Free LTV:CACRatio Calculator
Calculate your Customer Lifetime Value to Customer Acquisition Cost ratio. Understand your unit economics and compare against industry benchmarks.
Calculate Your Ratio
Enter your metrics to calculate your LTV:CAC ratio
Average revenue you expect from a customer over their lifetime
Total cost to acquire one customer (marketing + sales)
Your Results
See how your unit economics stack up
Enter your LTV and CAC values to see results
How to Calculate LTV
Customer Lifetime Value represents the total revenue you can expect from a customer:
- For SaaS: Monthly Revenue × Average Customer Lifetime (months)
- Include upsells, cross-sells, and expansion revenue
- Account for gross margin in your calculations
How to Calculate CAC
Customer Acquisition Cost includes all expenses to acquire new customers:
- Include: Ad spend, salaries, tools, and software
- Track CAC by channel for better optimization
- Common mistake: Not including all hidden costs
Industry Benchmarks
Compare your metrics against industry standards
| Industry | Typical LTV | Typical CAC | Target Ratio | Status |
|---|---|---|---|---|
| B2B SaaS | $25,000 | $7,000 | 3.6:1 | Healthy |
| B2C SaaS | $500 | $200 | 2.5:1 | Moderate |
| E-commerce | $300 | $100 | 3:1 | Healthy |
| Marketplace | $1,200 | $300 | 4:1 | Healthy |
| Fintech | $2,000 | $500 | 4:1 | Healthy |
| EdTech | $1,500 | $500 | 3:1 | Healthy |
| HealthTech | $3,000 | $1,000 | 3:1 | Healthy |
How to Improve Your LTV:CAC Ratio
Increase LTV
- • Improve product stickiness and engagement
- • Implement upselling and cross-selling
- • Reduce churn with better onboarding
- • Increase prices for high-value segments
- • Add expansion revenue opportunities
Reduce CAC
- • Improve conversion rates at each funnel stage
- • Focus on higher-performing channels
- • Implement referral programs
- • Optimize ad targeting and messaging
- • Leverage content marketing and SEO
Frequently Asked Questions
What is a good LTV:CAC ratio?
A healthy LTV:CAC ratio is 3:1 or higher, meaning your customer lifetime value is at least 3 times your acquisition cost. Below 1:1 means you're losing money on each customer.
How often should I calculate this?
Calculate your LTV:CAC ratio monthly or quarterly. Track it by cohort and acquisition channel for deeper insights into what's working.
Why is my CAC increasing?
Rising CAC often results from increased competition, market saturation, or poor attribution leading to investment in the wrong channels.
Should I include customer success costs?
For acquisition cost, only include sales and marketing. Customer success costs should be factored into your gross margin when calculating LTV.