Tool
LTV Calculator
Calculate customer lifetime value and your max sustainable CAC. Enter AOV, repeat purchases, customer lifespan, and gross margin. We'll show LTV, max CAC at different ratios, and a year-over-year breakdown.
Your Customer Economics
How many orders the average customer places annually
Inverse of churn — 5% monthly churn ≈ 1.7 years
Revenue minus COGS, as a % of revenue
Enter AOV, frequency, lifespan and margin to see your LTV
Customer Lifetime Value
$0
Set inputs to see verdictWhat your LTV means
Use it to set your acquisition ceiling and identify the levers worth pulling.
Strong LTV?
Push CAC up to your 3:1 ceiling and expand into higher-CAC channels. Strong LTV is a license to outbid competitors — especially on broad audiences and prospecting where they're capped at first-purchase economics.
Tight margin?
LTV grows linearly with margin — cutting COGS by even 5pp lifts LTV more than improving frequency. Audit suppliers, packaging, and shipping before you spend on retention experiments.
Short lifespan?
Retention drives LTV. Invest in onboarding, lifecycle email, and product depth before scaling acquisition — otherwise every new customer leaks out the bottom of the funnel before they pay you back.
Frequently asked questions
What's a healthy LTV : CAC ratio?
3:1 is the SaaS and DTC standard. Below 3:1 your unit economics are stretched — you're betting on retention or upsell to bail you out. Above 5:1 you may be under-investing in growth and leaving demand on the table.
Should I use revenue LTV or gross-profit LTV?
Use gross-profit LTV when comparing to CAC. Revenue LTV ignores COGS and overstates how much you can pay to acquire a customer — the only number that matters for bidding decisions is the dollars you actually keep.
How do I estimate customer lifespan?
Inverse of monthly churn rate, in months. 5% monthly churn = 20-month average lifespan (≈ 1.7 years). If you only have annual churn, divide 1 by your churn rate — 30% annual churn ≈ 3.3-year lifespan.
Does this account for discounting / refunds?
No. Use net AOV — after refunds, returns, and promo codes — for accurate output. Gross AOV inflates LTV by 10–20% in most DTC stores, which leads to overpaying for acquisition.
How does Pace handle conversion goals?
Pace lets you pick a specific in-platform conversion action per account — Purchase, Lead, Subscription — and optimizes daily budget allocation against that goal across Google, Meta, TikTok, LinkedIn, and Microsoft. The calculator gives you the LTV number you should be bidding toward; Pace makes sure budgets favour campaigns hitting your conversion target.
Make sure your ad budgets earn back their CAC.
Pace's AI optimizer rebalances daily budgets toward the campaigns hitting your target conversion goal — and the budget pacer keeps spend from running ahead of your CAC ceiling on any platform.
| This calculator | With Pace | |
|---|---|---|
| Frequency | One snapshot | Recomputed daily |
| Channels | Manual estimate | Google, Meta, TikTok, LinkedIn, Microsoft |
| Action | Tells you the number | Reweights daily budgets toward the target |
| Optimization signal | Static AOV | In-platform conversion goal per account |