Customer lifetime value is the gross profit you expect from one customer before they leave. Pick subscription or repeat purchase, and add your CAC to get your LTV:CAC ratio too.
Customer lifetime value
$3,200
A customer stays about 33.3 months and earns $96.00 of gross profit a month.
Revenue left after the cost of delivering the product.
Add it to see your LTV:CAC ratio.
Sample numbers shown. Type over them with yours.
Not sure of your CAC? Open the CAC calculator
Runs in your browser with no sign-up. We record that the tool was used, never your numbers. A copied link carries them, so share it only with people you’d show them to.
For subscriptions, multiply monthly revenue per customer by gross margin, then divide by monthly churn. $120 a month at an 80% margin and 3% churn gives $3,200. For repeat purchase, multiply order value, orders per year, years retained and margin. Both formulas assume customers keep behaving the way they do today.
A hypothetical SaaS product earns $120 a month per customer at an 80% gross margin. It loses 3% of customers a month, and its CAC is $900.
The ratio clears the common 3:1 rule of thumb, and CAC comes back inside a year.
The common rule of thumb is 3:1 or better. David Skok writes that the best SaaS businesses sit above 3. The 2026 Aleph and Benchmarkit report puts the median B2B SaaS ratio at 4.1x, with the top quartile at 7.8x and the bottom quartile at 1.1x.
| Measure, B2B SaaS | Benchmark |
|---|---|
| LTV:CAC, medianAleph and Benchmarkit | 4.1x |
| LTV:CAC, top quartileAleph and Benchmarkit | 7.8x |
| LTV:CAC, bottom quartileAleph and Benchmarkit | 1.1x |
| LTV:CAC, vertical SaaSAleph and Benchmarkit | 5.6x |
| CAC payback, medianAleph and Benchmarkit | 16 months |
| Gross revenue retention, medianAbout 9% of revenue lost each year. SaaS Capital | 91% |
| Net revenue retention, medianSaaS Capital | 101% |
Aleph and Benchmarkit define LTV as annual revenue per customer times gross margin, divided by annual churn, which matches the subscription formula here. Skok calls his figures guidelines, and adds that profitability suffers once CAC takes more than 12 months to recover.
Customer lifetime value is the total profit you expect from one customer across the whole time they buy from you. It tells you how much you can afford to spend winning a customer and keeping them. Teams use it beside CAC to decide which channels and customer groups deserve more budget.
CLV, CLTV and LTV all name the same measure. Teams do differ on whether it means revenue or gross profit, so say which you use. This calculator uses gross profit, because revenue overstates what a customer can pay back. It shows lifetime revenue on a separate line for comparison.
Yes. A very high ratio can mean you’re underspending on growth, or that your CAC leaves out real costs, or that the lifetime is forecast far beyond what you’ve seen. Check the inputs first. If they hold up, you may be able to spend more on acquisition and still stay profitable.
Use the data you have and be cautious. Cohort retention over your first few months shows how fast customers drop off, and early churn usually runs higher than later churn. Our guide on cohort retention analysis shows how to read it. Avoid forecasting years you haven’t seen yet.
Gross margin shows what’s left to pay back acquisition costs after you’ve delivered the product. Revenue ignores hosting, support, product and shipping costs, so it makes every customer look more valuable than they are. A $3,200 gross profit figure and a $4,000 revenue figure lead to very different budgets.
Divide customer lifetime value by customer acquisition cost. A customer worth $3,200 of gross profit with a $900 CAC gives 3.6:1. Use the same customer group for both numbers. Our guide to the LTV to CAC ratio covers the forecast behind the number and where it misleads.
Lifetime value depends on retention you can trust. Our product analytics work gives you cohorts you can read at a fixed price.
Paste this where you want it. It stays free and sends no tracking from your site.
<iframe src="https://www.martechdevs.com/embed/customer-lifetime-value-calculator" title="Customer lifetime value calculator" width="100%" height="680" style="border:0;max-width:760px" loading="lazy"></iframe>
<p style="font-size:13px">Free tool by <a href="https://www.martechdevs.com/tools/customer-lifetime-value-calculator">martechdevs</a></p>Last updated
Calculate LTV to CAC with consistent costs, test the 3:1 benchmark, and separate observed cohort value from forecasts before increasing acquisition spend.
Jafrin Akter AloLast updated 13 min read
Cohort retention analysis tracks one starting group over time. Get the formula, a worked table, SQL, GA4 and Mixpanel settings and what good looks like.
Jafrin Akter AloLast updated 19 min read
Calculate CAC payback with the SaaS formula, gross margin and cohort data. See what a good payback period is by segment and when the number misleads.
Jafrin Akter AloLast updated 17 min read
Want it set up for you? See implementation plans or book a free call.