A plain-English explanation of LTV:CAC logic, variable meanings, and edge cases that confuse most users.
Most “wrong answers” are input problems, not calculator problems. A quick pass through the LTV:CAC logic makes it easier to enter the right numbers.
If you can explain how AOV, gross margin, and retention connects to customer LTV and LTV:CAC ratio, you’re unlikely to be fooled by a fragile scenario.
The calculator translates your inputs into a consistent model so you can compare scenarios with the same rules.
Change one variable at a time and confirm the output direction matches intuition.
Most sensitivity lives in 2–3 fields: AOV, gross margin, and retention.
When the result surprises you, simplify the scenario and confirm each field definition.
Avoid impossible combinations (negative values, unrealistic rates, mismatched time horizons).
If the outcome is close to your threshold, run a conservative downside case before deciding.