Customer Lifetime Value & Unit Economics Calculator
### SaaS Unit Economics: The 3:1 LTV:CAC Golden Rule The **LTV:CAC ratio** compares the gross lifetime profit of a customer to the fully-loaded cost of acquiring them: - **\(\text{LTV:CAC} <.
⚙ Input Values
📊 Results
Embed on Your Website
Copy and paste this code into your website.
<iframe src="https://calcusolve.com/calculator/clv-calculator?embed=true" width="100%" height="600" frameborder="0" loading="lazy" title="Customer Lifetime Value & Unit Economics Calculator"></iframe> ⚖ Scenario Comparison
What This Means For You
Saved Calculations
No saved calculations yet.
Click "Save" to bookmark your current result.
📐 Formula
💡 Practical Example
For example, a subscription software company with $110.00/month ARPU, 75.0% gross margin ($82.50 monthly gross profit), 2.5% monthly churn rate (40.0-month average lifespan), and $650.00 CAC: \(\text{Customer Lifetime Value (LTV)} = \frac{82.50}{0.025} = \mathbf{\$3,300.00}\). The LTV:CAC Ratio is \, delivering +$2,650.00 in net lifetime profit per customer.
📖 About Customer Lifetime Value & Unit Economics Calculator
SaaS Unit Economics: The 3:1 LTV:CAC Golden Rule
The LTV:CAC ratio compares the gross lifetime profit of a customer to the fully-loaded cost of acquiring them:
- LTV:CAC < 1.0x: Losing money on every acquisition (insolvency risk).
- \: The optimal venture growth benchmark for sustainable scaling.
- LTV:CAC > 5.0x: Under-investing in marketing; you could grow faster by spending more to acquire users.
How to Use This Calculator
Enter your Monthly Average Revenue per User (ARPU in ) (e.g. 110.0), Gross Profit Margin (%) (e.g. 75.0), Monthly Customer Churn Rate (%) (e.g. 2.5 (or 100 - retention rate)), Customer Acquisition Cost (CAC in ) (e.g. 650), and Viral Customer Referral Rate (% of users who refer a friend) (e.g. 15.0 (or 0)). Results update instantly as you type — adjust any value to compare scenarios.
The Formula
Subscription Customer Lifetime Value & unit economics equations: Customer Lifespan (Months) = (1) / (Monthly Churn Rate (Fraction)) Gross Profit per User = Monthly ARPU × Gross Margin (\%) Lifetime Value (CLV / LTV) = (Monthly ARPU × Gross Margin (\%)) / (Monthly Churn Rate):CAC Ratio = (Customer Lifetime Value (LTV)) / (Customer Acquisition Cost (CAC)) Lifetime Profit per Customer = LTV - CAC Referral-Adjusted LTV = LTV × (1 + Referral Rate)
Worked Example
For example, a subscription software company with 110.00/month ARPU, 75.0% gross margin (82.50 monthly gross profit), 2.5% monthly churn rate (40.0-month average lifespan), and 650.00 CAC: Customer Lifetime Value (LTV) = (82.50) / (0.025) = \3,300.
- The LTV:CAC Ratio is \, delivering +2,650.00 in net lifetime profit per customer.
Understanding Your Result
Compare your result against industry benchmarks for your specific sector — significant variation exists across industries, business stages, and geographic markets. Use this calculation as one data point alongside your unit economics, cash flow, and competitive positioning. For decisions involving significant capital allocation, validate your model assumptions with historical actuals from at least 6–12 months of operating data before projecting forward.
💡 Methodological Standards & Calculation Accuracy
- All calculations are performed client-side in your browser using verified, standards-compliant mathematical algorithms.
- Results are provided for educational and informational analysis; verify critical applications with certified domain specialists.
- Ensure input values are entered in consistent units matching the selector options to guarantee accurate outputs.
- Periodic recalibration is recommended whenever baseline assumptions, operating parameters, or external conditions change.
Results are for informational and educational purposes only. Always verify critical decisions with a qualified professional.