LTV:CAC Calculator

What is the LTV:CAC ratio?

LTV:CAC compares estimated customer lifetime value with the cost of acquiring a customer. It helps evaluate whether acquisition spending is proportionate to expected customer value.

How to use this tool

LTV:CAC = customer lifetime value ÷ customer acquisition cost. Use matching customer segments and a positive CAC. Be explicit about whether LTV represents revenue or gross profit.

Example

An LTV of $600 and CAC of $200 gives a ratio of 3:1: three dollars of estimated lifetime value for each dollar spent on acquisition.

Understanding your result

There is no universally correct target. Margin, retention, financing needs, and the time required to earn back CAC all matter. A revenue-based ratio can look attractive even when servicing customers is expensive.