What This Calculator Does
Evaluate customer acquisition costs (CAC), customer lifetime value (LTV), and total campaign LTV:CAC unit economics for paid ads and e-commerce marketing.
How to Use This Calculator?
- Select mode tab: Customer Acquisition Cost (CAC) or Customer Lifetime Value (LTV).
- For CAC: Enter Marketing Channel Spend, Direct Sales Costs, and New Customers Acquired.
- For LTV: Enter Average Order Value (AOV), Annual Purchase Frequency, Lifespan Years, and Gross Margin %.
- View calculated CAC, Net LTV, Gross LTV, and the live combined LTV:CAC ratio benchmark assessment.
Formula & Calculation Logic
CAC = (Marketing Spend + Sales Costs) / New Customers | Gross LTV = AOV * Frequency * Lifespan | Net LTV = Gross LTV * (Gross Margin / 100) | LTV:CAC Ratio = Net LTV / CAC
Worked Example & Walkthrough
CAC Mode: Marketing Spend = $20,000, Sales Costs = $5,000, New Customers = 250 => CAC = $100. LTV Mode: AOV = $80, Frequency = 4 purchases/yr, Lifespan = 3 yrs, Gross Margin = 70% => Gross LTV = $960, Net LTV = $672. Combined LTV:CAC Ratio = 6.72x (Strong Campaign Profitability).
In-Depth Comprehensive Guide
Marketing Customer Acquisition Cost (CAC) & Lifetime Value (LTV) Guide
Unit economics determine the commercial success of paid advertising and e-commerce campaigns. The Marketing CAC & LTV Calculator helps marketing managers evaluate customer acquisition cost efficiency and total net lifetime gross profit per acquired customer.
Note on Distinction: This tool is specifically tailored for digital ad campaigns, performance media channels, and e-commerce unit economics. It is distinct from corporate SaaS tools like the Startup CAC Calculator, focusing on media spend, purchase frequency, and campaign profitability.
Key Customer Unit Metrics
- Customer Acquisition Cost (CAC):
(Marketing Spend + Direct Sales Spend) ÷ New Customers Acquired - Customer Lifetime Value (LTV):
Average Order Value × Annual Purchase Frequency × Lifespan Years × Gross Margin % - LTV:CAC Ratio:
Net LTV ÷ CAC— A healthy target benchmark is 3.0x or higher.
Worked Example
- CAC: Marketing Spend = $20,000, Sales Spend = $5,000, New Customers = 250. CAC = $25,000 ÷ 250 = $100.
- LTV: AOV = $80, Frequency = 4/yr, Lifespan = 3 yrs, Gross Margin = 70%. Gross LTV = $960, Net LTV = $960 × 0.70 = $672.
- LTV:CAC Ratio: $672 ÷ $100 = 6.72x (Highly Profitable Channel Performance).
Frequently Asked Questions (FAQ)
User Reviews & Ratings
No reviews submitted yet. Be the first to leave a review above!