LTV & LTV:CAC Calculator
Work out a client’s lifetime value, what it costs to win one, your LTV to CAC ratio, and how fast you recover the cost, all against agency benchmarks.
Free · Runs in your browser · Nothing is stored
How it is calculated
Formula: LTV = average monthly retainer x gross margin % x average lifespan in months; LTV:CAC = LTV / CAC
Client lifetime value is the total gross profit an average client produces over the time they stay with you: their monthly retainer, times your gross margin, times how many months they last. Acquisition cost is what you spend to win one client, and it should include the fully loaded cost of selling time and pitch hours, not just ad spend.
The ratio of the two tells you whether growth pays for itself. A healthy LTV to CAC is generally cited at 3:1 to 5:1, with the acquisition cost paid back in under 12 months. Below 3:1, acquisition is too expensive; well above 5:1 usually means you are underinvesting in growth. Use your own margin and tenure rather than an industry average.
Know your unit economics
AgencyKit tracks retainers, margins, and the pipeline, so your lifetime value and acquisition cost come from real data instead of a spreadsheet.
Start a free trialFrequently asked questions
A healthy LTV to CAC ratio is generally cited at 3:1 to 5:1, with acquisition cost recovered in under 12 months. Below 2:1 signals a pricing or channel problem, often because CAC is understated by leaving out selling time. Treat it as a services convention, not a hard rule.
Multiply the average monthly retainer by your gross margin percentage by the average client lifespan in months. A 2,500 dollar retainer at 55% margin over 24 months is a lifetime value of 33,000 dollars. Use your own realized tenure rather than an average.
CAC payback is how many months it takes to recover the cost of acquiring a client from the gross profit they generate. Divide acquisition cost by the client’s monthly gross profit. Under 12 months is healthy, and under 6 months is excellent.