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LTV:CAC Calculator
Two of the five numbers that decide whether your flywheel is fundable. Get your ratio, your payback, and a straight verdict.
All acquisition spend ÷ new customers, including creator fees and gifting.
LTV : CAC ratio (12 mo)
0.0x
Contribution-margin LTV vs blended CAC.
$012-month LTV (margin)
0orders to pay back CAC
Why LTV:CAC is the fundability test
Customer lifetime value against acquisition cost is the single fastest read on whether growth is a machine or a leak. It is two of the five numbers I review every Monday. If the ratio is healthy, every dollar you put into the flywheel comes back multiplied. If it is upside down, scaling just loses money faster.
How this calculator works
- 12-month LTV = average order value × gross margin × orders per customer per year. We use margin, not revenue, because margin is what actually funds growth.
- Ratio = LTV ÷ blended CAC. Aim for 3:1 or better.
- Payback = how many orders it takes to earn back the CAC in contribution margin.
Use blended CAC, fully loaded for the input, not your in-platform number. The gap between the two is usually where the halo effect is hiding. As your flywheel matures, blended CAC should fall and this ratio should climb.
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Frequently asked questions
What is a good LTV:CAC ratio?
A widely used benchmark is 3:1 or higher on contribution margin, meaning each customer is worth at least three times what it costs to acquire them. Below about 1:1 you lose money on acquisition. Far above 5:1 can mean you are underinvesting in growth.
Should I use revenue or margin for LTV?
Margin. Lifetime value should be built on contribution margin, not revenue, because margin is the money actually available to fund acquisition and reinvestment. This calculator uses average order value times gross margin times repeat orders.
What CAC should I enter?
Use blended CAC, fully loaded: total acquisition spend across every channel, including creator fees and gifted product, divided by new customers. In-platform CAC understates your true cost and hides the halo effect, so it makes the ratio look better than it is.