LTV:CAC Calculator: Ratio, CAC and Payback in Days
LTV:CAC is the contribution-margin profit a customer returns over a set window, divided by the fully loaded cost of acquiring them. Enter your margin per order, how often customers reorder, and what you spent to land new buyers. The calculator returns CAC, LTV, the ratio, and how many days it takes a customer to pay back what you spent to get them.
A thin ratio or a slow payback usually traces back to a gap between what the ads promise and what the page and offer deliver.
What the calculator tells you
Four numbers, and two checks against the bands we use at Chance Ecom.
- CAC is your fully loaded sales and marketing spend divided by net-new first-time buyers.
- LTV is contribution-margin profit per order times orders per customer inside the window. Margin, not revenue.
- LTV:CAC is LTV divided by CAC.
- CAC payback is how many days of margin it takes to earn back the CAC.
How to read your result
The guideline bands come from our own read of DTC unit economics, and they are a starting point, not a law. Category moves them: a mattress brand lives near the floor, a replenishment brand should sit well above it.
| Check | Chance Ecom guideline |
|---|---|
| Ratio floor at scale | 1.5:1. Below it at scale is a unit-economics problem, not a creative one |
| Working band | 2.5:1 to 4:1 |
| Payback gate | 60 to 90 days |
Payback outranks the ratio. A 2:1 business that pays back in 60 days can fund its own growth. A 4:1 business that needs 18 months to pay back runs out of cash first. If your payback lands outside the gate, fix margin per order or first-order value before you raise spend.
The formula in plain words
- CAC = fully loaded sales and marketing spend / net-new first-time buyers.
- LTV = contribution-margin profit per order x orders per customer over the window.
- LTV:CAC = LTV / CAC.
- Payback in days = CAC / (LTV / window length in days), which assumes margin arrives at an even pace across the window.
Two inputs make or break the answer. Leave repeat buyers out of the denominator, or CAC reads far lower than it is. And load the spend: agency retainers, creative production, software and payroll belong in it next to media. Why the SaaS 3:1 rule does not transfer to DTC, and what to do when the ratio breaks, is in our guide to the LTV to CAC ratio.
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