Category
Series B Key Challenges
Series B Team’s org
Market Practices
🟠: 2-3x 🟡: 3-5x 🟢: >5x
Critical
⭐
Customer Lifetime Value (CLV) lets you know much revenue you can generate from a customer throughout your relationship with them before they leave (churn).
Is the lifetime value of a customer higher or lower than the cost of acquiring them?
Market Practices
🟠 GOOD
2-3x
🟡 BETTER
3-5x
🟢 BEST
>5x
From Revops Squared’s 2022 SaaS Benchmark:
"It’s agreed that 3:1 is a good LTV to CAC ratio, and you can interpret it as your business makes 3x what it costs to acquire a customer, or for every $1 spent on acquisition, you get $3 back. A ratio closer to 1:1 means you’re spending just as much on acquisition as customers spend, so you’re not generating a profit, and you can stand to improve your acquisition strategy. If your ratio is significantly higher than 3:1, like 6:1, you might not be spending enough on sales and marketing and are missing out on valuable opportunities to attract new customers." - From Hubspot “What Is a Good LTV to CAC Ratio?”