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CAC & LTV Calculator

Enter four numbers to see customer lifetime value, your LTV:CAC ratio and CAC payback period in real time — the unit economics that decide whether you can afford to grow.

By Nikhil Sharma · Updated 1 November 2026 · 3 min read

Growth lives or dies on two numbers: what it costs to win a customer (CAC) and what that customer is worth over their life (LTV). Enter four figures below and get your lifetime value, LTV:CAC ratio and payback period — recalculated as you type.

A planning estimate from your inputs. LTV uses gross-margin dollars, not raw revenue — the number that actually pays back acquisition. Get a unit-economics review →

How it's calculated

Monthly margin = average revenue per customer × gross margin. LTV = monthly margin × average customer lifespan (in months). LTV:CAC = LTV ÷ CAC. Payback period = CAC ÷ monthly margin. We use gross-margin money, not raw revenue — because it's margin, not revenue, that actually pays back what you spent to acquire the customer.

What the numbers mean

An LTV:CAC of 3:1 with payback under 12 months is the healthy benchmark for subscription and SaaS businesses — strong enough to justify spending more to grow. Below 1:1, every customer loses money and more spend only deepens the hole. The two biggest levers are retention (longer lifespan multiplies LTV) and CAC itself (better conversion and higher-intent traffic cut it). Lose customers fast and churn quietly caps your LTV no matter how good acquisition looks.

Pair this with our marketing ROI calculator to connect spend to revenue, and the budget allocator to plan where the money goes.

Numbers underwater, or not sure your CAC is even tracked right? Request an invite and we'll pressure-test your unit economics — or see how we build B2B lead generation that actually pays back.

NS
Written & reviewed by Nikhil Sharma
Founder, Fabulous Media
Nikhil has led growth for 850+ brands across 35 nations since 2008. Fabulous Media is an invitation-only growth agency that reports on pipeline and revenue, not vanity metrics. Meet the team · Request an invite.

Questions, answered

A ratio of around 3:1 is the common benchmark — the customer returns roughly three times what you spent to acquire them, over their lifetime. Much higher (5:1+) can mean you are under-investing in growth; below 1:1 means you lose money on every customer.

CAC payback period is how many months of gross margin from a customer it takes to recover what you spent acquiring them. Under 12 months is generally healthy for subscription businesses; the shorter it is, the faster you can reinvest in growth.

Gross margin. Raw revenue overstates what a customer is really worth because it ignores the cost of serving them. LTV built on gross-margin dollars is what genuinely pays back your acquisition cost, so that is what this calculator uses.

Lift retention so customers stay longer, raise deal size or margin, improve conversion so you waste less spend, and target higher-intent traffic to lower CAC. Retention is usually the highest-leverage lever because it multiplies lifetime value.

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