Customer Lifetime Value and CAC Calculator
Two numbers decide whether paid marketing makes sense for a repeat-customer business: the gross profit a customer brings in over their whole time with you, and what you spend to win that customer. Enter the monthly revenue per customer, your gross margin, the share of customers who leave each month, your monthly sales and marketing spend and the new customers it brings. The calculator shows lifetime value, cost to acquire a customer, the ratio between them and the months it takes to earn back that cost. Churn is the input most likely to be wrong early on, so test a few values. The starting values are examples only, not benchmarks.
Enter your customer numbers
The starting values are examples. Calculations stay in your browser.
Lifetime value here is gross profit, not revenue, and it is not discounted for time. Churn from a few months of data can move a lot. It is a planning number from your inputs, not a forecast.
How the calculation works
- Gross profit per customer per month = revenue per customer per month × gross margin % ÷ 100.
- Average customer lifetime in months = 100 ÷ monthly churn %.
- Lifetime value (LTV) = gross profit per customer per month × average lifetime in months.
- Cost to acquire a customer (CAC) = sales and marketing spend per month ÷ new customers per month.
- LTV to CAC ratio = LTV ÷ CAC.
- Months to earn back CAC = CAC ÷ gross profit per customer per month.
The result is a planning scenario from the numbers you enter. It is not a forecast, a quote or tax advice.
Questions
What is customer lifetime value?
It is the total gross profit you expect from an average customer before they stop buying. This calculator uses gross profit, not revenue, because revenue alone hides the cost of serving the customer.
Why does churn change the result so much?
Average lifetime is 100 divided by monthly churn, so halving churn doubles lifetime and lifetime value. With only a few months of data, one or two cancellations can move churn a lot. Try a higher churn to see a cautious case.
What ratio should I aim for?
There is no single right number for every business. Compare the payback months with how long your cash can carry the spend, and check that LTV is comfortably above CAC after your fixed costs. Use the cash runway calculator to see how long you can fund acquisition before it pays back.
What counts as sales and marketing spend?
Everything you spend to win new customers in a month: ads, referral rewards, promotional materials, lead lists, and the cost of anyone paid to sell. Include your own time only if you want CAC to reflect it.
Can I put this calculator on my website?
Yes. Copy the embed code on this page. The embedded version keeps a small credit link to BizAI.
Embed this calculator
Add this free calculator to your blog, course or client resources. Paste the code into an HTML block. It is free to use and keeps a small credit link to BizAI.
Use it with a real business idea
Each of our business idea guides loads this kind of calculator with an example budget and price for that business. Other free tools: Small Business Profit CalculatorBreak-Even CalculatorMarkup and Margin CalculatorHourly Rate CalculatorSmall Business Loan CalculatorStartup Cost CalculatorEvent Pricing CalculatorCash Runway Calculator.