Unit Economics Calculator
Calculate CAC, LTV, LTV:CAC ratio, and payback period. Essential metrics for SaaS and subscription businesses.
Results
- CAC
- $100.00
- LTV
- $800.00
- LTV:CAC ratio
- 8x
- Payback (months)
- 2.5
Healthy unit economics
LTV:CAC of 3x or higher is typically sustainable.
Formulas
CAC is cost per new customer. LTV estimates gross profit per customer over their lifetime (using monthly ARPU and churn). Used by SaaS and subscription businesses.
CAC = Marketing Spend ÷ New Customers\nLTV = (ARPU × Margin %) ÷ Monthly Churn %\nPayback = CAC ÷ (ARPU × Margin %)
Example:
Spend $10k, 100 customers: CAC=$100. ARPU $50/mo, 80% margin, 5% monthly churn: LTV=$800
Frequently Asked Questions
What is a good LTV:CAC ratio?
Generally 3:1 or higher is healthy. Below 1:1 means you spend more to acquire a customer than they're worth.
What is payback period?
Months to recover CAC from gross margin per customer. Under 12 months is typically good for SaaS.
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