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Unit Economics Calculator for Startups: CAC, LTV and Payback

Enter your monthly sales and marketing spend, new customers, revenue per customer, gross margin and churn to see customer acquisition cost (CAC), customer lifetime value (LTV), the LTV to CAC ratio and the months it takes to earn back CAC. Choose OMR, AUD, USD, AED or SAR. Nothing you type leaves your browser unless you choose to email yourself the result.

Customer acquisition cost (CAC)

OMR 150

Customer lifetime value (LTV)

OMR 787

LTV to CAC

5.2x

CAC payback

4.8 months

Healthy on both common rules of thumb: LTV at least 3 times CAC and payback within 12 months.

Read every channel on its own numbers. A blended average hides the channel that loses money.

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The formulas

  • CAC = sales and marketing spend ÷ new customers
  • Monthly contribution per customer = revenue per customer × gross margin
  • LTV = monthly contribution ÷ monthly churn
  • LTV to CAC = LTV ÷ CAC
  • CAC payback (months) = CAC ÷ monthly contribution

Common rules of thumb are an LTV of at least three times CAC and payback within 12 months, but they vary by business model. Look at each channel separately rather than one blended number.

Frequently asked questions

What is a good LTV to CAC ratio?

A common rule of thumb is at least 3 to 1, with CAC paid back within 12 months. The right level depends on your model, cash position and growth plans.

Should CAC include salaries?

For a full picture, include the sales and marketing team's cost as well as ad spend. Track a paid-only CAC too, so you can compare channels.

Why use gross margin in LTV?

Revenue is not profit. Using gross margin shows what each customer contributes after the direct cost of serving them.

Keep reading

FAQ

What is a good LTV to CAC ratio?
A common rule of thumb is at least 3 to 1, with CAC paid back within 12 months. The right level depends on your model, cash position and growth plans.
Should CAC include salaries?
For a full picture, include the sales and marketing team's cost as well as ad spend. Track a paid-only CAC too, so you can compare channels.
Why use gross margin in LTV?
Revenue is not profit. Using gross margin shows what each customer contributes after the direct cost of serving them.