How the calculator works
The model follows a paid acquisition funnel from spend to paying customer, then values each customer using your pricing, gross margin and churn. Every result updates as you type.
| Metric | Formula | What it tells you |
|---|---|---|
| CAC | Acquisition spend ÷ new customers | What one new customer costs you. Add salaries and tools for fully loaded CAC. |
| Revenue per customer | Seats × weighted plan price, or MRR ÷ customers | The monthly revenue each customer brings in. |
| Customer lifespan | 1 ÷ monthly churn, up to the LTV horizon | At 5% monthly churn, the average customer stays 20 months. |
| Revenue lifetime | 1 ÷ (churn − expansion), up to the LTV horizon | How long a customer's revenue lasts once upsells are counted. |
| LTV | Revenue per customer × gross margin × revenue lifetime | Gross profit a customer generates before churning. |
| LTV:CAC | LTV ÷ CAC | How many dollars of profit each acquisition dollar returns. |
| CAC payback | CAC ÷ (revenue per customer × gross margin) | Months until a customer has paid back what it cost to win them. |
| Net revenue retention | (1 − churn + expansion) ^ 12 | Revenue kept from a cohort after a year, upsells included. |
| Magic number | New MRR × 12 ÷ monthly acquisition spend | New ARR bought with each dollar of spend, before churn. |
| MRR after churn | New MRR × monthly retention, summed over the period | Recurring revenue still coming in from the customers you won. |
| Max CAC | LTV ÷ 3 | The most you can pay per customer and still hold a 3:1 ratio. |
SaaS unit economics benchmarks
These are widely used rules of thumb rather than hard limits. Your stage, segment and funding situation change what "good" looks like.
| Metric | Healthy | Context |
|---|---|---|
| LTV:CAC | 3:1 to 6:1 | Below 3:1 growth is unprofitable; below 1:1 every customer loses money. Well above 6:1 often means you are under-spending on growth. |
| CAC payback | 12 months or less | Longer paybacks tie up cash. Enterprise deals with annual contracts can justify up to 18–24 months. |
| Net revenue retention | 100% or more | Above 100% means expansion outweighs churn. Top B2B SaaS companies commonly aim for 110% or more. |
| Magic number | 0.75 or more | Below 0.5 usually means acquisition spend is not turning into recurring revenue efficiently. |
| Gross margin | 70–85% | Lower margins shrink LTV and stretch payback, even when revenue looks strong. |
| Monthly churn | Depends on segment | SMB products often churn several percent a month; mid-market and enterprise typically far less. |
For the full set of growth metrics and how to track them, see our SaaS metrics guide.
How to improve your unit economics
Each input in the calculator is a lever. The ones that usually move fastest:
- Conversion rates. A better landing page lowers CAC without spending more. Start with these landing page conversion tactics.
- Cost per visitor. Tighter targeting and the right channel mix cut wasted clicks. Our guide to lowering CAC covers ten proven approaches.
- Channel choice. Some channels acquire customers far more cheaply for your motion. Compare 150 ranked acquisition channels.
- Churn. Lifespan grows quickly as churn falls: cutting monthly churn from 5% to 4% extends it from 20 to 25 months.
- Revenue per customer and expansion. Packaging, a premium tier and seat growth raise LTV and push net revenue retention toward 100%, without touching acquisition.
Want to model this over time or share it with your team? Download the SaaS unit economics template for Google Sheets, or see how our SaaS paid acquisition team brings CAC down.
