# CAC and LTV Calculator

> Computes customer acquisition cost from marketing spend and new customers, customer lifetime value from monthly revenue per customer, gross margin and monthly churn (lifetime = 1 / churn), plus the LTV:CAC ratio and CAC payback period in months.

- Calculator id: `cac-ltv` · Category: Business & Marketing (`business`) · Tool name: `calculate_cac_ltv`
- Canonical page: https://tttkmbb.com/business/cac-ltv · This document: https://tttkmbb.com/business/cac-ltv.md · JSON definition: https://tttkmbb.com/business/cac-ltv.json

## Purpose

Computes customer acquisition cost from marketing spend and new customers, customer lifetime value from monthly revenue per customer, gross margin and monthly churn (lifetime = 1 / churn), plus the LTV:CAC ratio and CAC payback period in months.

**Use when:** You need SaaS or subscription unit economics: how much a customer costs to acquire, what they are worth over their lifetime, and how the two compare.

**Do not use when:** Customers buy once rather than recur (LTV then equals margin per order × repeat purchases) or you only need the churn rate itself (use churn-rate).

## Input

| Parameter | Type | Unit | Required | Description |
| --- | --- | --- | --- | --- |
| `marketing_spend` | number |  | required | Total acquisition spend in the period (ads, sales salaries, tools). (min 0, max 1000000000000) |
| `new_customers` | integer |  | required | Customers won in the same period. (> 0, max 1000000000) |
| `monthly_revenue_per_customer` | number |  | required | Average revenue per customer per month (ARPU / ARPA). (> 0, max 1000000000) |
| `gross_margin_percent` | number | % | optional, default 100 | Gross margin on that revenue. Use 100 for a revenue-based LTV. (> 0, max 100) |
| `monthly_churn_percent` | number | % | required | Share of customers lost per month; lifetime = 1 / churn. (> 0, max 100) |

## Output

| Field | Type | Unit | Description |
| --- | --- | --- | --- |
| `cac` | number |  | marketing_spend / new_customers. |
| `monthly_gross_profit_per_customer` | number |  | monthly_revenue_per_customer × gross_margin. |
| `customer_lifetime_months` | number | months | 1 / (monthly_churn_percent / 100). |
| `ltv` | number |  | monthly gross profit per customer × customer lifetime. |
| `ltv_to_cac_ratio` | number |  | ltv / cac; 3 or more is the usual benchmark for a healthy subscription business. |
| `cac_payback_months` | number | months | cac / monthly gross profit per customer. |
| `assessment` | string |  | Comparison of the ratio with the common 3:1 benchmark. |

## Formula

`CAC = marketing_spend / new_customers; lifetime_months = 100 / monthly_churn_percent; LTV = monthly_revenue_per_customer × gross_margin_percent/100 × lifetime_months; ratio = LTV / CAC; payback_months = CAC / (monthly_revenue_per_customer × gross_margin_percent/100)`

Simple (undiscounted) LTV with constant churn and revenue; the 1/churn lifetime is the expected lifetime of a geometric survival process. Discounting future margin or including expansion revenue would change the value.

## Data Sources

- Wikipedia – Customer lifetime value — https://en.wikipedia.org/wiki/Customer_lifetime_value (reference, retrieved 2026-09-24)
- Wikipedia – Customer acquisition cost — https://en.wikipedia.org/wiki/Customer_acquisition_cost (reference, retrieved 2026-09-24)
- Andreessen Horowitz – 16 Startup Metrics — https://a16z.com/16-startup-metrics/ (reference, retrieved 2026-09-24)

Data freshness: `static`. Deterministic formula with fixed constants; results never go stale. Inputs supplied by the caller determine the output.

## API

- `GET https://tttkmbb.com/api/v1/calculate/cac-ltv?marketing_spend=…&new_customers=…&monthly_revenue_per_customer=…&monthly_churn_percent=…`
- `POST https://tttkmbb.com/api/v1/calculate/cac-ltv` with JSON body `{"inputs": {…}}`
- Response: unified envelope (`success`, `request`, `result.values`, `result.units`, `sources`, `freshness`, `timestamp`, `next_actions`, `links`); see https://tttkmbb.com/docs/response-format.md
- Schema: https://tttkmbb.com/api/v1/calculators/cac-ltv · OpenAPI operationId `calculate_cac_ltv` in https://tttkmbb.com/openapi.json
- Authentication: none. Rate limit: fair use, see https://tttkmbb.com/docs/rate-limits.md.

## MCP

- Server: `https://tttkmbb.com/mcp` (Streamable HTTP, JSON-RPC 2.0, no auth)
- Tool:  `run_calculator` with `{"calculator_id": "cac-ltv", "inputs": {…}}`

## Example

- Spend 10,000 / 100 customers, ARPU 50, 80 % margin, 5 % churn: inputs `{"marketing_spend":10000,"new_customers":100,"monthly_revenue_per_customer":50,"gross_margin_percent":80,"monthly_churn_percent":5}` → `{"cac":100,"monthly_gross_profit_per_customer":40,"customer_lifetime_months":20,"ltv":800,"ltv_to_cac_ratio":8,"cac_payback_months":2.5}`
- Spend 60,000 / 150 customers, ARPU 30, 70 % margin, 4 % churn: inputs `{"marketing_spend":60000,"new_customers":150,"monthly_revenue_per_customer":30,"gross_margin_percent":70,"monthly_churn_percent":4}` → `{"cac":400,"customer_lifetime_months":25,"ltv":525,"ltv_to_cac_ratio":1.31,"cac_payback_months":19.05}`

```
GET https://tttkmbb.com/api/v1/calculate/cac-ltv?marketing_spend=10000&new_customers=100&monthly_revenue_per_customer=50&gross_margin_percent=80&monthly_churn_percent=5
```

## Limitations

Customers buy once rather than recur (LTV then equals margin per order × repeat purchases) or you only need the churn rate itself (use churn-rate). Simple (undiscounted) LTV with constant churn and revenue; the 1/churn lifetime is the expected lifetime of a geometric survival process. Discounting future margin or including expansion revenue would change the value. All values are computed from the formula above; no measurement or live data is involved.

## FAQ

**Why is lifetime 1 / churn?**

If 5 % of customers leave every month, the expected time a customer stays is 1 / 0.05 = 20 months. This assumes churn is constant over time.

**Should LTV use revenue or gross margin?**

Gross margin, because only margin can repay acquisition cost. Revenue-based LTV (gross_margin_percent = 100) overstates value for low-margin businesses.

## Related

- [Churn Rate Calculator](https://tttkmbb.com/business/churn-rate.md) — Compute the monthly churn rate from customer counts.
- [MRR Growth Calculator](https://tttkmbb.com/business/mrr-growth.md) — Project recurring revenue growth.
- [ROAS Calculator](https://tttkmbb.com/business/roas.md) — Return on the advertising part of acquisition spend.