CAC & LTV Calculator: Payback and LTV:CAC

Two numbers decide whether marketing can scale: what a customer costs to win, and what that customer is worth. This calculator puts them side by side. It runs in your browser, so nothing you type is sent anywhere.

What the calculator works out

CAC, customer acquisition cost: sales and marketing spend ÷ new customers won in the same period.
Gross-margin LTV, lifetime value: average order value × orders per year × gross margin × years a customer stays.
LTV to CAC: how many times a customer’s lifetime gross margin covers the cost of winning them.
CAC payback: how many months of gross margin it takes to earn back the acquisition cost.

Every term is defined, with its formula and its blind spots, in our marketing metrics glossary.

How to get honest inputs

Match the periods. Spend and new customers must come from the same window, ideally a full quarter, so one big campaign does not distort the picture.
Count all the spend. Media, agency and tool fees, and the share of sales salaries that goes on winning new business. Media alone flatters CAC.
Use gross margin, not revenue. A customer worth a lot of revenue at a thin margin is worth less than it looks.
Be strict about lifetime. Use how long customers actually stay in your data, not how long you hope they will. If you do not know yet, test one, two and three years.
Separate new and returning buyers. Counting repeat orders as new customers makes CAC look cheaper than it is.

Reading the result

There is no universal good number. A ratio that is healthy for a subscription business can be dangerous for a business with one large purchase every five years. What matters is the direction over time, the payback period your cash flow can carry, and whether CAC holds steady as you spend more.

Numbers look odd, or too good to be true?

Send them to us

What it cannot tell you

This is an average, and averages hide things. Some channels and customer groups will pay back far faster than others. It also cannot tell you what marketing caused versus what would have happened anyway; for that you need holdout tests and lift studies, which we explain in how we measure.

For B2B businesses with long sales cycles, use contract value and gross margin per contract, and widen the period to match your sales cycle, otherwise this quarter’s spend is compared with customers won from last year’s work.

Before you trust the number.

What is a good LTV to CAC ratio?

It depends on your margins, cash position and how fast you need to grow. Many investors look for lifetime gross margin to be a healthy multiple of acquisition cost, but the right level for you depends on how long payback takes and how reliable your retention data is. Track it over time rather than chasing one target.

Should CAC include salaries?

For a fully loaded CAC, yes: include the share of sales and marketing salaries spent on winning new customers, plus agency and tool costs. Paid CAC, which counts media only, is useful for comparing channels but understates the real cost.

Why use gross margin instead of revenue for LTV?

Because acquisition is paid for out of margin, not revenue. Revenue-based LTV can make an unprofitable customer look valuable, especially in categories with heavy discounts or high fulfilment costs.

Is my data stored?

No. The calculator runs in your browser. Nothing you enter is sent to us or saved.

What a customer costs. What a customer is worth.