LTV SaaS Calculator - How to calculate LTV for SaaS. LTV (Customer Lifetime Value) is a key SaaS planning metric. It represents the average revenue per customer before they churn, taking into account gross margin. LTV is a key metric when compared to CAC (Customer Acquisition Cost).
ARPA (Average Revenue Per Account (Average MRR across all accounts)
Gross Margin % - The difference between revenue and COGS (Cost Of Goods Sold). This is typically extremely high in SaaS (>80%)
Customer Churn Rate %. According to Bessemer Venture partners, an acceptable SaaS Churn Rate is 5-7% Annually for SaaS companies. This equates to 0.42-0.58% monthly churn.
LTV - Customer Lifetime Value
This CAC SaaS tool calculates simple Customer Acquisition Cost (CAC), a key SaaS benchmark. CAC equals Total Sales and Marketing Cost divided by Customers Added. Optional inputs in this calculator allow for modeling out an updated CAC based on an additional demand generation marketing spend and traditional MQL/SAL/SQL/Closed Won funnel stages and ratios.
