Client LTV to CAC Ratio Calculator
Agencies and subscription businesses use LTV:CAC to judge acquisition health. Enter monthly spend, retention length, and cost to acquire a client—then score against the 3:1 rule of thumb.
Inputs
Results
How this calculator works
- Enter average client monthly spend and gross margin.
- Set average retention length in months.
- Add marketing/sales cost per acquired client.
- See LTV, CAC, ratio, and viability score.
Why this matters
Agencies and subscription businesses use LTV:CAC to judge acquisition health. Enter monthly spend, retention length, and cost to acquire a client—then score against the 3:1 rule of thumb.
Frequently asked questions
What is a good LTV to CAC ratio?
About 3:1 is a common healthy target. Below 1:1 means you lose money acquiring customers; far above 3:1 may mean you can spend more to grow.
How do you calculate LTV?
A simple model is average monthly revenue per client × gross margin × retention months.
What counts toward CAC?
Ad spend, sales commissions, marketing tools, and labor directly tied to acquiring a customer.
Is 3:1 always right?
It is a heuristic. Capital-efficient or high-growth phases may justify different targets temporarily.