Last week we were super psyched to launch our CAC Calculator, the first of many Married2Growth SaaS Tools. Today, we’re excited to bring you a follow-on, the LTV Calculator. This one helps you quickly estimate SaaS customer lifetime value and if you have your CAC, it also calculates your LTV-to-CAC Ratio. Like CAC, LTV is another one of the numbers I focus on in my recent Guide to SaaS Growth Metrics eBook.
Lifetime Value SaaS Growth Metric
LTV is an estimate of how much recurring revenue the average customer will generate over the course of their lifetime. It takes MRR and expansion revenue, as well as churn into account, making it a highly valuable management and institutional metric. LTV is a quick way to estimate and run ratios against acquisition cost to look at the business model and execution risk.
The LTV Calculator
We chose to keep our SaaS LTV Calculator (below) relatively basic. If you know your MRR, your number of paying customers, and your monthly revenue or customer churn rate, we’ll instantly calculate your LTV estimate. And, if you also know your CAC, we’ll give you a quick ratio of LTV to CAC along with some notes on how that might reflect on your business. (If you don’t know you CAC and you want that ratio, run the CAC Calculator first.)
A couple of things to note here (that apply to all of our tools). First, your data is private. We don’t share anything with anyone. And second, the only time we ask you for your name and email address is if you want your results emailed to you. Otherwise, use these calculators all you want — unfettered and ungated. As many of you know, I’m a big proponent of ungated content (eBooks notwithstanding).
So please, again, give us feedback and by all means, tell us if you find a bug. These calculators are new and we all make mistakes. As always, we hope you find these tools useful as you grow your SaaS business. And if you’re looking for more around the LTV topic, try these articles. Cheers.
Updated September 5, 2018, to include expansion revenue and to surface ARPU and customer lifetime in months.