How it's worked out
Repeat purchases: order value × purchases a year × years. Subscription: monthly revenue ÷ monthly churn, because average lifetime in months is 1 ÷ churn.
Revenue LTV flatters you. What you can spend to win a customer comes out of the profit they bring in, so the headline number uses gross margin.
Ratio is gross-profit LTV ÷ CAC. Payback is how many months of gross profit it takes to earn back CAC. Under 12 months keeps cash flow comfortable for most small businesses.
Benchmarks are rules of thumb, not targets for every business. Retention estimates are the biggest source of error, so use your own repeat-purchase data where you can.
LTV looks fine but the ads still lose money?
Ecomtoolpack has 12 Claude skills for online stores that find the stage leaking your profit, from ad click to repeat order. $29.99 once, no subscription.