Customer LTV:CAC Ratio Calculator
This customer LTV:CAC ratio calculator checks whether your customer lifetime value justifies what you're spending to acquire each one — one of the core efficiency metrics for any subscription or repeat-purchase business. Enter your numbers to see your ratio against the commonly cited 3:1 benchmark.
Monthly recurring revenue per customer.
The percentage of revenue left after direct costs of serving customers (hosting, support, payment processing).
Used to estimate average customer lifetime.
Total sales and marketing spend divided by new customers acquired in the same period.
LTV:CAC ratio
सेव करने के लिए लॉग इन करें3.33
A commonly cited healthy benchmark is 3:1 or higher.
Frequently asked questions
Why use gross margin instead of raw revenue for LTV?+
CAC is a real cost, so it should be compared against the actual profit a customer generates, not their raw revenue — using gross margin accounts for the direct costs (hosting, support, payment processing) of serving that customer.
Is a higher LTV:CAC ratio always better?+
Generally yes, up to a point — but an extremely high ratio (well above 5:1 or so) can also suggest you're being too conservative with growth spending and could likely acquire more customers profitably by investing more in acquisition.
What costs should be included in CAC?+
Total sales and marketing spend (salaries, ad spend, tools, commissions) for a given period, divided by the number of new customers acquired in that same period — be consistent about what's included so your ratio is comparable over time.
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