The two numbers behind the ratio
Customer acquisition cost (CAC) is total sales and marketing spend divided by the number of new customers acquired over the same period. With $50,000 in marketing spend, $30,000 in sales spend, and 400 new customers, CAC is ($50,000 + $30,000) ÷ 400 = $200 per customer. David Skok's widely cited SaaS Metrics 2.0 framework, published via forEntrepreneurs.com, describes CAC as a foundational input to evaluating a company's growth efficiency alongside lifetime value.
Customer lifetime value (CLV or LTV) is the total gross-margin-adjusted revenue a business can expect from a customer over their relationship. The simplified formula multiplies average monthly revenue per customer (ARPU) by gross margin, then divides by monthly churn rate — mathematically the same as multiplying margin-adjusted monthly revenue by the expected customer lifetime (1 ÷ churn rate, in months).
A worked example: $2,000 CLV against $500 CAC
With $50 average monthly revenue, 80% gross margin, and 2% monthly churn: expected customer lifetime is 1 ÷ 0.02 = 50 months, and CLV is ($50 × 0.80) ÷ 0.02 = $2,000. Against a CAC of $500, the LTV:CAC ratio is $2,000 ÷ $500 = 4:1 — four dollars of lifetime value for every dollar spent on acquisition.
| LTV:CAC ratio | Common characterization |
|---|---|
| 3:1 or higher | Strong — commonly cited as an efficient balance between acquisition cost and lifetime value. |
| 1:1 to 3:1 | Viable — customers are profitable over their lifetime, but the margin above CAC may be thin for reinvestment. |
| Below 1:1 | Weak — acquisition cost exceeds expected lifetime value; customers aren't covering their own acquisition cost. |
Why 3:1 specifically — and why it's a rule of thumb, not a law
The 3:1 benchmark comes from Skok's SaaS Metrics 2.0, one of the most widely cited references for SaaS unit economics, and is treated across the industry as a commonly cited target for healthy, sustainable growth rather than an official standard. A ratio right at or below 1:1 signals the growth model isn't sustainable without improving CAC, CLV, or both. Interestingly, a ratio far above 3:1 isn't automatically better — SaaS metrics frameworks note it can sometimes indicate a business is underinvesting in growth, leaving money on the table that could otherwise fund faster customer acquisition.
LTV:CAC is also not the only efficiency metric worth tracking. Payback period — how quickly CAC is recovered from gross margin — net revenue retention, and growth rate are complementary metrics; a strong LTV:CAC ratio alongside a very slow payback period can still strain cash flow even while the ratio looks healthy on paper.
What moves the ratio
Because CLV divides margin-adjusted revenue by churn rate, small reductions in churn produce disproportionately large increases in CLV — cutting monthly churn from 2% to 1% doubles the implied customer lifetime from 50 to 100 months, and CLV along with it, all else equal. On the CAC side, blended CAC often hides that some acquisition channels are far more efficient than others, so comparing LTV:CAC by channel can reveal more than a single blended figure.
Часто задаваемые вопросы
What is a good LTV:CAC ratio?
A ratio of 3:1 is a commonly cited benchmark in SaaS metrics frameworks, such as David Skok's SaaS Metrics 2.0, for healthy, sustainable growth — $3 of lifetime value for every $1 spent on acquisition. A ratio below 1:1 signals acquisition cost exceeds expected lifetime value, while a very high ratio can sometimes indicate underinvestment in growth.
How is customer acquisition cost (CAC) calculated?
Add total marketing spend and total sales spend for a period, then divide by the number of new customers acquired in that same period. With $50,000 in marketing spend, $30,000 in sales spend, and 400 new customers, CAC is $200 per customer.
How is customer lifetime value (CLV) calculated?
A common simplified formula multiplies average monthly revenue per customer by gross margin, then divides by monthly churn rate. With $50 ARPU, 80% gross margin, and 2% monthly churn, CLV is ($50 × 0.80) ÷ 0.02 = $2,000.
Is a very high LTV:CAC ratio always a good sign?
Not necessarily. While a higher ratio generally indicates efficient unit economics, SaaS metrics frameworks note that a ratio well above 3:1 can sometimes mean a business is underspending on acquisition relative to the value each customer generates, potentially leaving faster growth on the table.
What other metrics should be tracked alongside LTV:CAC?
Payback period (how quickly CAC is recovered from gross margin), net revenue retention, and growth rate are commonly tracked alongside LTV:CAC. A healthy ratio combined with a very slow payback period can still create cash-flow strain that the ratio alone doesn't reveal.
Источники
- Skok D. SaaS Metrics 2.0 — A Guide to Measuring and Improving What Matters. forEntrepreneurs.com.
- Bessemer Venture Partners. State of the Cloud / Cloud Index — SaaS benchmark metrics. bvp.com.
- Kotler P, Keller KL. Marketing Management. 15th ed. Pearson, 2016.