Discover if your sales and marketing model is sustainable or burning cash. The single most important SaaS metric.
Marketing + Sales Spend ÷ New Customers.
Average recurring revenue paid by a single user per month.
Revenue minus direct cost of goods/services (Hosting, Support).
How many months the average user stays subscribed (or 1 ÷ Monthly Churn).
Your guide to SaaS metrics. Understand LTV, CAC, and what VCs look for.
The LTV:CAC ratio measures the relationship between the Lifetime Value of a Customer (LTV) and the Customer Acquisition Cost (CAC). It is the fundamental metric that tells you how efficiently your sales and marketing engine generates value. Are you spending ₹10k to acquire a customer that only yields ₹5k in lifetime profit? This ratio exposes that instantly.
Venture Capitalists broadly agree on benchmarks for SaaS businesses:
You can manipulate three core levers: Increase ARPU by cross-selling or raising prices, Decrease Churn (which increases lifespan) by improving customer success, or Decrease CAC by optimizing organic SEO or improving sales conversion rates.
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