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CAC, LTV, and payback calculator
See what a customer costs to win, what they’re worth over their time with you, and how long they take to pay you back, with the formula behind every number. Works with monthly or yearly figures.
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CAC, LTV, and payback calculator
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Three steps
How it works
Enter sales and marketing spend and the new customers it brought in.
Add revenue per customer, gross margin, and churn or an expected lifetime.
Read CAC, LTV, the ratio, and payback, then copy the results or a link.
GuideReviewed
How to work out CAC, LTV, and payback
Contents
Customer acquisition cost
CAC = sales and marketing spend ÷ new customers won in the same period. Count what it takes to win customers: ads, tools, content, events, and the people doing the work. $48,000 that brings in 40 new customers is a CAC of $1,200.
Measure spend and new customers over the same period, and pick one long enough to smooth out lumpy months.
Customer lifetime value
LTV = average revenue per customer × gross margin × how long a customer stays. With a steady churn rate, the average customer stays 1 ÷ churn periods: at 2.5% monthly churn, that’s 40 months. A customer paying $250 a month at an 80% gross margin brings in $200 of gross profit a month, so $8,000 over 40 months.
This is the simple formula most teams start with. It assumes revenue and churn stay steady, and it doesn’t discount future revenue. If you haven’t lost a customer yet, churn is 0 and the formula has no end, so the calculator asks for an expected lifetime instead of showing an infinite value.
LTV to CAC, and payback
LTV ÷ CAC shows how many times over a customer repays what it cost to win them: $8,000 ÷ $1,200 is about 6.7 to 1.
CAC payback = CAC ÷ monthly gross profit per customer: $1,200 ÷ $200 is 6 months. It’s how long your money is tied up in each new customer, which matters most when cash is tight. If payback takes longer than the average customer stays, the average customer never pays back.
Neither number is good or bad on its own. Track them over time, by channel where you can, and next to how long customers really stay.
Monthly or yearly figures
If you bill yearly, switch to Yearly and enter yearly revenue per customer and yearly churn. The calculator turns revenue into months for payback and works out lifetime from the yearly churn rate.
Converting churn between months and years isn’t a simple × 12. At a steady 2.5% a month, you keep 97.5% of customers each month, which compounds to losing about 26% in a year, not 30%. The churn field shows the converted rate as you type.
Questions, answered
What people ask before they use the CAC, LTV, and payback calculator.
Divide what you spent on sales and marketing by the new customers you won in the same period. $48,000 that brings in 40 customers is a CAC of $1,200.
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