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Lead Gen Calculator

LTV:CAC Ratio Calculator

Compare lifetime value to acquisition cost to see whether your unit economics can support scaling spend.

LTV : CAC ratio0.00 : 1

What is the LTV:CAC ratio?

The LTV:CAC ratio compares how much a customer is worth over their lifetime (LTV) to how much it costs to acquire them (CAC). It’s the clearest single read on whether your growth engine is profitable — and how hard you can press the accelerator.

How to read your ratio

  • Below 1:1 — you lose money on every customer. Fix economics before scaling.
  • 1:1 to 3:1 — workable but thin; focus on efficiency and retention.
  • ~3:1 — the classic healthy, scalable target.
  • Above 5:1 — very efficient; you may be underinvesting in growth.

How to improve your LTV:CAC ratio

You move the ratio from both sides: raise LTV (better retention, expansion revenue, higher margins) and lower CAC (better targeting, higher conversion rates, faster lead response, and automation that does the follow-up work for you). Small, compounding improvements on each side change the math dramatically.

Frequently asked questions

  • How do you calculate the LTV:CAC ratio?

    Divide customer lifetime value by customer acquisition cost. If LTV is $4,500 and CAC is $1,250, your ratio is 3.6:1.

  • What is a good LTV:CAC ratio?

    Around 3:1 is the widely-cited target — you earn roughly three times what it costs to acquire a customer. Below 1:1 is unsustainable; far above 5:1 can mean you’re underinvesting in growth.

  • Should LTV use revenue or gross profit?

    Use gross profit (revenue minus cost of goods/service). Revenue-based LTV overstates the ratio because it ignores the cost of actually delivering to the customer.

  • My ratio is high — should I spend more?

    Often yes. A very high ratio can signal you’re leaving growth on the table by underspending on acquisition. The goal is efficient scale, not the highest possible ratio.

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