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LTV & CAC Calculator
Work out customer lifetime value, acquisition cost, the LTV:CAC ratio and how many months it takes to earn back CAC.
Lifetime value (LTV)
Acquisition cost (CAC)
How it’s calculated: LTV = monthly revenue per customer × gross margin ÷ monthly churn. CAC = sales and marketing spend ÷ new customers. A healthy subscription business usually aims for an LTV:CAC of 3:1 or better and a payback under 12 months; far above 5:1 can mean you’re under-investing in growth.
About the LTV & CAC Calculator
The LTV and CAC Calculator works out customer lifetime value, customer acquisition cost, the LTV:CAC ratio and CAC payback period from your revenue per customer, gross margin, churn and marketing spend. These are key numbers for SaaS, subscription and e-commerce businesses deciding how much they can afford to spend to win a customer.
How to use the LTV & CAC Calculator
- Enter average revenue per customer per month, gross margin and monthly churn.
- Enter your sales and marketing spend and the new customers it brought in.
- Read lifetime value, acquisition cost, the LTV:CAC ratio and payback period.
- Adjust churn or spend to see how each changes the ratio.
Frequently asked questions
What is a good LTV:CAC ratio?
A ratio of about 3:1 is a common target. Below 1:1 you lose money on each customer; far above 5:1 may mean you could grow faster by spending more.
How is customer lifetime value calculated?
A simple version is monthly revenue per customer × gross margin ÷ monthly churn rate.
What is CAC payback period?
The number of months it takes for a customer’s gross profit to repay what it cost to acquire them. Under 12 months is generally considered healthy.