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Unit Economics Calculator

Calculate key unit economics metrics including CAC, LTV, LTV/CAC ratio, payback period, and contribution margin to evaluate customer profitability.

Customer Acquisition

Revenue & Costs Per Customer

Leave blank to auto-calculate from revenue & cost above.
Results update as you type.

How It Works

Customer Acquisition Cost (CAC) measures how much it costs to acquire a single customer:

CAC = Total Marketing & Sales Spend / New Customers Acquired

Customer Lifetime Value (LTV) estimates the total contribution margin from a customer over their lifetime:

LTV = (Avg Revenue - Avg Cost) × Avg Customer Lifespan

LTV / CAC Ratio indicates whether your customers generate enough value relative to acquisition cost:

LTV/CAC ≥ 3.0x is generally considered healthy for sustainable growth.

Payback Period shows how many months it takes to recover the acquisition cost:

Payback Period = CAC / Contribution Margin Per Month

Key Metrics Explained

Why LTV/CAC Matters

  • < 1.0x — Losing money on every customer
  • 1.0x – 3.0x — Marginal; improve acquisition or retention
  • 3.0x – 5.0x — Healthy and sustainable
  • > 5.0x — Potentially under-investing in growth

Improving Unit Economics

  • Lower CAC through organic channels and referrals
  • Increase ARPU with upsells and pricing optimization
  • Reduce churn to extend customer lifespan
  • Cut cost to serve through automation

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