How much can you afford
to pay for a customer?
Plug in your numbers. The calculator works backwards from your margins to your maximum allowable CAC and your break-even cost per lead. Everything runs in your browser, nothing is collected, and the formulas are published below so you can check the math yourself.
The calculator
Numbers update live as you type. Negative values are rejected automatically.
Exactly what the
calculator does.
Three formulas, in this order. No hidden steps.
Lifetime value is the gross profit you expect from one customer over their whole relationship with you: what the first sale keeps, plus what repeat business keeps. Margin is entered as a decimal (40% becomes 0.40).
At a 0% target profit margin this is pure break-even: you can spend the entire lifetime value on acquisition. Raise the target margin and the allowable CAC shrinks, because you are reserving profit. At 25% target margin, Max CAC = LTV x 0.75.
Leads convert at your close rate, so each lead is worth the customer cost times the probability it becomes a customer. A 20% close rate means each lead carries 20% of a customer's value.
Real numbers,
step by step.
Inputs: $2,500 average sale, 40% gross margin, 20% close rate, $0 repeat revenue, 0% target margin.
$1,000.00. Each customer contributes $1,000 in gross profit.$1,000.00. At pure break-even you can spend up to $1,000 to win one customer.$200.00. Each lead is worth at most $200.What this tool
does not do.
- Single-period view. The calculator treats lifetime value as if it arrives all at once. It does not discount future revenue or account for the time it takes to collect it.
- No payback timing. Spending $1,000 today to earn $1,000 over two years is a cash-flow commitment the break-even number hides. The math is right; the timing is on you.
- Stable rates assumed. Your close rate and gross margin are treated as constants. In reality both move with lead quality, seasonality, and pricing.
- Repeat revenue is a guess. Whatever you enter is taken at face value. It assumes the repeat business actually materializes, with no churn modeled.
- Ignores overhead. Rent, salaries, and software that don't scale per customer are not in the formulas. The numbers are a marketing math ceiling, not a full P&L.
- One channel at a time. If you run multiple channels with different close rates, run the calculator once per channel instead of blending them.
Before you
ask.
Customer acquisition cost (CAC) is the total marketing and sales cost required to win one new customer. If you spend $1,000 on ads and close 4 customers, your CAC is $250. This calculator works backwards: it starts from your margins and tells you the maximum CAC (and cost per lead) you can afford while still hitting your profit target.
There is no universal number, because a good CAC depends entirely on your sale value, gross margin, and close rate. A $250 CAC is fantastic for a business with a $1,000 customer lifetime value and terrible for one with a $200 lifetime value. The only honest benchmark is your own math: CAC must stay below your maximum allowable CAC, which this calculator computes from your numbers.
Three steps. First, compute lifetime value: LTV = (average sale value x gross margin) + repeat revenue. Second, take the maximum customer cost at a 0% target profit margin, which equals LTV. Third, multiply by your lead-to-customer close rate: break-even cost per lead = LTV x close rate. Example: $1,000 LTV x 20% close rate = $200 per lead at break-even.
Because the first sale is rarely the whole story. A customer who buys once for $500 is worth far less than one who buys three more times over two years. If you only count the first sale, you underprice what you can afford to pay for acquisition and hand the repeat business to competitors who did the full math.
Know your numbers?
Now let's beat them.
Bring your real close rates and margins. We'll tell you straight what your acquisition should cost.