Unit Economics Engine
CAC Simulator
Don't guess your ad bids. Calculate exactly how much you can afford to pay for a customer while maintaining a healthy 3:1 LTV:CAC ratio.
Business Metrics
Aim for 3:1. Higher (5:1) means grow faster. Lower (1:1) means burn less.
Maximum Allowable CAC
$566
To hit a 3:1 ratio, your acquisition cost must stay below this number.
CACLTV ($1700)
1 Part
3x ROAS
Customer LTV
$1700
Lifetime Gross Profit
Payback Period
6.7 Months
Time to recover ad spend
Avg Lifespan
20.0 Months
1 / Churn Rate
Recaport Strategy
With a churn rate of 5%, you need your customers to stay for at least 6.7 months just to break even on your ad spend.Good: Your payback period is healthy (under 12 months). You can afford to be aggressive in ad auctions.
How to use this tool
- ARPU (Average Revenue Per User): The monthly revenue you get from one customer. If you have annual plans, divide by 12.
- Gross Margin: The profit percentage after "Cost of Goods Sold" (COGS). For SaaS, this is usually 80%+. For Agencies/E-com, 30-50%.
- Churn Rate: The % of customers who cancel every month. Lower is better.
Understanding the Ratio
- 3:1 (Ideal): You make $3 for every $1 you spend. This is the "Green Light" for scaling.
- 1:1 (Danger): You are breaking even. You are effectively working for free.
- 5:1 (Underspending): You are too profitable. You should bid higher to grow faster.