Customer Lifetime Value Benchmarks for SaaS

LTV determines how much you can afford to spend on acquisition. These benchmarks help you understand if your unit economics are healthy.

LTV by Business Model

LTV varies dramatically based on pricing, contract length, and target customer. Self-serve SMB: $500-2,000 · Mid-market: $5,000-25,000 · Enterprise: $50,000-500,000+ · Usage-based: Varies widely - depends on expansion

LTV Calculation Methods

Different methods suit different business models. Simple LTV works for early-stage; cohort analysis is better at scale. Simple formula: ARPU ÷ Churn Rate · With gross margin: (ARPU × Gross Margin) ÷ Churn Rate · With expansion: (ARPU × Gross Margin) ÷ (Churn Rate − Expansion Rate)

Healthy LTV Ratios

LTV should be evaluated relative to CAC and payback period, not in isolation. LTV:CAC ratio target: 3:1 or higher · CAC payback period (good): < 12 months · CAC payback period (great): < 6 months · Net revenue retention target: > 100% (ideally > 120%)

Related

• All benchmarks
• Glossary: LTV
• Glossary: CAC
• Revenue Leak Scanner