Understanding Your Metrics
LTV (Lifetime Value) is the total revenue you expect to earn from a single customer over the duration of their relationship with your product. Formula: ARPU / Monthly Churn Rate.
CAC (Customer Acquisition Cost) is the total cost of sales and marketing efforts required to acquire a new customer.
LTV:CAC Ratio measures the efficiency of your acquisition. A ratio of 3:1 is generally considered the benchmark for a healthy, growing SaaS business.