E-Commerce CAC & LTV Calculator

Calculate Customer Acquisition Cost (CAC), Customer Lifetime Value (LTV), and LTV:CAC ratio.

Total Ad Spend / Marketing Cost ($):

New Customers Acquired:

Average Order Value (AOV) ($):

Average Purchase Frequency (per year):

Average Customer Lifespan (Years):

Gross Profit Margin (%):

Customer Acquisition Cost (CAC)

$0.00

Customer Lifetime Value (LTV)

$0.00

LTV : CAC Ratio

0.00x

Net Value Per Customer

$0.00

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E-Commerce CAC & LTV Calculator

For online DTC stores, Shopify brands, and digital marketers running paid ads on Facebook, TikTok, and Google, measuring unit economics is critical to sustainable growth. Two primary metrics govern marketing profitability: Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV). Our free E-Commerce CAC & LTV Calculator helps you evaluate ad spend efficiency, customer lifespan values, and profit retention ratios.

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What is CAC and LTV in E-Commerce?

Understanding the interplay between acquisition costs and repeat revenue drives scalable store growth:

• Customer Acquisition Cost (CAC): The total marketing and advertising spend required to acquire a single paying customer.
• Customer Lifetime Value (LTV): The total net profit generated by a single customer across their entire purchasing relationship with your brand.
• LTV:CAC Ratio: The universal metric used by investors and store owners to determine marketing sustainability. An ideal benchmark ratio is 3:1 or higher.

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CAC & LTV Calculation Formulas

Marketing Metric	Formula Structure
Customer Acquisition Cost (CAC)	Total Marketing & Ad Spend ÷ New Customers Acquired
Customer Lifetime Value (LTV)	Average Order Value × Purchase Frequency × Customer Lifespan × Gross Margin %
LTV : CAC Ratio	Customer Lifetime Value (LTV) ÷ Customer Acquisition Cost (CAC)
Net Value Per Customer	LTV Profit Amount − CAC

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Frequently Asked Questions (FAQs)

What is a good LTV to CAC ratio for e-commerce?

An **LTV:CAC ratio of 3:1** is considered healthy for most e-commerce businesses. A ratio below 1:1 indicates you are losing money on acquiring customers, while a ratio above 5:1 means you could aggressively scale ad budgets to capture market share.

How can I lower my Customer Acquisition Cost (CAC)?

Improve conversion rates on your Shopify landing pages, optimize Facebook and TikTok ad creatives, and leverage organic email and SMS marketing flows to drive repeat sales without paying additional ad costs.

Why should gross profit margin be included in LTV?

Calculating LTV based purely on top-line revenue ignores product cost (COGS), shipping, and gateway fees. Using profit margin ensures your LTV reflects real net cash flow.