Calculator · Economics scenario

LTV:CAC Scenario Calculator

Customer value depends on survival, contribution, payment timing and horizon. This calculator shows a conditional geometric scenario. Actual cohort LTV remains unavailable without cohort survival and contribution data.

Scenario · not a fitted forecastModel updated 2026-10-05

Assumptions and formula

L T V_{H} = A C V \cdot m t = 0 \sum H - 1 \frac{( 1 - q ) ^{t}}{( 1 + d ) ^{t}}, L T V : C A C = \frac{L T V _{H}}{C A C}

The first year's contribution is received at acquisition; later contributions arrive at annual renewal. Customer churn q, contribution margin m and annual discount d remain constant through horizon H. There is no price change, expansion or intervention in this scenario. Choose a contribution margin that includes the relevant delivery and service costs.

Aggregate NRR mixes customer survival with expansion, contraction and price changes. It cannot identify a customer's dropout hazard. A shifted Beta-Geometric model requires cohort observations and fitted parameters; it does not imply a universal percentage haircut.

Calculator

Annual contract value ($)Constant annual customer churn (%)Contribution margin (%)Acquisition cost per customer ($)Scenario horizon (years)Annual discount rate (%)

Contribution value within horizon

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Scenario LTV:CAC

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Use the result

Compare scenarios using the same payment convention, horizon, customer unit and cost basis. A large ratio can coexist with slow cash recovery or weak customer value. Acquisition decisions need incremental contribution, uncertainty and available capital as well as this ratio.

For a fitted cohort estimate, collect survival and contribution by tenure, record censored observations and validate on a later cohort. Heterogeneity can move the estimate in either direction relative to a mismatched constant-churn calculation.