Question 1

What is customer lifetime value?

Accepted Answer

LTV is the total revenue a customer generates over their entire relationship with your business. For SaaS, it equals ARPU divided by monthly churn rate.

Question 2

What is a good LTV-to-CAC ratio?

Accepted Answer

A 3:1 ratio is the benchmark. If your LTV is $300, your CAC should be under $100. Below 1:1 means you are losing money on every customer.

Question 3

How do I increase LTV?

Accepted Answer

Reduce churn, increase ARPU through upselling, and extend customer lifetime through better onboarding and support.

LTV Calculator: Understand Your Customer Lifetime Value