CAC, LTV & Payback Calculator
This calculator computes customer acquisition cost, customer lifetime value, and the payback period in months using your actual revenue, margin, churn, and marketing spend inputs. It is built for growth marketers, CFOs, and startup founders who need to validate unit economics and present them to investors or budget committees. The tool shows results from multiple LTV models — including the Fader-Hardie probabilistic model and the simple margin-divided-by-churn method — side by side so you can see the range of credible estimates rather than a single point figure.
Inputs
Results
How this is calculated
Enter your average revenue per customer, gross margin, monthly churn rate, and total marketing and sales spend, and the calculator produces CAC, LTV under several models, LTV-to-CAC ratio, and months to payback.
Every model runs locally in your browser. Nothing you type is sent anywhere.
Frequently asked questions
What is the difference between CAC and CPA?
CAC, or Customer Acquisition Cost, counts only the costs associated with acquiring a customer who makes a repeat purchase or enters a subscription relationship — it is a unit economics metric. CPA, or Cost Per Acquisition, is a campaign metric that counts any desired conversion action, which might be a single transaction, a lead form, or an app install. CAC includes all sales and marketing overhead divided by new customers acquired in a period, while CPA is typically calculated at the campaign or channel level.
What LTV-to-CAC ratio is considered healthy?
A commonly cited benchmark is an LTV-to-CAC ratio of at least 3:1, meaning the lifetime value a customer generates should be at least three times what it cost to acquire them. SaaS businesses often target 4:1 or higher. However, the ratio alone is insufficient without also considering the payback period — a 5:1 LTV-to-CAC ratio is less impressive if payback takes four years, because capital is tied up and the business is vulnerable to churn changes.
How does churn rate affect LTV?
Churn rate has an outsized effect on LTV because it determines how long the average customer relationship lasts. A business with 2% monthly churn retains customers for an average of about 4 years; at 5% monthly churn, average retention drops to under 2 years. Because LTV is a function of both margin per period and number of periods, even small improvements in churn can dramatically increase LTV and improve unit economics across the board.