CLV-to-CAC Ratio Calculator
Calculate the CLV-to-CAC ratio and CAC payback period to judge whether customer acquisition is profitable.
Your inputs
Results
CLV : CAC
4 : 1
- CAC payback period
- 6.25 months
- Reading
- At or above the often-cited 3 : 1 benchmark
✓Exact calculation — rounded only for display
What this calculator does
Comparing what a customer is worth with what it costs to acquire them is a core test of a growth model.
Formula and method
Worked example
Calculated by this tool with its default inputs:
Inputs
- Customer lifetime value: 1000 (any currency)
- Customer acquisition cost: 250 (any currency)
- Gross margin per customer per month (for payback): 40 (any currency)
Results
- CLV : CAC: 4 : 1
- CAC payback period: 6.25 months
- Reading: At or above the often-cited 3 : 1 benchmark
How to read the results
A ratio around 3:1 is an often-cited benchmark, but context matters; long payback periods tie up cash.
Assumptions and limitations
- Use margin-based CLV, not revenue-based, for this comparison.
Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.
Questions
Is a very high ratio good?
It may mean you are under-investing in growth.
Methodology and verification
- Result type
- Exact mathematical calculation (rounded only for display)
- Formula version
- 1.0
- Automated verification
- 2 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
- Editorial review
- Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.
Privacy
Everything you enter is calculated in this browser and is not sent to Numerith or anyone else. Inputs are added to a share link only if you choose to include them. Privacy policy