Unit Economics, CAC · LTV · LTV:CAC · Payback

Calculates customer acquisition cost, customer lifetime value, the LTV:CAC ratio, and the CAC payback period for a subscription business. Inputs are monthly revenue per customer, gross margin, monthly churn, sales and marketing spend, and new customers per month.

Interactive Tool

Revenue per customer / mo

Gross margin

Monthly churn

Sales & marketing / mo

New customers / mo

CAC

$2,000

cost to win one customer

Avg lifespan

35.7 mo

1 ÷ monthly churn

LTV

$5,714

ARPU × margin × lifespan

CAC payback

12.5 mo

< 12 mo strong · > 18 risky

LTV : CAC

2.86 : 1

Below the 3:1 SaaS benchmark

Churn is the silent killer: nudge monthly churn from 2.8% to 6% and watch lifespan roughly halve, dragging LTV:CAC toward break-even while price, margin, and CAC never move.

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This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.

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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.