Customer Lifetime Value (LTV)
$
%
%/mo
Customer Acquisition Cost (CAC)
$
months
โ
LTV : CAC Ratio
Customer LTV
โ
lifetime value
CAC
โ
to acquire 1 customer
CAC Payback
โ
months to recover CAC
Avg. Customer Life
โ
months before churn
Industry Benchmarks
< 1:1
Losing money on every customer
Critical
1:1 โ 3:1
Marginal โ needs improvement
Below target
3:1 โ 5:1
Healthy โ SaaS gold standard
โ
Healthy
> 5:1
Excellent โ may be under-investing in growth
Excellent
๐ก Formula: LTV = (ARPU ร Gross Margin %) / Monthly Churn Rate ยท CAC = Monthly S&M Spend / New Customers ยท Payback = CAC / (ARPU ร Gross Margin %)