CAC / LTV / Payback Calculator
Calculate your Customer Acquisition Cost (CAC), Customer Lifetime Value (LTV), LTV/CAC ratio, Payback period, and Marketing ROI. Free tool with interpretation and formulas.
Acquisition and retention data
Calculated automatically from lifespan (1 / lifespan)
Everything you need to know about the CAC / LTV / Payback Calculator
Why calculate your CAC, LTV, and LTV/CAC ratio?
Knowing your Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV) is essential for managing profitable growth. An LTV/CAC ratio below 1 means every acquired customer is costing you money.
The Payback period tells you how quickly you recover your marketing investment. The shorter it is, the healthier your cash flow and the faster you can reinvest.
Tracking these metrics over time helps you identify the most profitable acquisition channels, optimize marketing spend, and present solid data to investors.
Who uses the CAC / LTV Calculator?
- SaaS startup founders
- You're running a startup in seed or growth stage and need to prove to investors that your unit economics are sound. The LTV/CAC ratio is one of the most scrutinized metrics during fundraising rounds.
- Growth marketers and acquisition managers
- You manage advertising budgets across multiple channels (Google Ads, Meta, LinkedIn) and need to compare CAC by channel to allocate budgets optimally.
- Investors and VCs
- You analyze key metrics for portfolio companies or during due diligence. An LTV/CAC ratio between 3 and 5 is generally considered a sign of healthy economics.
- CFOs and financial controllers
- You build financial forecasts and need to model the impact of churn, gross margin, and marketing spend on medium-term customer profitability.
How does the CAC / LTV Calculator work?
Enter your monthly marketing spend, the number of new customers acquired, average revenue per customer, and your gross margin.
Specify the average customer lifespan in months. The churn rate can be calculated automatically or entered manually if you have the exact figure.
The tool instantly calculates your CAC, LTV, LTV/CAC ratio, payback period, and marketing ROI, with contextual interpretation and detailed formulas.
Frequently asked questions about CAC and LTV
- What is a good LTV/CAC ratio?
- An LTV/CAC ratio of 3:1 is generally considered healthy: every dollar invested in acquisition generates 3 dollars over the customer's lifetime. Below 1:1, you're losing money. Above 5:1, you're likely under-investing in marketing and could be growing faster.
- How can you effectively reduce CAC?
- The most common levers are: improving landing page conversion rates, refining ad targeting to attract more qualified prospects, developing content marketing and SEO for organic traffic, and setting up a referral program to leverage word-of-mouth.
- What's the difference between gross LTV and net LTV?
- Gross LTV uses the total revenue generated by a customer, while net LTV incorporates the gross margin (which is what our calculator does). Net LTV is more relevant because it reflects each customer's actual contribution to profitability.
- What payback period is acceptable for a SaaS startup?
- In B2B SaaS, a payback period of 12 months or less is considered excellent. Between 12 and 18 months is acceptable. Beyond 24 months, cash flow comes under pressure and you need to optimize either CAC or the monthly customer value.
- Does the churn rate directly affect LTV?
- Absolutely. Churn is inversely proportional to customer lifespan: a monthly churn of 5% yields an average lifespan of 20 months, while a 2% churn extends it to 50 months. Reducing churn by just a few points can multiply your LTV and radically transform your acquisition profitability.