⚖️

CAC/LTV Calculator

Calculate and optimize your unit economics

Customer Acquisition Cost (CAC)

Monthly Marketing Spend ($)

Monthly Sales Spend ($)

New Customers Acquired (Monthly)

Lifetime Value (LTV)

Avg Revenue Per User ($)

Gross Margin (%)

Monthly Churn Rate (%)

CAC

$300

LTV

$700

LTV:CAC Ratio

2.3x

Acceptable - room to improve

CAC Payback

8.6 months

Excellent

Customer Lifetime

20.0 months

Unit Economics Health

LTV:CAC Ratio2.3x

Poor (<2x)Good (3x)Great (5x+)

CAC Payback Period8.6 months

24+ months12 months0 months

Improvement Scenarios

Reduce churn by 50%LTV:CAC 4.7x

Reduce CAC by 25%LTV:CAC 3.1x

Increase ARPU by 20%LTV:CAC 2.8x

What is CAC/LTV Calculator?

CAC (Customer Acquisition Cost) is the total sales and marketing spend divided by the number of new customers acquired in a period. LTV (Lifetime Value) is the total revenue a customer generates over their entire relationship with your business, calculated as average revenue per customer divided by churn rate.

How to use this calculator

1Enter your total sales and marketing spend for the period (include salaries, ads, tools, and events).
2Input the number of new customers acquired in the same period.
3Enter average monthly revenue per customer and your monthly churn rate.
4Review the calculated CAC, LTV, LTV:CAC ratio, and CAC payback period.
5Segment these inputs by acquisition channel to identify which channels have the best unit economics.

Why this matters for founders

The LTV:CAC ratio is the most important unit economics metric for any subscription business. It tells you whether your business model is fundamentally sustainable -- whether each customer you acquire is worth more than what you spend to get them.

How to read the results

•An LTV:CAC ratio of 3:1 or higher is considered healthy -- you earn 3x what you spend to acquire each customer.
•If LTV:CAC is below 1:1, you are losing money on every customer and need to either reduce acquisition costs or increase retention/monetization.
•CAC payback period (months to recoup acquisition cost) matters too -- under 12 months is good, under 6 months is excellent.
•Segment your LTV:CAC by channel and customer cohort; aggregate numbers can hide underperforming channels.

Industry benchmarks

Best-in-class SaaS companies target LTV:CAC of 3:1 to 5:1. Ratios above 5:1 may indicate under-investment in growth. Median CAC payback for SaaS is 15-18 months. B2B SaaS typically has higher CAC but also higher LTV than B2C.

Key terminology

💰CAC ♾️LTV 🧮Unit Economics