CAC & LTV Calculator
Work out fully-loaded customer acquisition cost, lifetime value, and payback period in one sheet, then benchmark the ratio against deal size to see if your growth engine actually makes money.
How to use it
Pull your actual quarterly S&M spend and new-customer count into Part 1, your ARPA/margin/churn into Part 2, then read the ratio and payback period against the benchmark tables to see whether your growth engine is efficient, borderline, or burning cash.
What's inside
- CAC formula with a fully-loaded cost checklist (what to include and exclude)
- Fully worked CAC example
- LTV formula (ARPA × gross margin × customer lifespan)
- Fully worked LTV example
- LTV:CAC ratio interpretation table
- CAC Payback Period formula with a healthy-range table
- Segmented CAC table by channel and deal size
- Blank fill-in calculator for your own numbers
- Red-flag checklist to run when the ratio looks suspiciously good
Purpose: CAC and LTV are simple in theory and almost always calculated wrong in practice, usually by leaving costs out of CAC or padding LTV with revenue that never actually gets collected. This sheet spells out every input so nothing gets quietly omitted.
Part 1: Customer Acquisition Cost (CAC)
CAC = Total fully-loaded Sales & Marketing cost in period ÷ Number of new customers acquired in that period
Fully-loaded S&M cost must include:
- All sales team salaries, commissions, and bonuses (fully loaded, including benefits/payroll tax, typically salary × 1.25–1.3)
- All marketing team salaries
- Paid advertising and campaign spend
- Sales & marketing tools/software (CRM, MAP, sales engagement, ad platforms)
- Content production costs (freelancers, agencies)
- Events, sponsorships, travel for sales
- SDR/BDR team cost if separate from AE team
Do NOT include: customer success/onboarding cost (that belongs on LTV's cost side, not CAC), product/engineering cost, general G&A.
Worked example: CAC
| Input | Amount |
|---|---|
| Sales team fully-loaded cost (quarter) | £180,000 |
| Marketing team fully-loaded cost (quarter) | £90,000 |
| Paid ad spend (quarter) | £60,000 |
| Sales/marketing tools (quarter) | £15,000 |
| Content & events (quarter) | £25,000 |
| Total S&M cost | £370,000 |
| New customers acquired (quarter) | 74 |
| CAC | £370,000 ÷ 74 = £5,000 |
Part 2, Lifetime Value (LTV)
LTV = (Average Revenue per Account per period × Gross Margin %) × Average Customer Lifespan (same period units)
Where: Average Customer Lifespan = 1 ÷ Churn Rate
Worked example, LTV
| Input | Amount |
|---|---|
| Average revenue per account (monthly) | £850 |
| Gross margin | 80% |
| Monthly logo churn rate | 2% |
| Average customer lifespan | 1 ÷ 0.02 = 50 months |
| LTV | £850 × 0.80 × 50 = £34,000 |
Part 3: LTV:CAC Ratio
LTV:CAC Ratio = LTV ÷ CAC
Using the worked examples above: £34,000 ÷ £5,000 = 6.8:1
| Ratio | Interpretation |
|---|---|
| Below 1:1 | Losing money on every customer: unsustainable |
| 1:1: 3:1 | Inefficient: spending too much to acquire relative to value returned |
| 3:1: 5:1 | Healthy, sustainable growth economics |
| Above 5:1 | Efficient: but check you're not under-investing in growth (see red flags below) |
Part 4: CAC Payback Period
CAC Payback (months) = CAC ÷ (Average Monthly Revenue per Account × Gross Margin %)
Using the worked example: £5,000 ÷ (£850 × 0.80) = £5,000 ÷ £680 = 7.4 months
| Payback period | Interpretation |
|---|---|
| Under 12 months | Healthy for most B2B SaaS |
| 12–18 months | Acceptable for enterprise/longer sales cycles |
| Over 18 months | Cash-flow risk: you're funding growth out of runway, not repeat revenue |
Part 5, Segment your CAC
A single blended CAC hides which channels/segments are actually efficient. Recalculate CAC separately for:
| Segment | New Customers | Allocated S&M Cost | CAC |
|---|---|---|---|
| Inbound/organic | |||
| Paid acquisition | |||
| Outbound/SDR-sourced | |||
| Partner/referral | |||
| Enterprise segment | |||
| SMB segment |
Benchmark by deal size: a £34,000 LTV enterprise account can absorb a much higher CAC than a £3,000 LTV SMB account; blending them together produces a ratio that's meaningless for budget decisions.
Blank calculator: fill in your own numbers
CAC inputs
- Total S&M cost (period): ______
- New customers acquired (period): ______
- CAC = ______
LTV inputs
- Average revenue per account (period): ______
- Gross margin %: ______
- Churn rate (period): ______
- Average lifespan = 1 ÷ churn rate = ______
- LTV = ______
- LTV:CAC Ratio = ______
- CAC Payback = ______ months
Red flags to check when the ratio "looks too good" (above 5:1)
- Is CAC actually fully loaded, or are salaries/tools being left out?
- Is churn rate measured over a long enough period to be reliable (avoid using a single good month)?
- Is the company under-investing in growth relative to available cash: a very high ratio can mean "we could be spending more to grow faster," not just "we're efficient"