LTV to CAC Calculator: calculate ltv to cac for your business. Formula, benchmarks, and practical tips included.
Customer LTV = ARPU × Gross Margin % × Customer Lifetime. Where Customer Lifetime = 1 ÷ Monthly Churn Rate. At 2% monthly churn, lifetime = 50 months. At 5% churn, lifetime = 20 months — a 2.5× difference in LTV for the same ARPU and margin.
CAC = (Monthly Sales & Marketing Spend ÷ New Customers per Month) + Onboarding Cost per Customer. Blended CAC includes all sales costs — salaries, commissions, marketing budget, tools, events, and management overhead — divided by the number of new paying customers. Add per-customer onboarding and implementation costs for the true fully-loaded CAC.
Worked example: ARPU £79/mo, gross margin 70%, monthly churn 2%. LTV = £79 × 0.70 × 50 = £2,765. CAC = (£15,000/30) + £200 = £700. LTV:CAC = £2,765 ÷ £700 = 3.95:1 (healthy). CAC payback = £700 ÷ (£79 × 0.70) = 12.6 months.