Marketing ROI Calculator
Marketing ToolsSpend to profit across the whole funnel — CPL, CAC, LTV, ROMI and payback.
Over their lifetime. 1 means one-and-done.
Used to work out how long CAC takes to repay.
Return on marketing investment
20%
Net profit ₹1,00,000
(gross profit − spend) ÷ spend × 100
LTV:CAC is 1.2:1
Between 1:1 and 2:1. You are barely covering the cost of acquiring a customer.
- Cost per lead
- ₹500
- spend ÷ leads
- Customers won
- 100
- leads × close rate
- CAC
- ₹5,000
- spend ÷ customers won
- LTV
- ₹6,000
- order value × margin × purchases per customer
- Revenue
- ₹15,00,000
- customers × order value × purchases
- Gross profit
- ₹6,00,000
- revenue × margin
- CAC payback
- 10 mo
- CAC ÷ monthly gross profit per customer
- Net profit
- ₹1,00,000
- gross profit − spend
ROMI here is calculated on gross profit, not revenue — revenue-based ROI flatters every campaign that sells at a thin margin.
How this is calculated
CPL = spend / leads customers = leads x close rate CAC = spend / customers revenue = customers x AOV x purchases per customer LTV = AOV x gross margin x purchases per customer ROMI = (gross profit - spend) / spend x 100 payback = CAC / monthly gross profit per customer
How it works
A single ROI percentage tells you whether last month was up. It does not tell you which part of the funnel is broken. This models the whole chain — spend to leads to customers to profit — so you can see whether the problem is lead volume, lead quality, close rate, order value or margin.
The output that matters most is the LTV:CAC ratio. It asks whether a customer is worth more than they cost to acquire, and by how much. The conventional benchmark is 3:1. Below 1:1 you are paying more for customers than they will ever return, and no amount of extra volume fixes that — it makes it worse faster.
ROMI here is calculated on gross profit, not revenue. Revenue-based returns flatter every business selling at a thin margin, which is precisely the business that most needs an honest number.
Worked example
₹5,00,000 spend, 1,000 leads, 10% close rate, ₹15,000 AOV, 40% margin, one purchase each
- CPL = 500000 / 1000 = 500
- customers = 1000 x 0.10 = 100
- CAC = 500000 / 100 = 5000
- LTV = 15000 x 0.40 x 1 = 6000
- LTV:CAC = 6000 / 5000 = 1.2
- ROMI = (600000 - 500000) / 500000 x 100
ROMI 20%, but LTV:CAC only 1.2:1 — technically profitable, dangerously thin
How to use it
- Enter your marketing spend and the number of leads it produced.
- Set your lead-to-customer close rate, average order value and gross margin.
- Set purchases per customer over their lifetime — leave it at 1 if the business is one-and-done.
- Read the LTV:CAC ratio and the verdict alongside it. That, not ROMI, is the number that tells you whether to spend more.
What this tool does not do
- It assumes every lead came from the spend entered. Organic and referral leads mixed in will understate your true CAC.
- Lifetime value here is a simple contribution-margin model. It does not discount future cash flows or model churn.
- It treats close rate and order value as constants, when both usually vary by channel.
Frequently asked questions
How do you calculate marketing ROI?
Subtract marketing spend from the gross profit it produced, divide by the spend, and multiply by 100. Using gross profit rather than revenue is what makes the figure honest.
What is CAC and how is it calculated?
Customer acquisition cost is total marketing spend divided by the number of customers acquired. If ₹5,00,000 of spend produced 100 customers, CAC is ₹5,000.
What is a good LTV:CAC ratio?
3:1 is the conventional benchmark — a customer worth three times what they cost to acquire. Much higher can mean you are underinvesting in growth; below 1:1 means every new customer loses money.
How do you calculate customer lifetime value?
Multiply average order value by gross margin by the number of purchases a customer makes over their lifetime. This is the simple contribution-margin version, which is the right one for a marketing decision.
What is CAC payback period?
How many months of gross profit from a customer it takes to recover what you spent acquiring them. Shorter is better because cash comes back sooner and funds the next cohort.
What is ROMI?
Return on marketing investment — the same idea as ROI but measured specifically on marketing spend against the gross profit it generated.
Should I include salaries in marketing spend?
For a true CAC, yes: fully loaded spend includes salaries, tools and agency fees, not just media. Many reported CAC figures use media cost only, which is why they look flattering.
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Last updated 3 September 2026.