Estimate customer acquisition cost, a simple SaaS lifetime value, and the LTV / CAC ratio.
| CAC | – |
| LTV | – |
| LTV / CAC | – |
Use this CAC and LTV calculator for a SaaS-style sketch: what you spend to win a customer versus the gross profit that customer is worth if they stay. It is not a discounted cohort model and it is not the retail CLTV page (which uses order value × frequency × years).
CAC = acquisition spend ÷ new customers. LTV ≈ ARPU × gross-margin% ÷ period churn. Churn must be positive. A common rule of thumb is LTV / CAC of at least 3. Keep ARPU and churn on the same period (both monthly, or both yearly).
Acquisition spend: Marketing and sales cash spent to win the new customers.
New customers: How many customers that spend acquired.
ARPU / period: Average revenue per user in the same period as churn.
Gross margin (%): Contribution after variable cost of serving, e.g. 80 for 80%.
Churn / period (%): Percent of customers lost in that period. Must be above 0.
CAC: Cost to acquire one customer.
LTV: Simple lifetime value.
LTV / CAC: The ratio.
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