Customer Economics Calculator
Estimate customer lifetime value and compare it against acquisition cost using revenue, purchase frequency, margin and customer lifespan.
Enter your average customer economics to estimate contribution LTV and CAC efficiency.
Estimated lifetime contribution before acquisition cost.
Contribution LTV generated for every unit spent acquiring a customer.
There is no universal target. Higher ratios generally indicate more contribution generated relative to acquisition cost, but very high ratios can also indicate that a business may be under-investing in growth.
The appropriate ratio depends heavily on cash flow, retention, operating expenses, growth targets and how accurately customer lifetime behavior can be forecast.
Model assumptions matter
Lifetime revenue can make acquisition look healthier than it really is. For paid media decisions, contribution value after product or service costs is usually more informative because that is the value available to recover acquisition cost.
A strong lifetime ratio can still create cash-flow pressure if value arrives slowly. Payback period helps show how long the business is financing acquisition before the customer contribution recovers CAC.
Two customer groups can both have a 3:1 LTV:CAC ratio, but one may repay CAC within two months while the other takes eighteen months. The long-payback cohort carries more retention and cash-flow risk even though the headline ratio matches.