Calculate customer acquisition cost, lifetime value, and LTV:CAC ratio with cohort analysis and payback period estimation.
Turns marketing spend, new customer counts, and average revenue into the figures finance teams cite most: CAC, LTV, and the LTV:CAC ratio, plus payback period and a per-cohort breakdown. You enter acquisition spend, how many customers it produced, average monthly revenue per customer, gross margin, and how long customers stay; the calculator derives the rest, entirely in the browser. The mistake people most often make first: building LTV on revenue instead of gross margin, which overstates value, or comparing LTV across cohorts of different ages, which understates the older group.
A concrete input and expected output from the current implementation.
Input
Monthly acquisition spend: $20,000; New customers: 100; Average revenue per customer: $50/month; Gross margin: 70%; Average customer lifetime: 24 months
Expected output
CAC: $200 | LTV: $840 | LTV:CAC: 4.2 | Payback period: 5.7 months
CAC is 20,000 divided by 100 customers, or $200. Monthly margin per customer is $50 x 70% = $35, so LTV is $35 x 24 months = $840, the ratio is $840 / $200 = 4.2, and payback is $200 / $35 = 5.7 months.
CAC is total acquisition spend divided by the number of customers acquired in that period. LTV multiplies average monthly revenue per customer by gross margin to get monthly profit per customer, then by average lifetime in months. LTV:CAC divides the two figures, and payback period divides CAC by monthly profit per customer to get the months until a customer's margin has covered what it cost to acquire them.
Customers are grouped by the period in which they were acquired, and each group gets its own LTV. Older cohorts have more history and show realized retention; recent cohorts are still accumulating revenue, so their LTV is partial and will rise as they age. Side-by-side cohorts reveal whether newly acquired customers are worth more or less than older ones before you scale the channel that produced them.
The benchmark most often quoted is 3:1, popularized by David Skok's writing on SaaS metrics, and it is a rule of thumb, not a law. Below 1:1, each customer's lifetime margin fails to cover acquisition cost. Between 1:1 and 3:1 is common for young companies still improving retention. Ratios far above 3:1 usually mean you are underinvesting in acquisition.
Only against acquisition cost. The payback figure compares CAC with monthly gross margin per customer, so it excludes fixed overhead such as salaries and tooling. A customer that pays back after six months still must contribute toward fixed costs before the company overall breaks even, so read the number as recovery of acquisition spend, not total profitability.
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