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CAC, LTV, payback months, and the LTV:CAC health gauge in one screen.
3:1 = golden rule
💡 Benchmarks: LTV:CAC below 1:1 means you lose money on every customer; ~3:1 is the SaaS golden rule; above 5:1 often means you can afford to spend more on growth. CAC payback under 12 months keeps cash-flow healthy.
CAC (customer acquisition cost) is everything you spend on marketing and sales divided by the customers it brought in. LTV(customer lifetime value) is the total gross-margin profit an average customer generates before they churn. If you don't know both, you're guessing at whether growth is building value or burning it.
With a monthly churn rate, the average customer sticks around for 1 ÷ churn months (5% churn → 20 months). Each month they contribute ARPU × gross margin in profit, so LTV = ARPU × margin ÷ churn. A $50 ARPU at 80% margin and 5% monthly churn yields an $800 LTV. Margin matters: revenue you don't keep can't pay back acquisition spend.
Below 1:1 you lose money on every customer — stop scaling and fix retention or targeting. Around 3:1 is the classic healthy zone: enough margin to fund operations and mistakes. Above 5:1is efficient but may mean you're underinvesting in growth competitors will happily take. Also watch CAC payback — the months of gross margin needed to recover acquisition cost; under 12 months keeps cash flow comfortable.
Segment by channel and cohort: paid social often shows a very different ratio than organic or referral. When LTV:CAC is strong, the correct move is usually to spend more on acquisition while the ratio holds — this calculator makes the ceiling of that spend visible before finance finds it for you.
The CAC & LTV Calculator lets you figure out ltv cac calculatorinstantly, without reaching for a spreadsheet or doing the math by hand. Whether you're planning a budget, checking a loan, or working through homework, the tool applies the correct formula behind the scenes and shows the result the moment you enter your numbers.
Unlike a static chart or table, this calculator adapts to your exact inputs. You can adjust any value and see the outcome update in real time, which makes it easy to compare scenarios — for example, "what if the rate were 1% lower?" or "what if I paid an extra $50 a month?"
Common uses: people reach for this tool when they need to find a ltv cac ratio 3 to 1 rule, how to calculate ltv from churn and arpu, cac payback period calculator, or saas unit economics benchmark tool.
Browser-based tools like this one have a few real advantages over installed software or manual methods:
The CAC & LTV Calculator is based on the following formula:
CAC = spend ÷ customers · LTV = ARPU × margin ÷ churn · health ≈ 3:1
Variables: CAC = Customer acquisition cost ($) spend = Total sales and marketing spend ($) customers = New customers acquired LTV = Customer lifetime value ($) ARPU = Average revenue per user per month ($) margin = Gross margin (decimal, e.g. 0.80) churn = Monthly churn rate (decimal) payback = Months to recover CAC (CAC ÷ monthly margin)
Unit-economics core: acquisition cost divides total spend by customers won; lifetime value multiplies monthly margin (ARPU × gross margin) by the average lifetime in months (1 ÷ monthly churn). The LTV:CAC ratio is judged against the 3:1 golden rule, with payback = CAC ÷ monthly margin.
Worked example: Step 1: spend = $24,000, customers = 120 → CAC = 24,000 / 120 = $200. Step 2: ARPU = $50, margin 80% → monthly margin = $40; churn 5% → LTV = 40 / 0.05 = $800. Step 3: LTV:CAC = 800 / 200 = 4:1, above the 3:1 health line. Step 4: payback = 200 / 40 = 5 months. Result: each $200 customer returns about $800 of gross margin over a ~20-month lifetime, with CAC repaid in 5 months.
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