PixHarvest
Profit-based ecommerce metrics

LTV:CAC Calculator

Find out what a customer is really worth and whether your acquisition cost is sustainable. This gives profit-based lifetime value (LTV), the LTV:CAC ratio and the CAC payback period in one calculation.

Customer value inputs
$
%
/yr
yrs
Acquisition input
$

LTV uses gross profit (not revenue) so it can be compared directly with CAC.

Customer lifetime value (LTV)

AOV × margin × frequency × lifespan

LTV : CAC ratio

LTV ÷ CAC

CAC payback period

CAC ÷ gross profit per year

Revenue-based LTV (before margin)
Gross profit per year
Acquisition cost

What is a healthy LTV:CAC ratio?

Below 1:1 — you spend more to acquire a customer than they ever return. Unsustainable.
Around 3:1 — the standard healthy benchmark; growth cost is balanced against profit.
Above 5:1 — possibly under-investing in growth; you may be able to spend more to scale faster.

Benchmarks vary by industry and business model; use your own cohort data when available. Figures reviewed against Shopify and ecommerce analytics guidance (2026).

Frequently asked questions

Why use profit-based LTV instead of revenue LTV?

A customer who generates $128 of revenue at 60% margin returns only about $77 of gross profit. Comparing revenue LTV to what you spend (CAC) makes acquisition look better than it is. Always compare profit to cost.

How do I estimate purchase frequency and lifespan?

Use your own store data over a fixed window: frequency is total orders divided by unique customers per year, and lifespan is the average number of years a customer keeps ordering before going dormant.

What is CAC payback period?

It is how long it takes for the gross profit from a customer to cover what you spent to acquire them. A shorter payback means cash is recovered faster and growth is easier to fund.

Does a high ratio always mean good performance?

Not necessarily. A ratio far above 5:1 can mean you are being too conservative and leaving growth on the table by not spending enough on acquiring profitable customers.

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