CAC, LTV & LTV:CAC Calculator
Compare what it costs to win a customer (CAC) with the gross profit that customer brings over their lifetime (LTV). Investors look for LTV:CAC of 3× or more.
Your numbers
RESULT
LTV:CAC
4×
CAC
$500
LTV
$2,000
- CAC payback
- 8.3 mo
- Average customer lifetime
- 33.3 mo
Healthy — LTV is at least 3× CAC.
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Get matched with Fund Force →The formula, in plain English
- CAC = Sales & marketing spend ÷ New customers
- LTV = ARPU × Gross margin % ÷ Monthly churn rate
- LTV:CAC ≥ 3 ; CAC payback = CAC ÷ (ARPU × Gross margin %)
Frequently asked questions
What is a good LTV:CAC ratio?
3× or more is the common benchmark. Much higher than 5× can mean you are under-investing in growth.
Should CAC include salaries?
Yes — a fully loaded CAC includes sales and marketing salaries, tools and agency fees, not just ad spend.
Why use gross margin in LTV?
Revenue is not profit. LTV should count the gross profit a customer generates, otherwise it overstates their value.
Results are estimates for planning and education — not financial, legal or tax advice.
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