CAC Calculator →
Calculate the true cost to acquire a paying customer and determine how many months it takes to recover your sales and marketing investments.
How It Works
Compares your Customer Lifetime Value directly against your Customer Acquisition Cost to categorize your growth sustainability.
Formula & Technical Methodology
LTV:CAC Ratio = LTV / CAC. Benchmarks: < 1.0 (Value Destruction), 1.0 - 2.5 (Poor Efficiency), 3.0 - 5.0 (Optimal Sustainable Growth), > 5.0 (Under-investing in acquisition).
When Should You Use This Tool?
Investor pitch decks, scaling marketing budgets, and board reviews.
Practical Example
An LTV of $3,000 paired with a CAC of $600 produces a 5:1 ratio, indicating an efficient engine ready for aggressive acquisition scale.
Frequently Asked Questions
- What does an LTV:CAC ratio above 5:1 mean?
- While it sounds great, a ratio over 5:1 often means you are under-investing in marketing and leaving market share on the table.