Question 1

What is LTV:CAC Ratio?

Accepted Answer

The LTV:CAC ratio measures the relationship between the lifetime value of a customer (LTV) and the cost to acquire them (CAC). It's the ultimate indicator of SaaS unit economics.

Question 2

What is a good LTV:CAC Ratio?

Accepted Answer

The gold standard for SaaS is 3:1 or higher. This means you make 3x what you spend to acquire a customer. Less than 1:1 means you lose money on acquisition. Higher than 5:1 means you could probably grow faster by spending more on marketing.

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