What is a customer really worth to you?
See what it costs to win a customer, what they earn you in real profit over time, and how much you can afford to spend to get more.
Revenue LTV vs. profit LTV
Many people calculate lifetime value from revenue. That makes every customer look more valuable than they are.
Your best moves PRO
See how much lifetime profit you'd gain from better retention, bigger orders, more frequent purchases, or cheaper acquisition.
Find out which lever grows customer value the most, and how fast customers pay you back.
Get the Pro versionGet the full CAC & LTV Calculator Pro
Everything in this free version, plus the tools to decide where to spend and how to grow customer value.
- Payback chartSee the month each customer pays back what it cost to win them.
- Growth scenarios"Raise retention 5 points: +$X per customer," ranked for you.
- Compare up to 6 channelsRank paid social, search, email, and more by lifetime profit.
- Retention and CAC gridSee your LTV:CAC ratio at every retention rate and acquisition cost.
- First-order discountsSee what welcome offers really cost over a customer's lifetime.
- Spreadsheet + chartAn Excel and Google Sheets version, plus a max-CAC reference chart.
Made by Reagan T. Pollack, author of No Startup Left Behind. reaganpollack.com
Disclaimer: This calculator is provided for general educational and informational purposes only and is not financial, accounting, tax, or legal advice. Results are estimates based solely on the numbers you enter and may contain errors or inaccuracies. Lifetime value is a projection that depends on your retention and purchase assumptions, which may not hold. No guarantee is made as to the accuracy, completeness, or reliability of any calculation. Reagan T. Pollack is not liable for any losses, damages, or decisions resulting from the use of this calculator or reliance on its results. Consult a qualified professional before making business or financial decisions.
What this LTV calculator shows you
Enter your marketing spend, new customers, order value, profit margin, purchase frequency, and retention to see your customer acquisition cost (CAC), profit-based lifetime value (LTV), your LTV:CAC ratio, how many months until a customer pays you back, and the most you can spend to win one.
Frequently asked questions
How do I calculate customer acquisition cost (CAC)?
Divide what you spent to acquire customers in a period by the number of new customers you won. Spending $6,000 to win 150 customers is a CAC of $40.
How do I calculate customer lifetime value (LTV)?
Multiply average order value by orders per year and your profit margin to get annual profit per customer, then add up the years they stay, adjusted for how many customers keep buying each year. Using profit instead of revenue gives a much more honest number.
What is a good LTV:CAC ratio?
A 3:1 ratio is often cited as a healthy target: each customer earns three times what it cost to win them. Below 1:1, customers cost more than they earn back. Very high ratios can mean you’re underinvesting in growth. What’s right depends on your business and how fast you need cash back.
What is a payback period?
It’s how long it takes a new customer to generate enough profit to cover what it cost to acquire them. Shorter payback means your growth spending comes back to you faster.