CAC and LTV Calculator

Written byOleh Soloninupdated 14 August 2026

Marketing spend

Customers acquired

Average order value

Purchases a year

Customer lifespan, years

Gross margin, %

Result

CAC$5,000.00
LTV$9,600.00
LTV to CAC1.92
AssessmentIt works, but there is no headroom
Payback, months12.5
Revenue per customer$32,000.00

Three to one is the working benchmark

Customer acquisition cost, lifetime value, the ratio between them and how long acquisition takes to pay back.

Unit economics comes down to two numbers: what a customer costs to win and what they bring over their life. The first is CAC, all acquisition spend over new customers. The second is LTV — average order value times purchase frequency times lifespan times margin.

An LTV to CAC ratio of three or better is considered healthy. Below that, the business spends too much winning customers and leaves nothing for everything else. Far above it usually means you are underinvesting and could grow faster.

What this calculator shows

CAC, LTV and the ratio between them
How many months of margin it takes to repay acquisition
A direct verdict on whether the economics work

What to keep in mind

LTV is computed on margin, not revenue: a customer bringing a million of turnover at a five percent margin is worth fifty thousand.
CAC includes all acquisition costs — marketing salaries and agencies as well as media spend.

FAQs

Why three to one specifically?

It is a rule of thumb from SaaS practice: one part to acquisition, one to delivery and support, one left as profit. Below two, businesses usually cannot survive growth.

What belongs in CAC?

Every acquisition cost: media, marketing and sales salaries, agencies, tools. Counting media alone is the commonest mistake and makes the economics look healthier than they are.

How do I find the customer lifespan?

From churn: one divided by monthly churn gives the average life in months. At five percent monthly churn a customer stays twenty months.

Why does payback matter more than the ratio?

Because it is about cash today. A fine LTV to CAC ratio with a two-year payback means all growth has to be financed out of pocket or on credit.

Worked example

A service with repeat purchases

Input: 300,000 marketing, 60 customers, 4,000 order value, 4 purchases a year, 2 years, 30 percent margin

Output: CAC 5,000, LTV 9,600, ratio 1.92 — it works, but with no headroom

Note: Payback is twelve and a half months. A year to recover acquisition means the cash gap has to be funded somewhere, and any dip in retention turns the economics negative.

Useful links

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CAC and LTV Calculator

Result

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