The methodology behind our LTV:CAC calculator

The model takes four core inputs: acquisition cost by channel, average order value, gross margin, and repeat purchase rate and timing by cohort, and calculates lifetime value net of margin rather than gross revenue.

Because repurchase timing varies so much by category, the model uses your own cohort data rather than an industry benchmark wherever enough purchase history exists to build one reliably.

The output feeds directly into acquisition budget decisions: a channel's acceptable acquisition cost ceiling is set as a function of the lifetime value the customers it brings in actually generate, not a flat target applied across every channel equally.