Five numbers in, and you get your CAC, your LTV, the ratio between them, and how long it takes to earn a customer back. The numbers investors ask for, and most founders can't answer.
£
£
%
The share of revenue left after the cost of delivering it. SaaS is often 70 to 90%.
%
The share of customers you lose each month. 4% a month is roughly a two-year average life.
LTV to CAC ratio
–
CAC (cost to acquire)
–
LTV (lifetime value)
–
CAC payback
–
Avg customer life
–
Enter your numbers
Rules of thumb: an LTV to CAC ratio of 3 or higher is healthy, and below 1 means you lose money on every customer you acquire. You want to earn your CAC back in under a year for most software. And retention is the biggest lever on all three, because lowering churn lengthens the life, lifts the LTV and shortens the payback at once.
Want a fuller read on your economics and a second opinion?
Leave your details and we'll send you a deeper look at your numbers, with specific thoughts on the levers that would move them most. If they look strong, or look like they need a hand, someone from Product Pieces may follow up. No spam.