--- title: "CAC and Customer Lifetime Value Calculator | Product Metrics" description: "Free CAC calculator with customer lifetime value: enter acquisition spend, new customers, order value, margin and repeat rate to get CAC, LTV, LTV:CAC and payback." canonical: "https://www.productmetrics.io/cac-ltv-calculator" pageType: feature language: en publisher: "Product Metrics" author: "Berend Vrakking" dateModified: 2026-10-28 --- > Content index: https://www.productmetrics.io/llms.txt # CAC and customer lifetime value calculator This calculator turns your acquisition spend and customer behaviour into your customer acquisition cost (CAC), customer lifetime value (LTV), the LTV:CAC ratio and the months a customer takes to pay back their CAC. LTV is shown on revenue and on profit; the ratio and the payback use profit. _LTV:CAC, payback and profit after CAC use profit (order value × margin), not revenue. Lifespan and orders per year are your assumptions, so the results are a projection, not a prediction._ ## Every step behind the numbers, worked through for the start values. Illustrative data. An example shop spent €10,000.00 to win 125 new customers. A customer places 2 orders a year at €75.00 excl. VAT, with a gross margin of 40%, and keeps buying for 3 years. | Step | Calculation | Result | | --- | --- | --- | | CAC | €10,000.00 ÷ 125 new customers | €80.00 | | Revenue per customer per year | €75.00 × 2 orders | €150.00 | | LTV on revenue | €150.00 × 3 years | €450.00 | | LTV on profit | €450.00 × 40% | €180.00 | | LTV:CAC | €180.00 ÷ €80.00 | 2.25 | | Profit per customer per month | €75.00 × 40% × 2 orders ÷ 12 | €5.00 | | CAC payback | €80.00 ÷ €5.00 | 16 months | | Profit after CAC | €180.00 − €80.00 | €100.00 | A new customer cost €80.00 and brings €180.00 of profit over 3 years, so €100.00 is left after winning them: an LTV:CAC of 2.25. The €80.00 is back after 16 months. On revenue the same customer looks worth €450.00, but that is not what you keep, so the ratio uses the €180.00 of profit. ## Six numbers, and the decision each one informs. - **CAC.** Acquisition spend ÷ new customers: what winning one customer costs. Decision: how much you can spend to win the next one. - **LTV on revenue.** Order value × orders per year × lifespan. It ignores what the products cost, so it overstates what a customer is worth. Decision: none on its own; read it next to the LTV on profit. - **LTV on profit.** LTV on revenue × gross margin: the profit a customer brings over their lifespan. It is also the most you can pay to win them. Decision: your ceiling for CAC. - **LTV:CAC.** LTV on profit ÷ CAC. 1 is break-even: the customer repays what they cost and nothing more. Decision: whether acquisition pays, and how much profit is left to cover overheads. - **CAC payback.** CAC ÷ profit per customer per month: how long a customer takes to earn back their cost. Decision: how long cash stays tied up in new customers. - **Profit after CAC.** LTV on profit − CAC: what is left per customer once they are won. Decision: whether to increase or lower the acquisition budget. This calculator works on one average customer. Product Metrics shows nCAC per product and as an average. - [How Product Segmentation works](https://www.productmetrics.io/product-segmentation) - [How Full Signal Tracking works](https://www.productmetrics.io/server-side-tracking) ## What an LTV:CAC ratio cannot tell you, and what to check next to it. - **What a customer will do.** Orders per year and lifespan are assumptions, not predictions. Use one acquisition cohort, including one-time buyers, and align the frequency and lifespan measurement. The shortcut 1 ÷ (1 − annual retention) assumes a constant annual retention rate. - **What the margin leaves out.** A gross margin ignores shipping, payment fees and returns. Use the contribution margin for a stricter LTV, especially if returns are high. - **Which customers are worth most.** One average can hide that customers who start with one product come back more often than customers who start with another. Compare new customers by first product before you trust a single number. - **How accurate the inputs are.