Monthly revenue from a typical customer
Typical SaaS: 70–85%. Enter as percentage (e.g. 80)
Percentage of customers lost per period
Total cost to acquire one customer (optional — needed for LTV:CAC)
Enter Your Business Metrics
Select a formula model and fill in your revenue, margin, and churn figures to see your Customer Lifetime Value, LTV:CAC ratio, cohort projection, and more.
How to Use This Calculator
Choose Your Formula Model
Select the tab that matches your business type at the top of the calculator. Use SaaS/Subscription if you charge a recurring monthly fee, Simple/eCommerce if customers make discrete purchases, or DCF/Traditional for an academically rigorous approach that discounts future cash flows. You can also apply a Business Model Preset to populate sensible default values instantly.
Enter Revenue and Margin Inputs
For SaaS, enter your Average Revenue Per User (ARPU) per month and Gross Margin percentage. If you have your total MRR and subscriber count instead of a per-user figure, toggle the MRR helper to calculate ARPU automatically. For eCommerce, enter Average Order Value, annual purchase frequency, typical customer lifespan in years, and gross margin. For DCF, enter the annual profit contribution per customer, retention rate, and your cost of capital as the discount rate.
Add Your CAC for the Full Picture
Enter your Customer Acquisition Cost (CAC) — the total average spend to acquire a single customer, including all marketing, sales, and onboarding costs. This unlocks the LTV:CAC ratio and CAC payback period, which are the most actionable outputs of this calculator. Without CAC, you still get CLV and the cohort projection, but the ratio and payback metrics will be unavailable.
Interpret the Results and Sensitivity Table
Review your CLV hero value, the LTV:CAC ring with benchmark rating, and the 60-month cohort projection chart. The break-even month tells you when cumulative customer revenue crosses your CAC investment. Finally, examine the churn sensitivity table to see how much CLV improves or deteriorates for each half-point or full-point change in churn — this quantifies the dollar value of retention investments before you make them.
Frequently Asked Questions
What is a good LTV:CAC ratio for a SaaS business?
The widely accepted benchmark for a healthy SaaS business is a minimum LTV:CAC ratio of 3:1 — meaning each customer generates at least three times their acquisition cost over their lifetime. Many investors consider 3:1 to 5:1 the ideal operating range: healthy unit economics without leaving too much growth potential on the table. Ratios below 1.5:1 indicate the business is likely losing money on customer acquisition and urgently needs to reduce CAC, improve margins, or reduce churn. Ratios above 5:1 may signal underinvestment in growth — if the economics are this strong, accelerating acquisition spend is usually warranted.
What is the difference between CLV and LTV?
Customer Lifetime Value (CLV), Lifetime Value (LTV), and Customer Lifetime Value (CLTV) are functionally the same metric — all represent the total expected value of a customer relationship over its duration. The terminology varies by industry and team preference: SaaS companies often say LTV, consumer subscription businesses may say CLTV, and academic and consulting contexts tend to use CLV. Some practitioners make a distinction between revenue-based LTV (total spend) and profit-based CLV (total margin contribution), and the profit-based version adjusted for gross margin is generally more useful for strategic decisions because it reflects what actually flows to the bottom line.
How do I calculate CLV if I do not know my churn rate?
If you do not have a measured churn rate, you can estimate customer lifetime directly and work backward. Ask yourself: on average, how many months or years do customers stay? If customers typically stay 2 years, your implied monthly churn is approximately 1 ÷ 24 = 4.2%. For eCommerce businesses without a subscription relationship, use the Simple model: enter your average order value, how many times a year customers typically purchase, and an estimated active relationship length in years. Industry benchmarks for your sector can also provide starting estimates — SaaS typically sees 1.5–3% monthly churn, eCommerce 5–10% monthly, and financial services 1–3% annually.
What does the CAC payback period mean and why does it matter?
The CAC payback period is the number of months it takes for a customer's gross contribution to repay the cost of acquiring them. If your CAC is $800 and each customer generates $67 of gross profit per month, your payback period is approximately 12 months. The industry standard for a healthy SaaS business is 12 months or less; up to 18 months is acceptable if the business has strong retention data and access to capital. Payback periods beyond 24 months are considered high-risk because they require significant upfront capital and expose the business to cash flow problems if growth slows or churn spikes unexpectedly.
Why does gross margin matter in the CLV formula?
Gross margin converts revenue-based CLV into profit-based CLV — the far more meaningful figure for business decisions. Two businesses with identical ARPU and churn can have dramatically different CLVs if their gross margins differ. A SaaS company with 80% gross margin earns $160 of profit per $200 of monthly revenue; a marketplace with 20% gross margin earns only $40. Revenue-based CLV would show the same number for both, while profit-based CLV correctly reflects a 4x difference in value. Always use gross-margin-adjusted CLV when making acquisition investment decisions — otherwise you may significantly overestimate customer value and overspend on CAC.
What is the cohort projection chart showing?
The cohort projection chart shows how cumulative revenue per customer accumulates over 60 months (5 years) for a hypothetical cohort of customers acquired today. The blue area represents the growing cumulative CLV as the cohort continues to generate revenue month by month. The red horizontal line marks your CAC — the point where cumulative CLV first crosses this line is your break-even month, shown in the metrics panel. The gap between the blue line and the red line at month 60 approximates the net profit contribution per acquired customer. This visualization makes it easy to intuitively grasp the economics of a customer relationship and to compare the impact of different churn rate or margin scenarios.