CAC ratio?
A common rule of thumb is 3 to 1 or better. Below 1 to 1 you lose money on every new client. Between 1 and 3 you make money but have little room for slow months or rising ad costs.
How do I calculate gross margin for a service business?
Take what a client pays you, subtract what it costs to do the work (staff time, contractors, fees, software used to deliver), and divide by what the client pays. Marketing spend is not part of this. It belongs in CAC.
How often should I check these numbers?
At least monthly, and the inputs weekly. The earlier you see that spend is up and new clients are down, the sooner you can fix it. Scoreboardz keeps the inputs live so you don't have to wait for month-end.