Inputs
CACcost to acquire one customer
$
AOVaverage order value
$
Gross margin% kept after COGS
%
Repeat purchasesper customer, over their lifetime
x
Results
Gross profit per customervalue minus COGS, over their lifetime
—
LTVlifetime value (gross)
—
LTV ÷ CAC3+ is the bar for healthy
—
Payback periodmonths to recoup CAC
—
Plug in your numbers above.
As you type, the verdict will update with what your unit economics actually say.
How the math works
No black box. Here's what we're computing under the hood, and where the rules of thumb come from.
Gross profit / customer
Ecomm: AOV × repeat purchases × gross margin.
SaaS: ACV × (1 / monthly churn × 12) × gross margin, i.e., expected lifetime months × annual revenue × margin.
SaaS: ACV × (1 / monthly churn × 12) × gross margin, i.e., expected lifetime months × annual revenue × margin.
LTV
Lifetime value: total gross revenue you'll get from one customer before they stop buying. We pair LTV with margin because gross LTV is misleading.
LTV / CAC ratio
How much profit you get for every dollar spent acquiring a customer.
3 or more = healthy. 1.5–3 = workable but tight. Under 1.5 = you're paying to lose customers.
3 or more = healthy. 1.5–3 = workable but tight. Under 1.5 = you're paying to lose customers.
Payback period
How many months until one customer's gross profit covers their CAC. Under 6 months is good for ecomm; under 12 months is the bar for SaaS. Past that, you need very patient capital.
Numbers say one thing. Marketing has to deliver another.
Send us your numbers. If the math says you can spend more, we can help you spend it well.