STRATEDGE CONSULTING

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CAC, LTV and payback

Three numbers tell you whether your growth pays: what a new client costs, what they bring in margin over their lifetime, and how long it takes to earn back the acquisition cost.

The starting values are examples: replace them with last month's figures or, better, the average of the last three.

Formulas: CAC = spend ÷ new clients; lifetime = 1 ÷ share of clients lost each month; LTV = monthly revenue × margin × lifetime; payback = CAC ÷ (monthly revenue × margin).

Result

LTV to CAC ratio

11.3

Customer acquisition cost (CAC)
€1,500 excl. VAT
Lifetime value in margin (LTV)
€16,875 excl. VAT
Average client lifetime
50 months
CAC payback period
4.4 months

Commonly cited benchmarks for subscription businesses: an LTV at least three times the CAC, and an acquisition cost earned back in under twelve months.

David Skok, For Entrepreneurs, SaaS Metrics

Indicative estimate, ahead of any quote: precise costing happens during a diagnostic.

Next step

These numbers give you a sense of scale.

Costing happens during a diagnostic, Express or strategic depending on your size.

€500

Express Diagnostic (excl. VAT)

A clear picture of your digital setup in one week. Deducted from your first Sprint or Program.

Get the detail

Get the full calculation by email

You receive your assumptions, the year-by-year detail and the points to watch.