LTV to CAC Ratio & Unit Economics Calculator
Calculate your LTV:CAC ratio. Benchmark unit economics against the 3:1 SaaS standard to evaluate growth efficiency and capital allocation.
Calculated Results
LTV:CAC Ratio
4x
Unit Economics Health
At or above the 3:1 rule of thumb
3:1 is a common rule of thumb, not a law.
About this tool
The LTV to CAC ratio is the golden metric of SaaS unit economics, comparing the lifetime gross profit generated by a customer against the cost incurred to acquire them. Many investors use 3:1 (lifetime value three times the acquisition cost) as a rough rule of thumb, but the right ratio depends on your cash position and growth plans. If your ratio falls below 3:1 (e.g. 1.5:1), your unit economics are underwater: after accounting for administrative overhead and product development, you are losing money on every acquired account. Conversely, if your ratio exceeds 5:1, your product has exceptional retention, but your marketing team is likely under-investing in acquisition and surrendering market share to competitors. Use this tool to benchmark your unit economics.
How It Works
- 1Input your margin-adjusted Customer Lifetime Value (LTV).
- 2Input your fully loaded Customer Acquisition Cost (CAC).
- 3Review your calculated LTV:CAC ratio and corresponding business health assessment.
- 4Inspect your net ROI multiplier per acquisition dollar spent.
Formula & Math
Transparent LogicLTV:CAC Ratio = LTV / CAC
Worked Practical Example
A B2B SaaS has an LTV of $1,200 and a fully loaded CAC of $300.
Calculation / Steps
$1,200 / $300 = 4.00
Expected Result
4.00:1 LTV:CAC ratio (Healthy unit economics; exceptional capital efficiency).
Frequently Asked Questions
What is an ideal LTV to CAC ratio for venture-backed SaaS?+
Between 3:1 and 4:1. A very high ratio can mean you are under-investing in growth, because you could afford to spend more to win customers.
What causes an LTV:CAC ratio to collapse?+
Rising digital ad costs, poorly targeted leads that churn in month 2 or 3, or declining gross margins due to expensive third-party infrastructure.
How does BoolBul improve the LTV:CAC ratio?+
BoolBul increases the LTV numerator by preventing voluntary cancellations, lifting the overall ratio without spending extra capital on CAC.
Automate retention on your cancel button
BoolBul rapidly improves your LTV:CAC ratio by lifting average customer lifespan without requiring any changes to your acquisition spend.
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