SaaS & Startups · Unit economics
The one ratio that says scale or stall.
Every subscription business lives or dies on lifetime value versus what it pays to acquire a customer. Enter four numbers to get LTV, the LTV:CAC ratio, and how many months until CAC pays back.
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Inputs
Receipts
Lifetime value (LTV)
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LTV : CAC ratio
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CAC payback
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How this is calculated
monthly_contribution = ARPA × gross_marginLTV = monthly_contribution / monthly_churnratio = LTV / CAC;payback = CAC / monthly_contribution
Read me
- Uses a simple constant-churn model — good for a directional read, not a cohort-level forecast.
- The 3:1 benchmark is a guideline; very low churn or expansion revenue can justify a different target.
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