LTV:CAC Calculator
Calculate your Customer Lifetime Value to Customer Acquisition Cost ratio, payback periods, and unit economics health.
LTV:CAC Calculator
Calculate Customer Lifetime Value, Customer Acquisition Cost ratio, and payback periods for your SaaS business.
Average monthly subscription value per customer
Revenue minus direct costs (hosting, support, etc.)
Percentage of customers who cancel each month
Total cost to acquire one paying customer
LTV:CAC Ratio
Excellent10.6:1
Very strong unit economics
CAC Payback Period
Excellent1.9 months
Great cash flow efficiency
Customer LTV
$1,584
Total profit per customer
Monthly Profit
$79
After gross margin
Customer Lifespan
1y 8m
Average retention period
Gross LTV
$1,980
Before margin deduction
Unit Economics Analysis
LTV:CAC Ratio: 10.6:1 is excellent — you have very strong unit economics
Payback Period: 1.9 months to recover CAC — excellent cash flow efficiency
Customer Value: Each customer generates $1,584 in profit over 1y 8m average lifespan
Industry Benchmarks
Enterprise SaaS
LTV:CAC: 5:1 - 10:1
Payback: 12-24 months
CAC: $1,000 - $50,000+
Mid-Market SaaS
LTV:CAC: 3:1 - 5:1
Payback: 6-18 months
CAC: $200 - $2,000
SMB/Consumer
LTV:CAC: 3:1 - 4:1
Payback: 3-12 months
CAC: $10 - $500
How to Use the LTV:CAC Calculator
1. Enter Revenue Metrics
Input your average revenue per customer per month and gross margin percentage. Gross margin accounts for direct costs like hosting, support, and payment processing.
2. Set Churn Rate
Monthly churn rate determines how long customers stay. Lower churn = higher LTV. This is the percentage of customers who cancel each month.
3. Input Customer Acquisition Cost
Total cost to acquire one customer including marketing spend, sales team costs, tools, and attribution across all channels.
Understanding LTV:CAC Ratio
What is Customer Lifetime Value (LTV)?
LTV represents the total profit a customer generates during their entire relationship with your business. For SaaS companies, it's calculated as:
What is Customer Acquisition Cost (CAC)?
CAC is the total cost to acquire one paying customer, including all sales and marketing expenses. This includes advertising spend, sales team salaries, marketing tools, and content creation.
LTV:CAC Ratio Benchmarks
< 1:1
Unsustainable — losing money on every customer
1:1 - 3:1
Marginal — barely profitable, needs improvement
3:1 - 5:1
Good — healthy unit economics for most SaaS
> 5:1
Excellent — very strong unit economics
CAC Payback Period
The payback period is how long it takes to recover your customer acquisition investment. Shorter payback periods improve cash flow and reduce risk.
< 12 months: Excellent cash flow efficiency
12-18 months: Good for most SaaS businesses
> 24 months: May strain cash flow, consider optimizing
Industry Variations
Enterprise SaaS
Higher CAC (often $1,000-$50,000+) but much higher LTV due to low churn and expansion revenue. LTV:CAC ratios of 5:1-10:1 are common.
SMB SaaS
Lower CAC ($100-$1,000) but higher churn. Target 3:1-5:1 LTV:CAC with payback under 18 months.
Consumer/Prosumer
Very low CAC ($10-$200) but often higher churn. Focus on rapid payback periods under 12 months.
Strategies to Improve LTV:CAC
Increase LTV:
- • Reduce churn through better onboarding and customer success
- • Increase prices or upgrade customers to higher tiers
- • Drive feature adoption to increase stickiness
- • Expand into adjacent use cases or add-on features
Reduce CAC:
- • Optimize marketing channels with better attribution
- • Improve conversion rates at each funnel stage
- • Leverage referrals and word-of-mouth growth
- • Build content and SEO for organic acquisition
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