LTV:CAC Ratio Calculator
Calculate your LTV to CAC ratio, find required LTV, or max affordable CAC. Includes health ratings and industry benchmarks. Free.
How to Use
- 1 In 'Find Ratio' mode, enter your Customer Lifetime Value (LTV) and Customer Acquisition Cost (CAC) to get your LTV:CAC ratio with a health rating.
- 2 Use 'Find Required LTV' to calculate the minimum lifetime value needed to achieve a target ratio given your CAC.
- 3 Use 'Find Max CAC' to calculate the maximum you can spend on acquisition while maintaining a target LTV:CAC ratio.
Use Cases
Quickly assess whether your unit economics are sustainable by checking your LTV:CAC ratio against the industry standard of 3:1.
Determine the maximum CAC you can afford while maintaining healthy unit economics as you scale marketing spend.
LTV:CAC ratio is a key metric for SaaS and subscription businesses that investors use to evaluate growth efficiency.
FAQ
The LTV:CAC ratio compares the lifetime value of a customer to the cost of acquiring them. A ratio of 3:1 means each customer generates 3x more revenue than it cost to acquire them.
A ratio of 3:1 is the widely accepted industry standard for SaaS and subscription businesses. Below 1:1 means you are losing money on each customer. Above 5:1 may indicate under-investment in growth.
Either increase LTV (through better retention, higher pricing, or upselling) or decrease CAC (through more efficient marketing channels, better conversion rates, or referral programs).
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