LTV:CAC Ratio Calculator
Answer first: LTV:CAC ≥ 3:1 is the common health benchmark. LTV here = monthly revenue × gross margin × lifespan.
For one-off purchases, set lifespan to 1 and use AOV as monthly revenue.
Results
| Metric | Value |
|---|---|
| Customer lifetime value (LTV) | — |
| LTV:CAC ratio | — |
| CAC payback period | — |
Enter your numbers to see results.
Common mistakes
- Using revenue LTV instead of gross-margin LTV.
- Overstating lifespan — be conservative with churn.
- Chasing a high ratio by under-investing in growth (a 10:1 ratio can mean you are under-spending).
FAQ
Why is 3:1 the benchmark?
It leaves room for overhead and payback while staying growth-positive.
What is CAC payback?
The number of months of gross profit needed to recover CAC. Lower is safer for cash flow.