marketingSaaS
LTV:CAC Ratio in SaaS (Software as a Service)
The ratio of customer lifetime value to customer acquisition cost, measuring acquisition efficiency.
SaaS LTV:CAC Benchmarks
Low
2x
25th percentile
Median
3.5x
50th percentile
High
6x
75th percentile
Elite
8x
Top 10%
Subscription revenue enables high LTV
Higher is better
What Affects LTV:CAC?
Customer retention rate
Average order value
Purchase frequency
Upsell/cross-sell success
Customer acquisition cost
Product-market fit
How to Improve LTV:CAC
1
Focus on customer retention
2
Develop upselling strategies
3
Reduce churn with better onboarding
4
Optimize acquisition channels for quality
5
Build loyalty programs
6
Monitor competitor pricing and value
LTV:CAC in Other Industries
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