Enter four numbers from last month. See your CAC, ROAS, LTV, and LTV:CAC ratio instantly. Built for founders and growth teams who want the verdict in 10 seconds, not a 40-cell spreadsheet.
Customer Acquisition Cost (CAC) is the total amount of money you spend to acquire one paying customer. The formula is brutally simple: total marketing and sales spend divided by the number of new customers acquired in that same period. If you spent $10,000 on ads, content, and sales last month and signed 50 new customers, your CAC is $200.
CAC matters because it sets the floor for every other unit-economics decision in your business. Pricing has to support it. Retention has to justify it. Fundraising rounds get evaluated against it. A SaaS company with a $1,200 CAC and a $39/month subscription is not a business — it is a slow-motion bankruptcy, no matter how much the founders talk about "growth at all costs."
The trick to CAC is including everything. Most founders calculate it wrong by only counting ad spend. The real CAC includes ad spend, plus salaries of marketing and sales staff, plus tools (HubSpot, Mailchimp, etc.), plus content production costs, plus agency fees, plus the affiliate commissions you pay on each conversion. Strip none of it out — Google does not care that you "didn't pay for SEO this month" if your in-house SEO specialist costs $90k/year and produced two new customers.
Return on Ad Spend (ROAS) is revenue divided by ad spend. A ROAS of 3.5× means you got $3.50 in revenue for every dollar spent on ads. It is the dominant metric on Meta Ads Manager, Google Ads, and most reporting dashboards because it is fast, paid-channel-specific, and easy to optimize against.
The problem with ROAS is that it does not include profit margins, customer lifetime, or the cost of fulfilling the order. A 5× ROAS on an e-commerce store with 30% gross margins is barely break-even after shipping, returns, and platform fees. A 2× ROAS on a SaaS business with 85% margins and 24-month retention is a goldmine. So ROAS is useful at the campaign level — you absolutely should kill the campaigns with sub-1× ROAS — but it is dangerous as a north-star metric. Optimizing pure ROAS will push you toward cheaper, lower-quality customers, eventually destroying your LTV.
The rule of thumb: ROAS is for the marketing team's daily standup. LTV:CAC is for the board meeting.
Customer Lifetime Value (LTV) is the total revenue you expect to receive from one customer over their entire relationship with your business. For a subscription business it is calculated as average monthly revenue per user (ARPU) times the average lifetime in months times the gross margin percentage. A SaaS customer paying $80/month for an average of 18 months at a 70% gross margin has an LTV of $1,008.
LTV depends on three levers that founders chronically underestimate: price, retention, and expansion revenue. Raising prices 10% (with churn impact <3%) raises LTV by ~7% directly. Extending retention from 12 to 18 months raises LTV by 50%. Adding even a small upsell — a $20/month add-on bought by 30% of customers — raises LTV by 7.5% with zero customer acquisition cost. Most SaaS teams obsess over CAC reduction while leaving 30-40% LTV improvement on the table by ignoring pricing and retention.
Divide LTV by CAC. The result is the ratio everyone should care about.
The payback period is how many months of revenue it takes to recover the CAC. It is calculated as CAC divided by monthly gross profit per customer (monthly ARPU times margin). If your CAC is $200 and each customer generates $56 in gross profit per month ($80 revenue × 70% margin), your payback period is 3.6 months.
Short payback periods are everything for venture-backed businesses. The shorter the payback, the less cash you need on hand to fund growth — every dollar that comes back in month 4 can be reinvested into month-5 acquisition. Best-in-class SaaS payback periods sit at 5-12 months. Anything beyond 18 months means you are essentially running a bank: you are lending capital to your customers in the hope they will stay around long enough to repay you. Most won't.
| Industry | Healthy CAC | Target LTV:CAC | Target payback |
|---|---|---|---|
| B2B SaaS (SMB) | $200-$600 | 3-5× | <12 mo |
| B2B SaaS (Enterprise) | $5,000-$50,000 | 4-6× | <18 mo |
| D2C e-commerce | $15-$80 | 3× | <3 mo |
| Mobile apps (subscription) | $8-$50 | 3× | <6 mo |
| Fintech (lending) | $80-$300 | 4× | <9 mo |
| Insurance | $200-$800 | 5× | <12 mo |
If your numbers are wildly off these benchmarks, that is not necessarily bad — it just means you have a story to tell. A $2,000 CAC in D2C e-commerce is probably a luxury brand with high LTV. A $5 CAC in B2B SaaS is probably a viral product with weak monetization. Context matters.
Pull your numbers from last month's books, not a quarterly average. The point is to find anomalies, not to confirm your existing narrative. Enter total marketing spend (yes, including salaries and tools), the number of new paying customers (not signups, not trial starts), and your actual contract economics. The calculator will tell you whether you are in healthy territory, warning zone, or fundamentally broken.
The verdict box updates as you type. Adjust your inputs to see what would have to be true for the unit economics to work. Often the answer is uncomfortable but clarifying — either you need to halve CAC, double price, or both.