How do I calculate customer acquisition cost?

Divide your total acquisition spend (ads, sales, content, marketing salaries) by the number of paying customers acquired in the same period. Enter both numbers in the tool above and it returns your CAC in USD instantly.

What is a good LTV to CAC ratio?

The common benchmark is at least 3:1 — lifetime value three times acquisition cost. Below 1:1 the business loses money on every customer; 1–3 is below the norm; 3–5 is healthy; above 5 can mean you are under-investing in growth. This calculator rates your ratio against exactly these bands.

How do you calculate customer lifetime value?

The simple formula is average order value × purchases per year × average customer lifespan in years. If you know annual churn instead, lifespan ≈ 1 / churn (e.g. 25% churn → 4 years). The tool accepts either input.

How long does it take to pay back CAC?

CAC payback (months) = CAC / (monthly revenue per customer × gross margin). Under 12 months is fast, 12–24 is typical for B2B, and over 24 is usually too long. Enter MRR per customer and gross margin % in the tool to get your number.

What is unit economics in ecommerce?

Unit economics is the revenue-and-cost math per customer: CAC (what you pay to win a customer), LTV (what that customer is worth), and the LTV:CAC ratio (whether the two balance). This calculator computes all three plus CAC payback from your own numbers.

Should I use churn rate or customer lifespan for LTV?

They are two sides of the same coin: lifespan ≈ 1 / annual churn. Use whichever you actually know — 3-year lifespan and ~33% annual churn give the same result. The tool takes either and converts churn with that relation.

CAC LTV Calculator

What is Cac ltv calculator?

CAC LTV Calculator — Free CAC LTV calculator — unit-economics math for customer acquisition cost, lifetime value, the LTV:CAC ratio, and CAC payback period in months.

The math comes from the MIT-licensed Metrics-Tree unit-economics engine (vendored): CAC = marketing spend / new customers; LTV = average order value × purchases per year × lifespan years; LTV:CAC = LTV / CAC; CAC payback (months) = CAC / (monthly revenue per customer × gross margin), with margin clamped to 0–100. Lifespan from churn uses the engine's own relation, lifespan ≈ 1 / churn. Ratio bands are the engine's thresholds: <1 loss-making, <3 below norm, 3–5 excellent, >5 very high. Limitations: LTV is simple revenue math — no discounting of future cash flows, no cohort decay, and payback assumes margin never changes. Benchmarks vary by business model; a 3:1 ratio is a rule of thumb, not a law.

Why use this cac ltv calculator?

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Built for cac ltv calculator

Free CAC LTV calculator — unit-economics math for customer acquisition cost, lifetime value, the LTV:CAC ratio, and CAC payback period in months.

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Transparent & honest

LTV is simple revenue LTV (AOV × frequency × lifespan) — it does not discount future cash flows, model cohort decay, or apply gross margin to LTV itself.

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Private by design

Everything runs in your browser. Your inputs never leave your device.

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Works everywhere

Fully responsive — perfect on desktop, tablet, and mobile. No app needed.

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Regularly updated

Regularly maintained and reviewed to ensure accuracy.

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Free forever

No accounts, no limits, no watermarks. Use CAC LTV Calculator as much as you need.

How to use CAC LTV Calculator

1Enter your total marketing spend and how many new customers it acquired — the customer acquisition cost calculator divides spend by customers.
2Enter average order value and purchases per year so the lifetime value calculator knows your yearly revenue per customer.
3Fill in customer lifespan in years — or an annual churn % instead, which the tool converts via lifespan ≈ 1 / churn.
4Add monthly revenue per customer and gross margin % if you want the CAC payback period calculator to estimate payback months.
5Run the tool and read the LTV:CAC ratio against the 3:1 benchmark: below 1 means you lose money on each customer.

What can you do with CAC LTV Calculator?

Customer acquisition cost calculator — Free CAC LTV calculator — unit-economics math for customer acquisition cost, lifetime value, the LTV:CAC ratio, and CAC payback period in months.
Lifetime value calculator — Free CAC LTV calculator — unit-economics math for customer acquisition cost, lifetime value, the LTV:CAC ratio, and CAC payback period in months.
Ltv cac ratio calculator — Free CAC LTV calculator — unit-economics math for customer acquisition cost, lifetime value, the LTV:CAC ratio, and CAC payback period in months.
Cac payback period calculator — Free CAC LTV calculator — unit-economics math for customer acquisition cost, lifetime value, the LTV:CAC ratio, and CAC payback period in months.
Unit economics calculator — Free CAC LTV calculator — unit-economics math for customer acquisition cost, lifetime value, the LTV:CAC ratio, and CAC payback period in months.

Good to know

LTV is simple revenue LTV (AOV × frequency × lifespan) — it does not discount future cash flows, model cohort decay, or apply gross margin to LTV itself.
CAC payback assumes constant monthly margin per customer; real margins drift over time.
The 3:1 LTV:CAC benchmark and the CAC band thresholds are the vendored engine's thresholds — rules of thumb that vary by business model, not universal laws.
Margin input is clamped to 0–100%; a 0% margin cannot produce a payback period (returns no value instead of infinity).

How it works

The math comes from the MIT-licensed Metrics-Tree unit-economics engine (vendored): CAC = marketing spend / new customers; LTV = average order value × purchases per year × lifespan years; LTV:CAC = LTV / CAC; CAC payback (months) = CAC / (monthly revenue per customer × gross margin), with margin clamped to 0–100. Lifespan from churn uses the engine's own relation, lifespan ≈ 1 / churn. Ratio bands are the engine's thresholds: <1 loss-making, <3 below norm, 3–5 excellent, >5 very high. Limitations: LTV is simple revenue math — no discounting of future cash flows, no cohort decay, and payback assumes margin never changes. Benchmarks vary by business model; a 3:1 ratio is a rule of thumb, not a law.

Examples

Healthy SaaS-style unit economics

CAC $250.00, LTV $15,000.00, LTV:CAC 60.00 — very high ratio, payback ~2.1 months.

Lifespan from annual churn

CAC $120.00, lifespan 4 years, LTV $6,400.00, LTV:CAC 53.33.

Missing lifespan and churn

Error — LTV needs either customer lifespan in years or an annual churn %.

People also search for these — this tool handles them all:

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