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.
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"
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.