LTV, CAC and churn calculator
Work out how many customers you lose, what a customer is worth over time and what it costs to win one. This free calculator turns your own numbers into a churn rate, lifetime value, acquisition cost, the ratio between them and the months needed to earn the cost back.
You can use one section or all three. Every formula is written out below, with the assumptions behind it, so you can check the arithmetic yourself. Nothing leaves your browser.
Calculate your unit economics
Free to use, no account needed. Everything is calculated in this page and the numbers disappear when you reload. Use any one section on its own, or all three for the summary.
1Churn rate
Churn rate is customers lost in the period divided by customers at the start of it.
Count only customers who were already customers at the start.
No churn result yet
Enter the two customer counts to see the churn rate and average lifetime.
2Customer lifetime value
LTV here is average monthly revenue per customer times gross margin, divided by monthly churn as a fraction.
In your own currency. Often called ARPA.
Share of revenue left after the direct cost of serving a customer.
Between 0 and 100. Section 1 can fill this in.
No LTV result yet
Enter revenue per customer, gross margin and monthly churn to see LTV.
3Customer acquisition cost
CAC is what you spent to win customers in a period divided by the number of new customers in that period.
Everything spent to win customers in the period, in your own currency.
No CAC result yet
Enter the cost and the number of new customers to see CAC.
4Summary
No summary yet
Fill in the LTV and CAC sections to see the summary.
The model assumes a constant margin, constant churn, no growth in revenue per customer and no discounting. Real customers rarely behave that evenly, so treat results as a way to compare scenarios.
How to use the calculator
- Start with churn. Enter how many customers you had at the start of a period and how many of those were gone by the end. Pick the length of the period. Customers who joined during the period are left out on purpose, because they were not at risk for the whole period.
- Fill in the lifetime value section. Enter average monthly revenue per customer, your gross margin as a percent and monthly churn as a percent. If you worked out churn in step one, press the button to copy its monthly equivalent across.
- Work out acquisition cost. Enter what you spent to win customers in the period and how many new customers you gained. If you have no paid ads yet, switch to the time option, enter your hours and decide what an hour of your time is worth. That value is your assumption, and the result says so.
- Read the summary. It compares lifetime value with acquisition cost and shows how many months of gross profit it takes to earn the cost back. Use Copy on any result to paste the numbers into a note or a planning document.
Formulas and assumptions
- Churn rate for the period equals customers lost divided by customers at the start, as a percent.
- Monthly equivalent churn equals the period churn rate divided by the number of months in the period. Average customer lifetime in months equals 1 divided by monthly churn as a fraction.
- Customer lifetime value equals average monthly revenue per customer times gross margin, divided by monthly churn as a fraction.
- Customer acquisition cost equals total acquisition spend divided by new customers. In the time option, spend includes hours times the value of one hour that you entered.
- LTV to CAC ratio equals lifetime value divided by acquisition cost. CAC payback in months equals acquisition cost divided by monthly revenue per customer times gross margin.
These formulas assume a constant gross margin, a constant churn rate, no growth in revenue per customer and no discounting of future profit. They also treat all customers as one average customer. If your plans differ a lot in price or churn, calculate them separately.
Worked example with fictional numbers
Imagine a small subscription tool that started a month with 300 customers and lost 15 of them. Churn is 15 divided by 300, which is 5% for the month, and the average lifetime is 1 divided by 0.05, or 20 months. Each customer pays 24 per month and gross margin is 75%, so gross profit is 18 per customer per month. Lifetime value is 24 times 75 divided by 5, which is 360.
The same month cost 2,700 in total to win 30 new customers, so acquisition cost is 90. Lifetime value is 4 times acquisition cost, and payback is 90 divided by 18, or 5 months. All of these figures are invented for illustration, and you can load them with the example button.
Now suppose the same founder had no paid ads and spent 20 hours finding 8 customers, valuing an hour at 30. Cost is 600 and CAC is 75. If they valued their time at 0, CAC would be 0, which shows how much of the number rests on the hourly assumption.
Practical tips for reading the numbers
Use the same period for all three sections. Churn from a quarter, acquisition spend from a month and revenue from a year will not fit together. If your customer base is small, a single cancellation can move churn by several points, so a longer period gives a steadier picture.
Count the full cost of winning customers. Ad spend, tools, freelancers, discounts and your own time all belong in acquisition cost if they were spent to gain customers. Leaving some out makes the cost look smaller than it was.
Try small changes. The summary text shows what happens when churn moves by one point, and you can change any input to compare scenarios. Lifetime value is very sensitive to churn when churn is low, so be careful with long averages built on little data.
This is arithmetic on the numbers you type and not financial advice. Use the product launch checklist to plan the rest of your launch, and the MRR and ARR calculator to turn your plans into recurring revenue.
Frequently asked questions
Why does the tool say LTV is undefined at 0% churn?
The formula divides by churn. With zero churn the model keeps every customer forever, so there is no finite lifetime and no finite value. Instead of showing a misleading huge number, the tool asks for a measured churn value, even a small one, taken from a longer period if needed.
Which assumptions does the model make?
It assumes a constant gross margin, a constant churn rate, no growth in revenue per customer over time and no discounting of future profit. Real customers upgrade, downgrade and leave unevenly, so the results are a simplified way to compare scenarios and not a forecast.
What should I do if I have no paid acquisition yet?
Use the time option. Enter the hours you spent finding customers and an hourly value that you choose. That value is your own assumption. The result shows CAC with and without your time, so you can see how much of the number depends on it.
Is there a good LTV to CAC ratio to aim for?
This tool does not give one. Some teams use rules of thumb, but they differ between businesses and none applies to every product. The ratio is most useful for comparing your own scenarios, for example how it changes when churn or acquisition cost changes.
Is my data saved or sent anywhere?
No. All calculations run in your browser, nothing is stored and no account is needed. The numbers disappear when you reload or leave the page, so copy any result you want to keep.
Ready to share your product?
Now that you know what a customer is worth and what one costs to win, the next step is getting someone to see your product, so add it to RadarMakers.
RadarMakers is a free directory for indie projects and SaaS. Prepare a clear tagline, explain who your product helps and include real screenshots when you submit.