You know what a customer costs to acquire. Do you know what they're worth before you spend it? Enter five numbers and see your true lifetime value, your ratio, and how fast each customer pays you back.
Customer LTV · LTV to CAC ratio · CAC payback months
LTV here is gross-profit based: AOV times margin times purchases per year times lifespan. It ignores discounting future cash and assumes steady repeat behavior, so treat it as a planning estimate, not a guarantee.
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Most founders obsess over CAC. They watch it daily, sweat every uptick, and cap their ad spend the second it climbs. Half the equation, watched like a hawk.
The other half, what a customer is actually worth, sits in the dark. And that half is what sets your ceiling. A brand that knows a customer is worth two hundred dollars can outbid, outspend, and outgrow a competitor who only sees the forty dollar CAC and panics. When LTV to CAC is healthy, more spend is more profit. When it's underwater, more spend just digs the hole faster.
This calculator puts both halves side by side, adds the payback months, and tells you which situation you're actually in.
AOV, gross margin, purchases per year, CAC, and how long a customer stays with you.
LTV uses gross profit, not revenue, because profit is the only thing you can spend on acquisition.
Your ratio with a health read, the months until payback, and the profit you make on the very first order.
Multiply your average order value by your gross margin, then by purchases per year, then by how many years they stay. That gives the gross profit a customer delivers across their whole life with you, which is the number that decides what you can spend to acquire them.
Around three to one is the healthy zone. Below one you lose money on every customer. Between one and three is tight but workable. Above five often means you're underspending on acquisition and leaving growth on the table.
CAC payback is how many months of gross profit it takes to earn back what you spent to acquire a customer. Shorter payback means your cash comes back faster, so you can reinvest sooner and grow without running out of cash.
Because you can only spend profit on acquisition, not revenue. A customer who buys a thousand dollars at ten percent margin is worth far less than one who buys five hundred at sixty percent. Margin-based LTV keeps you from overpaying.
LTV is AOV times margin times repeat rate, and your product page moves all three. A weak page caps your order value, kills the repeat, and leaks profit on every visit. Run the free Profit Audit and see exactly where yours leaks, in dollars, with the fixes ranked.
Run My Free Profit Audit → Takes about 2 minutes. You get the exact fixes, not a sales pitch.