SMB Tools / LTV : CAC Calculator

Can you afford to grow faster?

Growth comes down to one comparison: what a customer is worth over their lifetime versus what they cost to win. See the ratio and how fast you earn the cost back, so you know whether to push harder on acquisition.

What this means
What moves it
At these numbers the cost per customer could rise to $180 and still hold 3:1; that is the room in the ratio.
What to check
Retention is the number most owners overstate: if customers stay 30% less than you think the ratio is 2.3 : 1. Measure it from real repeat orders after three months.
Where this goes next
Save it, then choose the loyalty or marketing vendor the plan names and measure the cost per customer the same way every month. Open →

Worked out from the numbers on this page. A description of the math and an estimate, not advice; what to do is your call, with your adviser.

Each customer

Average order value
$
Purchases per year
Gross margin
%
How you track retention
Average customer lifespan
years
Lifetime gross profit per customer$540

Acquisition cost

Sales + marketing spend
$
New customers acquired
Cost to acquire a customer$167
LTV : CAC ratio
3.2 : 1
$540 lifetime profit per customer against $167 to win one
Healthy2.3 : 1 if they stay 30% less

A healthy 3.2 : 1: customers return comfortably more than they cost, and it holds at 2.3 : 1 even if they stay 30% less. You could pay up to $180 per customer and still be at 3:1, so there is room to invest in acquisition.

Lifetime value
$540
Acquisition cost
$167
CAC payback
5.6 mo
Most you can pay per customer at 3:1
$180
Order value × purchases/yr × margin$360/yr
× 1.5 year lifespan$540
Cost to acquire-$167
Return per customer3.2 : 1

A directional self-assessment estimate, not advice on what to spend; real lifetime value hinges on retention, which is hard to predict. Check campaign payback in the Marketing ROI tool →