CAC vs LTV Calculator
Compare customer acquisition cost with lifetime value to see whether every customer earns more than you spend to win them.
Enter your numbers
Example: 50000
Example: 100
Example: 1500
Example: 30
Example: 4
Recent
Formula
How the calculation works
The calculator divides total marketing spend by the number of customers won to get the acquisition cost for each one.
It multiplies the average order value by the margin percentage and then by the repeat purchase count to get lifetime value.
Finally it divides lifetime value by acquisition cost, and a ratio above three is generally treated as healthy.
Common mistakes
- Counting only the ad budget and ignoring salaries, software and agency fees, which understates the true acquisition cost.
- Using revenue instead of profit margin when building lifetime value, which overstates how much each customer really contributes.
When to use it
- Business owners use it to judge whether a marketing channel pays for itself or quietly drains the monthly budget.
- Founders and investors use the ratio to check the health of a repeat purchase model before scaling ad spend.
Worked example
With 50000 taka of marketing spend bringing 100 customers the CAC is 500 taka, and with an average order of 1500 taka at a 30 percent margin over 4 purchases the LTV is 1800 taka, an LTV to CAC ratio of 3.6.
Common questions
What is a good LTV to CAC ratio?
A ratio of about three to one is widely treated as healthy, because each customer then brings three times what it cost to acquire them.
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