SaaS Benchmarking – Key Metrics Payback and LTV/CAC Ratio

SaaS Benchmarking – Key Metrics Payback and LTV/CAC Ratio

This post provides SaaS entrepreneurs, Business Managers and Investors with the top 75 best practice benchmarks for your SaaS and Software Business. Within this chapter we are covering Benchmarks to understand the Key Metrics Customer Acquisition Cost (CAC), Customer Lifetime Value (CLTV), Payback and the CLTV/CAC Ratio.

The Benchmarks listed below particularly help you to understand the short-term and long-term viability of your case:

  • The short-term indicator Months to Recover CAC defines how fast you recover the CAC (ideally faster than 12 months).
  • The long-term indicator LTV/CAC shows how many times the LTV exceeds the CAC (ideally a ratio greater than three)

For a detailed introduction, please refer to our Infographic: Lean SaaS Metrics.

Customer Acquisition Cost (CAC) per dollar of new ACV by Primary Sales Model

Field Sales most expensive Sales Model – 50% of companies pay >$1 per dollar of new ACV


Retention Cost vs Acquisition Cost Tracking

Significantly more companies measure their customer acquisition costs, compared to their customer retention costs


Payback of Customer Acquisition Cost (CAC) based on Revenues and Gross Margin

CAC takes 1-2 years to payback

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