CAC / LTV Calculator

Measure customer acquisition cost, lifetime value, LTV:CAC ratio, and payback period for subscription and service businesses.
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Acquisition & Customer Inputs
Unit Economics
Customer Acquisition Cost (CAC)
100,00
Gross Profit / Customer / Month
42,00
Average Lifetime (months)
20,0
Lifetime Value (LTV)
840,00
LTV : CAC Ratio
8,40 : 1
Payback Period (months)
2,4
LTV : CAC HealthHealthy

A ratio of 3 or higher indicates healthy unit economics and room to scale acquisition.

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Overview

The CAC / LTV Calculator measures customer acquisition cost, gross profit per customer, lifetime value, LTV:CAC ratio, and payback period. It helps subscription businesses, SaaS companies, agencies, and ecommerce stores evaluate whether their marketing and retention are financially sustainable.

Common Use Cases

How to Use

1
Enter monthly marketing and sales spending.
2
Input how many new customers are acquired each month.
3
Set average revenue per customer per month.
4
Enter gross margin percentage.
5
Set monthly churn percentage.
6
Review CAC, LTV, the LTV:CAC ratio, and payback period.

Example Scenario

SaaS Subscription Review

A subscription product tracks monthly acquisition spend, new signups, revenue per account, margin, and churn. The calculator reveals whether each new customer is profitable over their lifetime.

Technical Notes

Customer acquisition cost is total marketing and sales spend divided by new customers acquired.

Gross profit per customer is monthly revenue per customer multiplied by the gross margin.

Average customer lifetime is 1 divided by the monthly churn rate.

Lifetime value is gross profit per customer multiplied by the average lifetime in months.

The LTV:CAC ratio compares lifetime value to acquisition cost; a ratio of 3 or higher is generally considered healthy.

Payback period is acquisition cost divided by monthly gross profit, showing how long until the customer becomes profitable.

Common Mistakes

Frequently Asked Questions

A ratio of 3 or higher is commonly considered healthy, ratios above 5 may mean under-investing in growth, and ratios below 1 mean customers are not recovered profitably.

Use gross profit per customer so the result reflects what the business actually keeps, not just what it bills.

With zero churn, lifetime value is effectively infinite. Use a realistic churn estimate to get a meaningful result.

It is how many months of gross profit are needed to recover the cost of acquiring a customer.

Related Topics

SaaS metricsChurn and retentionCustomer acquisition costLifetime valueUnit economicsMarketing ROISubscription pricingGross marginRevenue analyticsGrowth strategyProfitability analysisPricing strategy