** Product Metrics is not an attribution tool. CAC depends on the new customers and spend your shop and ad platform recorded. ## CAC and LTV questions, answered. ### What is a good LTV:CAC ratio? Measure it on profit. Above 1, a customer repays what they cost to win. How far above depends on your overheads and how long you can wait: keeping half of a customer's lifetime profit after acquisition needs a ratio of 2, and two thirds needs 3. At the example's 2.25 you keep 55.56% of lifetime profit before fixed costs. A ratio of 3 is a common SaaS rule of thumb that we haven't verified for ecommerce. ### How do you calculate customer lifetime value? Multiply average order value by orders per year and by lifespan in years for LTV on revenue: €75.00 × 2 × 3 = €450.00. Multiply by gross margin for LTV on profit: €450.00 × 40% = €180.00. For a constant annual retention model, estimated lifespan is 1 ÷ (1 − annual retention). Use retention from the same acquisition cohort. At 60% retention that is 2.5 years, and the same customer is worth €150.00 in profit. ### How is the CAC payback period calculated? Divide CAC by the profit a customer earns per month. Profit per month is order value × margin × orders per year ÷ 12, so €80.00 ÷ €5.00 = 16 months. It assumes orders spread evenly through the year. If a customer's first order carries most of the profit, real payback is faster. A payback longer than the lifespan (36 months here) means the customer never repays their cost. ### What counts as acquisition spend? Ad and marketing spend that won new customers in the period. All marketing spend divided by new customers gives a fully loaded CAC; ad spend alone is closer to nCAC, the cost of a new customer in ads. Pick one and keep it the same each period, and count only customers who had not bought before: dividing by all orders gives cost per order, not CAC. ## Embed this calculator Paste this script tag into your own page to show the calculator there, with the same maths and no sign-up. It fits the width of your page, resizes with the calculator and follows the visitor’s light or dark setting. The script adds the calculator and a link to the full version under it. Keep the attribution link: it credits the calculator. `` ## Related pages. - [LTV:CAC ratio for ecommerce](https://www.productmetrics.io/blog/ltv-cac-ratio-ecommerce): Why LTV has to be profit, and how to derive your own ratio. - [Customer acquisition cost for ecommerce](https://www.productmetrics.io/blog/customer-acquisition-cost-formula): What a new customer costs, and what you can pay for one. - [Predicted LTV (pLTV)](https://www.productmetrics.io/blog/predicted-ltv): How predicted LTV differs from the observed LTV used here. - [CAC berechnen (German)](https://www.productmetrics.io/de/blog/cac-berechnen): Customer acquisition cost in German, with break-even nCAC. - [MER and nCAC calculator](https://www.productmetrics.io/mer-calculator): Marketing efficiency and the cost of a new customer from account totals. - [Contribution margin calculator](https://www.productmetrics.io/contribution-margin-calculator): The margin to enter above, after shipping, fees and returns. - [CAC](https://www.productmetrics.io/glossary/cac): Customer acquisition cost, defined, with an example. - [CAC vs CPA](https://www.productmetrics.io/glossary/cac-vs-cpa): Why spend per new customer and spend per order differ. - [Cohort analysis](https://www.productmetrics.io/glossary/cohort-analysis): Check lifespan and orders per year against real customers. - [Repeat purchase rate](https://www.productmetrics.io/glossary/repeat-purchase-rate): How often customers come back. - [Margin calculator](https://www.productmetrics.io/margin-calculator): Gross margin and markup from cost and price. - [Product Segmentation](https://www.productmetrics.io/product-segmentation): Segment products by advertising clicks and return. ## See which products perform, and which don’t. Product Metrics segments your products by advertising clicks and return against your target, then writes each segment to a Merchant Center label your campaigns use. - [Analyse your products for free](https://app.productmetrics.io/): Log in with Google, no credit card --- Written by Berend Vrakking, founder of Product Metrics. Last updated 2026-10-28. HTML version: https://www.productmetrics.io/cac-ltv-calculator