Free Ecommerce CAC & LTV Calculator
CAC & LTV Calculator
Estimate customer acquisition cost, contribution-based lifetime value, LTV-to-CAC ratio, payback period, and a target maximum CAC.
Your inputs
Model one customer cohort
Use new customers acquired in the same period as acquisition spend. This simple retention model estimates lifetime from annual churn and does not discount future cash flow.
Simple contribution LTV
AOV × purchases per year × gross margin ÷ annual churn
Annual churn is 100% minus annual retention. Use cohort data when customers have materially different repeat behavior.
Live result
Contribution-based customer economics
The result is most useful as a consistent planning model. Validate it with real cohort retention before using it to raise acquisition limits.
Contribution LTV
$400
Estimated over 3.3 years under the retention assumption
LTV : CAC
8.00×
3.0× target entered
Current CAC
$50.00
Acquisition spend per new customer
CAC payback
5.0 months
Using average monthly contribution
Maximum CAC at target
$133.33
LTV ÷ 3.0×
Cohort check before scaling
- • Confirm acquisition spend includes every paid channel assigned to this cohort.
- • Use contribution after discounts, refunds, fulfillment, and payment costs where available.
- • Compare recent and mature cohorts before assuming retention will stay constant.
Continue with live account data
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Quick answer
An ecommerce CAC and LTV calculator compares what it costs to acquire a new customer with the contribution that customer may generate over time. This version uses average order value, purchase frequency, gross margin, and annual retention to estimate contribution-based customer lifetime value.
It also calculates CAC payback period and the maximum CAC allowed by the target LTV:CAC ratio you enter. Use channel and cohort data before turning that maximum into a bidding target.
CAC, LTV, ratio, and payback formulas
Calculation
Contribution LTV = AOV × purchases per year × gross margin ÷ annual churn
- CAC equals acquisition spend divided by new customers acquired.
- Annual churn equals one minus annual retention.
- LTV:CAC equals contribution LTV divided by CAC.
- Payback months equal CAC divided by average monthly contribution per customer.
How to use the free tool
- 1
Build one cohort
Use customers acquired in a defined period and assign acquisition spend using one consistent rule.
- 2
Use contribution, not revenue
Apply gross margin so product cost is not mistaken for cash available to recover acquisition spend.
- 3
Estimate repeat behavior
Use purchases per year and annual retention from mature customer cohorts where possible.
- 4
Compare channels separately
Google Ads, Meta Ads, TikTok Ads, affiliates, and organic acquisition can produce different margin and retention mixes.
How to read LTV:CAC and payback
LTV:CAC ratio
A higher ratio creates more modeled contribution per acquisition dollar, but it can also indicate that growth is constrained by spend or confidence.
CAC payback
Payback shows how long acquisition cash is tied up. Fast growth with slow payback can create a financing problem even when modeled LTV is strong.
Maximum CAC
This is the acquisition cost allowed by the target ratio entered. Use a lower operating limit when retention or margin estimates are uncertain.
Lifetime years
The simple churn model assumes retention remains stable. Review cohort curves when early and mature customers behave differently.
What the result does not prove
- The simple churn model does not discount future cash flow or model a changing retention curve.
- Average order value and margin can hide important product, discount, refund, and customer-mix differences.
- Attribution rules can assign the same customer differently across advertising and analytics systems.
When you need account-specific evidence, copy the task from the result panel. Install BizSidekick without making a payment, connect only the accounts required for the task, and ask it to verify the browser result before preparing supported changes for review.
Definitions and platform references
Frequently asked questions
How do you calculate ecommerce CAC?
Divide acquisition spend assigned to a cohort by the number of new customers acquired in that same cohort and period. Keep spend and customer attribution definitions consistent.
How does this calculator estimate customer LTV?
It multiplies average order value, purchases per customer per year, and gross margin, then divides that annual contribution by annual churn. It is a simple planning model, not a discounted cash-flow forecast.
What is the LTV to CAC ratio?
LTV:CAC compares estimated contribution from a customer with the cost to acquire that customer. The right target depends on cash flow, retention confidence, growth stage, and operating costs.
What is CAC payback period?
CAC payback period estimates how many months of average contribution are required to recover acquisition cost. Faster payback generally reduces the cash required to finance growth.
Should I calculate LTV by marketing channel?
Yes when enough data exists. Customer mix, discounting, repeat purchase, refund behavior, and product margin can differ significantly between Google Ads, Meta Ads, TikTok Ads, affiliates, and organic acquisition.
