LTV:CAC Calculator

The most important metric for subscription and SaaS businesses

What is LTV:CAC? This ratio tells you how much revenue a customer generates over their lifetime (LTV) relative to what you spent to acquire them (CAC). It's the fundamental measure of whether your business model works.

The benchmark: A healthy LTV:CAC is 3:1 or higher. Below 1:1 means you're losing money on every customer. Between 1:1 and 3:1 means you're growing but not profitable. Above 5:1 may mean you're under-investing in growth.

Who it's for: SaaS founders, subscription businesses, e-commerce brands, and investors evaluating unit economics.
Customer Acquisition
Customer Revenue
Unit Economics
Customer CAC
—
cost to acquire
Customer LTV
—
lifetime value
LTV:CAC Ratio
—
target: 3:1 or higher
Gross Profit/Customer
—
per customer
Avg Customer Lifespan
—
months
Payback Period
—
months to recover CAC
Verdict

LTV calculation uses a simplified model. Actual LTV depends on pricing changes, expansion revenue, and cost to serve. Use for strategic planning, not precise financial forecasting.

SaaS Metrics & Growth Tools

Improve LTV:CAC ratio and scale your SaaS. These tools help you track and improve unit economics.

HubSpot Marketing Hub →
40–60% recurring through PartnerStack — marketing automation, lead generation
Pipedrive →
20% first year through PartnerStack — sales CRM for SaaS and B2B
Klaviyo →
Email and SMS marketing for e-commerce and SaaS — 40% first year

We may earn a commission if you click above. Calculator is free to use.

Frequently Asked Questions

What is LTV:CAC ratio?

LTV:CAC = Customer Lifetime Value / Customer Acquisition Cost. A ratio of 3:1 means each customer is worth 3x what it cost to acquire them. Below 3:1 is often unsustainable; 5:1+ is excellent.

What is a good LTV:CAC?

B2B SaaS: 3:1 to 5:1 is healthy. Below 3:1 means you're spending too much to acquire customers. Above 5:1 may mean you're underspending on growth. The right ratio depends on your growth stage and margins.

How do you reduce CAC?

Improve conversion rates with better landing pages and lead nurturing. Increase organic traffic through SEO and content. Build referral programs. Improve product-market fit so word-of-mouth increases. Retargeting reduces cost-to-close.