Acquisition calculator

Customer Acquisition Cost & LTV Calculator

Connect fully loaded acquisition cost with gross-profit lifetime value.

Reviewed Jul 24, 2026

By the ROI Calculator Hub editorial team

Your assumptions

Currency

Marketing spend

Media, creative, tools, agencies, and marketing labor.Sales acquisition cost

Sales labor, commissions, and tools attributable to new customers.New customers

Deduplicated first-time customers from the same period.Average order value

Average revenue per purchase.Purchases per customer per year

Expected annual order frequency for the acquired cohort.Gross margin

Use contribution margin when variable costs are available.Annual customer churn

Expected share of active customers lost each year.

Estimated result

LTV:CAC ratio

6.61:1

Estimated CAC is $70, gross-profit LTV is $463, and payback takes 5.2 months.

Decision check: Lifetime gross profit covers CAC at least three times

Fully loaded CAC: $70
Gross-profit LTV: $463
CAC payback period: 5.2 months
Annual gross profit per customer: $162

Three-case comparison

Downside applies an unfavorable 10% change to key drivers. Upside applies a favorable change.

Case	LTV:CAC ratio
Downside	3.59:1
Current	6.61:1
Upside	11.95:1

Sensitivity check

Estimated primary-result improvement from a favorable 10% change in one driver.

New customers+10.0%
Average order value+10.0%
Purchases per customer per year+10.0%
Gross margin+10.0%

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Decision scope

What this calculator answers

Customer acquisition cost is useful only when its cost scope and customer count are consistent. This calculator combines marketing and sales acquisition expense, then compares fully loaded CAC with a gross-profit lifetime value estimate. It also reports payback time so a strong-looking lifetime ratio does not hide near-term cash pressure.

Transparent math

How the calculation works

LTV:CAC = Gross-profit customer lifetime value ÷ Fully loaded acquisition cost

Fully loaded CAC divides marketing and sales acquisition cost by deduplicated new customers. Annual customer gross profit equals order value multiplied by annual purchase frequency and margin. The model estimates customer lifetime as the reciprocal of annual churn, then multiplies it by annual gross profit. LTV:CAC and payback are calculated from those values.

Worked example

Put the result in context

A business spends $50,000 on marketing and $20,000 on acquisition-focused sales activity to win 1,000 new customers, producing a $70 CAC. If each customer generates three $90 purchases per year at 60% margin and annual churn is 35%, the model estimates gross-profit LTV and the number of months needed to recover CAC.

Methodology

Make the estimate defensible

01Include marketing and sales costs required to acquire the measured cohort.
02Use first-time customers rather than orders or total active customers.
03Base retention and purchase frequency on cohort evidence rather than company-wide averages.

Interpretation

What counts as a good result?

A high LTV:CAC ratio can indicate room to invest, but it can also reflect understated costs or optimistic retention. Evaluate the ratio together with payback period, cash availability, cohort quality, and marginal CAC. Compare channels using the same cost definitions and the same new-customer rules.

Read before deciding

Limitations

The reciprocal-churn lifetime model assumes a stable churn rate over time.
Discount rates, expansion revenue, and changing margins are not modeled.
Blended CAC can hide large differences between paid, organic, partner, and sales-led acquisition.

How this calculator is reviewed

We test the formula against worked examples, document which costs belong in the model, and state where attribution or timing can distort the result. Read our calculation and editorial methodology.

Common questions

Frequently asked questions

What should be included in CAC?

Include media, creative, agencies, acquisition tools, sales commissions, and attributable marketing and sales labor for the same period.

Should LTV use revenue or gross profit?

Gross-profit LTV is more decision-useful because product or service delivery costs cannot be spent again on acquisition.

What is a good LTV:CAC ratio?

There is no universal threshold. Capital availability, payback time, retention confidence, growth stage, and channel scalability all matter.

Why can a good ratio still create a cash problem?

Lifetime value may arrive over years while acquisition cost is paid immediately. Payback period exposes that timing difference.

Continue the analysis