sales
LTV/CAC Calculator
Most founders are spending the most on the worst channel.
2-3 hours initial setup. Quarterly review of 1 hour.
What it is
Calculate Customer Lifetime Value and Customer Acquisition Cost by channel. The unit-economics number that determines whether to scale or kill each marketing channel.
When to use it
Quarterly. Before increasing marketing spend on any channel.
How it works
- 1.Per acquisition channel: total spend ÷ customers acquired = CAC
- 2.Per acquisition channel: avg revenue × gross margin × avg lifespan = LTV
- 3.Calculate LTV/CAC ratio per channel
- 4.Healthy: 3+. Scale: 5+. Kill: under 1.5
Outcome
Most US service businesses discover they're scaling the channel with the worst unit economics. Shifting budget typically lifts blended LTV/CAC 30-50% in 90 days.