Free tools / LTV:CAC & payback calculator
Free calculator · runs in your browserWhat's a customer worth, and when do they pay back?
Lifetime value built on margin, not revenue. Enter your numbers to see contribution LTV, the LTV:CAC ratio against the 3:1 benchmark, and how many months until a customer repays what you spent to win them.
Your numbers
Likely under-investingAbove 5:1 you may be leaving growth on the table.Operator benchmark; 3-5:1 sweet spot, >5:1 often under-investing.
LTV : CAC
8.16x
A$367 lifetime value vs A$45 to acquire
CAC payback
4.4 mo
Excellent
Contribution LTV
A$367
Margin over the relationship
LTV : CAC ratio
01:13:16:1+
3:1 is the operator sweet spot. Below it, there's little left for fixed costs; far above it, you may be under-investing in growth. Payback under 12 months keeps cash healthy.
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How this is calculated
Ecommerce: LTV = AOV × orders/yr × lifespan(yr) × margin %
Subscription: LTV = ARPU × margin % × (1 ÷ monthly churn)
LTV : CAC = LTV ÷ CAC
payback (months) = CAC ÷ (monthly revenue × margin %)
Subscription: LTV = ARPU × margin % × (1 ÷ monthly churn)
LTV : CAC = LTV ÷ CAC
payback (months) = CAC ÷ (monthly revenue × margin %)
LTV is built on contribution margin so it's comparable to the real cost of acquisition. Bands: under 1:1 is critical, 3-5:1 is healthy, above 5:1 may signal under-investment in growth; payback under 12 months keeps cash healthy. See the Retention & LTV Guide and the three CACs.
Questions
For ecommerce: AOV × orders per year × lifespan in years × contribution margin %. For subscription: monthly ARPU × gross margin % × lifespan, where lifespan in months is 1 ÷ monthly churn. We use contribution margin, not revenue, so LTV is the profit a customer actually generates.
3:1 is the widely used sweet spot: enough margin over acquisition cost to cover fixed costs and still profit. Under 1:1 you lose money on every customer. Above 5:1 you may be under-investing in growth and could afford to acquire more aggressively.
Payback months = CAC ÷ (monthly revenue per customer × margin %). It's how long the margin a customer generates takes to repay what you spent to acquire them. Under 12 months is the common benchmark.
A customer who spends $1,000 but costs $700 in product, shipping and fees is worth $300 to you, not $1,000. Building LTV on margin keeps the ratio honest and comparable to the real cost of acquisition.
See real LTV:CAC by cohort and channel.Blufire computes payback and lifetime margin on your live data, segmented by how customers were acquired.