CAC & LTV Calculator
Calculate customer acquisition cost, margin-adjusted lifetime value, your LTV:CAC ratio, and how many months it takes to pay back acquisition spend.
Over a period — ads, agency, tools, salaries attributable to acquisition.
Very strong. You may even be under-investing in growth.
LTV here uses gross profit (margin-adjusted), not raw revenue — the honest version. Payment fees eat directly into margin; see the Stripe fee calculator for what processing actually costs per order.
Frequently asked questions
How do I calculate customer acquisition cost (CAC)?
Total sales and marketing spend over a period ÷ new customers acquired in that period. Spending $5,000 to acquire 100 customers is a $50 CAC. Include ads, agencies, tools, and salaries attributable to acquisition — not just ad spend.
What is a good LTV to CAC ratio?
The classic benchmark is 3:1 or better — each customer returns at least three times what they cost to acquire. Below 1:1 you lose money on every customer; far above 5:1 often means you could grow faster by spending more.
How is customer lifetime value (LTV) calculated here?
AOV × orders per year × gross margin × expected years as a customer. Using gross profit instead of revenue is the honest version — a $288 revenue LTV at 60% margin is only $173 of actual profit to spend on acquisition.
What is CAC payback period?
How many months of gross profit it takes to recover the cost of acquiring a customer. Under 12 months is the common benchmark for subscription businesses; ecommerce ideally pays back on the first order or two.