LTV > 3x CAC
"We spent 100k this month of advertising. It's too high, you have to decrease it."
It's easy to just look at the spend and not see what that marketing spend is bringing onto the table.
You spent 100k but how many leads did you generate for the sales team? Out of those leads, how many were closed and generated cash flow for the company?
As you may realise, there's a lot of nuance in "Spend money to get revenue."
One way to quickly justify ad spend is if you can achieve a LTV > 3x CAC multiple as your return on ad spend. With a 3x multiple you know that your marketing operations and ad spend is scalable and can support further expansion.