Definition
LTV (Lifetime Value) is the total revenue you expect from a customer; CAC (Customer Acquisition Cost) is what it costs to acquire one. The ratio tells you whether your growth machine is sustainable. A healthy SaaS ratio is roughly 3:1 — meaning every dollar spent acquiring a customer returns three. Below 1:1 you're burning money to grow. Above 5:1 you might be under-investing in growth. The other key number is payback period: how many months until a customer's revenue covers their CAC. Shorter is better — anything over 18 months means you need a long runway. AI agents can help you calculate these metrics correctly (lots of subtle traps), benchmark against your stage, and identify the levers to improve them.
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