Unit Economics · Growth Velocity
Allowable CAC Calculator
Calculate the maximum CAC your business can sustainably afford — and understand how a higher allowable CAC translates into faster growth, more market share, and the ability to outspend competitors while staying profitable.
Allowable CAC is not just an accounting number. It is a strategic weapon. Higher allowable CAC means winning more auctions, capturing more share, faster — while staying profitable. RGM's growth-strategy training shows how to use this leverage.
Start the training →The two anchors
LTV anchor: Maximum CAC = LTV ÷ target ratio. If your LTV is $500 and your target ratio is 3:1, your allowable CAC is $167.
Payback anchor: Maximum CAC = monthly contribution × target payback months. If you make $50/mo contribution per customer and your tolerance is 12 months payback, your allowable CAC is $600 (regardless of LTV).
The lower of the two is your binding constraint. If you have aggressive payback tolerance and strong LTV, you have a large allowable CAC and competitive advantage. If either is weak, your allowable CAC is small and you lose paid auctions to competitors with better economics.
Sources for methodology and benchmarks
- David Skok — For Entrepreneurs SaaS metrics articles
- OpenView SaaS Benchmark Reports
- SaaS Capital annual surveys
- Common Thread Collective DTC benchmark publications
- RGM operator notes — allowable CAC engagements 2023–2026