Free LTV Calculator — Customer Lifetime Value & Max CAC
Enter what a customer buys, how often, for how long, and at what margin. We calculate their true lifetime value — and the most you should sensibly pay to acquire one.
Fill in all four fields to see lifetime value and your max CAC.
The 3:1 LTV-to-CAC ratio is a widely used heuristic, not a law — cash flow and payback period matter too. Want us to hit these numbers for you?
Common questions
What is customer lifetime value (LTV)?
LTV is the total gross profit one customer generates over their entire relationship with your business. This calculator computes it as average purchase value × purchases per year × years retained × gross margin. It tells you what a customer is really worth beyond their first sale.
How much should I pay to acquire a customer?
The widely used heuristic is to keep customer acquisition cost (CAC) at or below one-third of LTV — a 3:1 LTV-to-CAC ratio. If a customer is worth $900 in lifetime gross profit, that suggests spending up to about $300 to acquire them. Much below 2:1 you are likely losing money; far above 3:1 you may be under-investing in growth.
Why use gross margin instead of revenue for LTV?
Revenue-based LTV overstates what a customer is worth, because it ignores what it costs you to deliver. Margin-based LTV measures actual profit, which is the number you can genuinely spend against. Comparing revenue LTV to acquisition cost is how businesses talk themselves into unprofitable ad spend.
Want us to hit these numbers for you?
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