Your LTV to CAC ratio decides whether your business grows or bleeds. Work out yours in seconds. Nothing is stored or sent.
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Master these and you stop guessing about growth. Here is each one in plain English.
The total profit one customer brings over the whole time they stay with you, not just their first purchase.
Revenue × Margin × YearsWhat it truly costs to win one new customer, including ads, agency fees, sales time and tools.
Total spend ÷ New customersAim for 3 to 1 or better. Every customer should be worth at least three times what they cost to win.
LTV ÷ CACAnd why that quietly costs them.
Your data lives in five apps that never talk. The CRM in one place, email in another, ad platforms somewhere else, and the rest in spreadsheets. When the customer journey is scattered, you cannot track LTV or CAC with any confidence, so you do the only thing you can and push the ads harder. Once everything logs into a single customer record, the question changes from "make the ad work harder" to "make the relationship more valuable." That single view is what we build for UK small businesses.
The widely accepted benchmark is at least 3 to 1, meaning every customer should be worth at least three times what they cost to acquire. In 2026 the cross-industry median sits around 3.2, and top performers reach 5 to 1 or higher. Below 3 to 1 usually means you are overspending to acquire. Above 5 to 1 can mean you are underinvesting in growth.
Multiply the average revenue per customer by your gross margin, then by how many years they stay. A customer paying £200 a month at 70% margin who stays 3 years is worth £5,040. In full: monthly revenue × margin × (years × 12).
Add up everything you spent winning customers over a period, including ads, agency fees, sales time and tools, then divide by the number of new customers you won in that same period. Spend £3,000 to win 10 customers and your CAC is £300.
Because your customer data is scattered across separate apps that never talk to each other. When the journey is fragmented, LTV and CAC become guesswork. Once every interaction logs into one connected customer record, the numbers become real.
AEO-REX helps UK small businesses get found by AI and see their customers clearly. Start with a free AI Visibility Check.
This calculator is for general guidance on unit economics and isn't financial advice. Benchmarks vary by business model.