Growth Efficiency Analysis
CAC vs LTV Profitability Calculator – Is Your Growth Model Sustainable?
Calculate your LTV:CAC ratio, profit margins, and payback periods to understand whether your customer acquisition strategy drives long-term profit.
CAC vs LTV Profitability Calculator
Analyze your customer acquisition efficiency and long-term profitability
Enter your metrics and click calculate to see results
Understanding CAC vs LTV
Customer Acquisition Cost (CAC) measures what it costs to get a new customer. Lifetime Value (LTV) represents how much that customer is worth over time. A sustainable business usually maintains an LTV:CAC ratio above 3:1.
🧩 Why the LTV:CAC Ratio Matters
1:1 or belowLosing money per customer
2:1–3:1Acceptable for early growth
3:1–5:1Efficient, scalable growth
>5:1Could mean under-investment in marketing
📊 Tips to Improve Profitability
Reduce CAC
Use organic channels, referrals, and content marketing
Increase Retention
Extend customer lifetime through better service
Boost ARPU
Upsell, cross-sell, and optimize pricing
Optimize Pricing
Test different models and value-based pricing
🧮 Sample Calculation
If CAC = $500, ARPU = $100, Gross Margin = 80%, Churn = 5%
- Lifetime = 1 / 0.05 = 20 months
- LTV = 100 × 0.8 × 20 = $1,600
- LTV:CAC = 3.2 → sustainable