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LTV:CAC Calculator

LTV:CAC is one of the most useful scaling checks in performance marketing. If the lifetime value of the customer is too close to acquisition cost, growth becomes fragile.

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Especially important for SaaS, subscription, and repeat-purchase businesses.Useful for deciding whether paid acquisition can scale sustainably.Helps you weigh retention work against raw acquisition spend.

Formula

LTV:CAC = Customer Lifetime Value / Customer Acquisition Cost

A 3:1 ratio is often used as a rough target, but the right threshold depends on margins, payback period, and growth stage. Use the calculator to test realistic retention assumptions.

Metric Definitions

What the ratio can mean

Ratio	Interpretation	Next step
Below 1:1	Acquisition costs more than the customer is worth	Fix retention or acquisition before scaling
1:1 to 2:1	Potentially viable, but thin	Improve onboarding, upsells, or conversion quality
3:1 or higher	Often healthy for scaling	Watch payback and saturation as spend rises

Guide

Use it alongside

Payback period, to see how long it takes to recover spend.
ROAS, to see the short-term revenue signal.
Retention and churn, because a high CAC can still work with strong lifetime value.

Key Pages

01 ROAS Calculator Continue exploring this topic. Open 02 What is LTV:CAC? Continue exploring this topic. Open 03 Methodology Continue exploring this topic. Open

FAQ

Common Questions

Why does LTV:CAC matter?

It tells you whether growth is actually compounding or just buying short-term revenue.

Is 3:1 always the right goal?

No. Some businesses can scale profitably below 3:1 if payback is fast and margins are strong.

Should I use gross or net LTV?

Use the version that best matches your margin structure and decision process, and stay consistent.