LTV Calculator

Customer Lifetime Value (LTV or CLTV) is the total gross profit a business can expect to earn from a single customer over the entire duration of their relationship. For SaaS companies, it is typically derived from monthly revenue, gross margin, and churn rate, and it is one of the most important metrics for evaluating whether acquisition spend is sustainable.

This calculator uses the standard SaaS formula: estimated customer lifetime (in months) equals 1 divided by your monthly churn rate. Monthly gross profit equals your average monthly revenue per customer, plus any expansion revenue, multiplied by your gross margin percentage. Base LTV is monthly gross profit multiplied by estimated lifetime, and we subtract any onboarding or support cost you enter to produce a net LTV figure.

A widely used benchmark is an LTV:CAC ratio of 3:1 or higher, meaning a customer generates at least three times what it costs to acquire them. A ratio between 1:1 and 3:1 suggests your unit economics need improvement, while a ratio below 1:1 means you are likely losing money on every customer you acquire and should revisit your assumptions.

Churn rate has an outsized, non-linear effect on lifetime value because estimated customer lifetime is the inverse of churn. Reducing monthly churn from 5% to 2.5% doubles the estimated lifetime from 20 months to 40 months, which in turn doubles LTV. Even small improvements in retention can meaningfully increase the total value each customer generates.

CAC payback period is the number of months it takes for a customer's monthly gross profit to cover the cost of acquiring them, calculated as CAC divided by monthly gross profit. A shorter payback period, generally under 12 months for SaaS, means your business recovers acquisition spend faster and can reinvest in growth with less cash flow risk.

SubmitMySaas helps SaaS founders and makers increase visibility through a curated launch directory, which can drive more qualified organic traffic and reputable backlinks. Over time, better-targeted traffic and stronger domain signals may help lower effective acquisition costs and support retention, though these are directional benefits rather than guaranteed outcomes and should be validated against your own data.