Free calculator
LTV:CAC Ratio Calculator
Compare what a customer is worth over their lifetime with what it costs to win them. Say whether your lifetime value is revenue or contribution — the ratio means very different things.
Do my customers pay back what they cost to win?
Nothing is saved or sent anywhere.
Result
Enter your numbers
The formula
LTV:CAC = customer lifetime value ÷ customer acquisition costWorked example
A customer contributes $576 over three years after the costs of serving them, and costs $120 to win. LTV:CAC is 576 ÷ 120 = 4.8 : 1, leaving $456 per customer towards overhead and profit — if they really stay three years.
What the result means — and what it does not
- Below 1 on contribution, acquisition costs more than customers return over your horizon.
- A high ratio is only as good as the retention assumption behind it, and says nothing about how long payback takes.
Common questions
Is 3:1 a good LTV:CAC ratio?
3:1 is a popular rule of thumb, mostly from subscription software, not a law. On contribution, anything below 1 means customers do not pay back their acquisition cost over your horizon. Above that, the right level depends on your overhead, how quickly customers pay back and how reliable your lifetime value estimate is.
Should lifetime value be revenue or contribution?
Contribution. Revenue includes money you pass straight on to suppliers and staff for each sale, so a revenue-based ratio can look comfortable while every customer loses money.
Where do I get the inputs?
The Customer Lifetime Value calculator estimates lifetime contribution, and the CAC calculator works out acquisition cost. Use the same period and customer group for both.