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Check your unit economics.
Calculate customer lifetime value, acquisition cost, the LTV:CAC ratio and CAC payback in one place. Made for SaaS and subscription founders preparing a board update or a raise.
Inputs
Total for the period, including salaries and tools.
Monthly upsell as a % of revenue.
LTV:CAC
Healthy4:1
Every $1 spent to win a customer brings back $4.00 in gross profit over their lifetime. You earn back the acquisition cost in 8.3 months.
- LTV
- $10,000 Gross profit per customer
- CAC
- $2,500 Spend / new customers
- CAC payback
- 8.3 mo Under 12 mo
- Customer lifetime
- 33.3 mo
The 3:1 to 5:1 range most SaaS investors look for.
LTV:CAC sensitivity
| Monthly churn | CAC -20% | CAC as is | CAC +20% |
|---|---|---|---|
| 2% | 7.5:1 | 6:1 | 5:1 |
| 3% (now) | 5:1 | 4:1 | 3.3:1 |
| 4% | 3.8:1 | 3:1 | 2.5:1 |
One point of churn often moves LTV more than a 20% change in CAC.
Get new tools first
Optional. New free tools and growth notes, roughly once a month.
How to use it
- Enter revenue per customer, gross margin and monthly churn or lifetime.
- Add sales and marketing spend and the new customers it brought in.
- Read the ratio, payback and how churn and CAC changes move it.
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Questions founders ask
What is a good LTV to CAC ratio?
A ratio of 3:1 or better is the usual SaaS benchmark, meaning each customer brings back three times what it cost to win them in gross profit. Below 1:1 you lose money on every customer. Above 5:1 often means you are underspending on growth.
How do you calculate customer lifetime value?
A simple SaaS formula is average revenue per account per month, times gross margin, divided by monthly churn. At $400 a month, 75% margin and 3% churn, LTV is $400 x 0.75 / 0.03, or $10,000.
What is a good CAC payback period?
Under 12 months is strong for most SaaS companies, and 12 to 18 months is common for mid-market. Over 24 months ties up a lot of cash before a customer becomes profitable. Payback is CAC divided by monthly gross profit per customer.