Free tool
Unit Economics Calculator
Unit economics answer one question: does a customer bring in more than it costs to win them, and how fast? Three numbers answer it, and the LTV to CAC ratio sums them up.
Unit economics measure the profitability of a single customer. Customer lifetime value (LTV) is the margin they leave each month divided by the monthly churn rate. The LTV to CAC ratio compares that value with the customer acquisition cost (CAC), and the payback period is how many months the margin takes to repay that cost.
Do You Know What A Customer Is Worth, And What They Cost?
The ratio tells you how far your acquisition can go. Campaigns find customers at the cost that keeps that ratio healthy.
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How unit economics are calculated
Monthly margin = Monthly revenue × Gross margin LTV = Monthly margin ÷ Monthly churn rate Ratio = LTV ÷ CAC · Payback = CAC ÷ Monthly margin
120 € a month at a 70 % margin leaves 84 € a month. With 3 % monthly churn, a customer stays 33 months on average and leaves 2,800 €. For a 1,500 € acquisition cost, the ratio is 1.87, and acquisition pays back in just under 18 months.
Each number has its detailed tool on the site: the churn rate calculator for lifetime value with discounting, the CAC calculator and the CAC payback calculator. This one puts them side by side for a single reading.
What the calculation helps you decide
- The acquisition cost you can pay, from what a customer is worth.
- The lever to work on: lowering churn raises lifetime value without spending one more euro on acquisition.
Frequently asked questions
How do I calculate the LTV to CAC ratio?
Divide customer lifetime value by acquisition cost. For 2,800 € of value and 1,500 € of cost: 2,800 ÷ 1,500 = 1.87.
How do I calculate LTV from churn?
Divide a customer’s monthly margin by the monthly churn rate. 84 € of margin and 3 % churn: 84 ÷ 0.03 = 2,800 €.
How do I calculate CAC payback?
Divide acquisition cost by a customer’s monthly margin. 1,500 € ÷ 84 € = 17.9 months.
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