The LTV/CAC ratio compares the lifetime value of a customer to the cost of acquiring them, serving as a primary indicator of the efficiency and long-term profitability of a SaaS business model.
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What is the "Golden Ratio" for SaaS?
A ratio of 3:1 is the industry standard benchmark. If it's lower (e.g., 1:1), you are spending too much for each customer. If it's much higher (e.g., 8:1), you might be under-investing in growth.
Knowledge Challenge
Mastered LTV/CAC Ratio (Deep Dive)? Now try to guess the related 6-letter word!
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