What does a new customer cost — and how long until they pay it back? Works for subscriptions and memberships.
LTV : CAC
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Customer acquisition cost (CAC)
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Lifetime value (LTV)
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Monthly profit ÷ churn
CAC payback
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Average customer lifetime
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What is the CAC & LTV:CAC Calculator?
Customer acquisition cost (CAC) is what you spend to win one new customer. On its own it means little — compared with lifetime value it tells you whether your growth is healthy.
This calculator gives CAC, LTV, the LTV:CAC ratio and how many months it takes to earn back each customer. It suits subscriptions, memberships and SaaS.
How to use the CAC & LTV:CAC Calculator
- Enter your marketing and sales costs for a period and the new customers won.
- Enter the monthly revenue per customer and your gross margin.
- Enter your monthly churn — the share of customers who cancel each month.
Understanding your results
- LTV : CAC
- 3:1 or better is healthy; below 1:1 every customer loses money.
- CAC payback
- Months of gross profit needed to recover the cost of acquiring a customer. Under 12 is good.
Frequently asked questions
How do I calculate CAC?
Total sales and marketing costs ÷ new customers in the same period.
What is a good CAC payback period?
Under 12 months for most subscription businesses; under 6 is excellent.
How does churn affect LTV?
LTV ≈ monthly gross profit ÷ churn. Halving churn doubles lifetime value.