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boundary=836843afcab1964c533974592586ec15a176c019b5afcbfc8348a50781a4 Date: Mon, 14 Oct 2024 21:39:00 +0000 (UTC) From: Ryan Allis Mime-Version: 1.0 Message-ID: Subject: Calculating CAC & LTV Properly =?UTF-8?B?8J+nrg==?= - SaaS Growth Course Reply-To: Ryan Allis List-Unsubscribe-Post: List-Unsubscribe=One-Click List-Unsubscribe: =?us-ascii?Q?=3Cmailto=3A8a46fb20-5b78-45e0-ae38-2525b17867ca+1d17dc26-c1df-44e?= =?us-ascii?Q?0-812a-883b6ad5b6bc+8dfd116b-19b5-4aca-?= =?us-ascii?Q?8837-46ce80743421=40unsub=2Ebeehiiv=2Ecom=3E=2C?= =?us-ascii?Q?_=3Chttps=3A=2F=2Fsaasrise=2Ebeehiiv=2Ecom=2Funsubscribe=2FeyJ0eXAiOiJKV1QiLCJh?= =?us-ascii?Q?bGciOiJIUzI1NiJ9=2EeyJzdWJzY3JpYmVyX2lkIj?= =?us-ascii?Q?oiMWQxN2RjMjYtYzFkZi00NGUwLTgxMmEtODgzY?= =?us-ascii?Q?jZhZDViNmJjIiwicG9zdF9pZCI6IjhkZmQxMTZi?= =?us-ascii?Q?LTE5YjUtNGFjYS04ODM3LTQ2Y2U4MDc0MzQyMSI?= =?us-ascii?Q?sImxhc3RfcmVzb3VyY2VfZ3VpZCI6IlBvc3Q6OG?= =?us-ascii?Q?RmZDExNmItMTliNS00YWNhLTg4MzctNDZjZTgwN?= =?us-ascii?Q?zQzNDIxIn0=2E480O9isGBq2QD3nnp1OjM9OucOTY?= =?us-ascii?Q?6a2yHaf735wsrnE=3E?= x-beehiiv-type: newsletter x-list-id: 8a46fb20-5b78-45e0-ae38-2525b17867ca x-beehiiv-ids: =?us-ascii?Q?{=22account=5Fname=22=3A=22https=3A=2F=2Fsaasrise=2Ebeehiiv=2Ecom=2F=22=2C=22campaign=5Fid=22=3A?= =?us-ascii?Q?=228dfd116b-19b5-4aca-8837-46ce80743421=22=2C?= =?us-ascii?Q?=22category=22=3A=22newsletter=22=2C=22email=5Fgenerate?= =?us-ascii?Q?d=5Fat=22=3A1728941925=2C=22user=5Fid=22=3A=228a46fb20-5b?= =?us-ascii?Q?78-45e0-ae38-2525b17867ca=22}?= sId: 8a46fb20-5b78-45e0-ae38-2525b17867ca Feedback-ID: =?us-ascii?Q?8dfd116b-19b5-4aca-8837-46ce80743421=3Anewsletter=3A8a46fb20-5b78-?= =?us-ascii?Q?45e0-ae38-2525b17867ca=3Acfa52acda08d1fe?= x-newsletter-signup: https://saasrise.beehiiv.com/subscribe x-newsletter-id: https://saasrise.beehiiv.com/ x-newsletter: =?us-ascii?Q?https=3A=2F=2Fsaasrise=2Ebeehiiv=2Ecom=2Fp=2Fcalculating-cac-ltv-accurately-?= =?us-ascii?Q?saas-growth-course?= x-list-owner: X-SG-EID: =?us-ascii?Q?u001=2Esr+Zi4HchtZiAIrGLItAkqAJLamgo33aet=2FuqlkyaJPf=2Fx4cfuqMKIwYl?= =?us-ascii?Q?dAofkCR68C2a3749fFAiIGPJkwLFT=2Fgv8qtV1J+?= =?us-ascii?Q?a4H9IVrZYnTHRL66ejlSXzMVxfYvIepUMkEJPJh?= =?us-ascii?Q?aphDnqFT4atJCvW+cY7dB7NC9jHMcpX5KW9WBmn?= =?us-ascii?Q?nBhTuxTzaI3Qe2cbkt5mp9mYbVrq91DYg0WU2to?= =?us-ascii?Q?wZYCz+xbUj67ssOGjjFy9F=2F2Tv4wBRltP9YRogB?= =?us-ascii?Q?VUr4?= X-SG-ID: =?us-ascii?Q?u001=2ESdBcvi+Evd=2FbQef8eZF3BpTL9BgbK5wfSJMJGMsmprAVgeiC8iaV7rEmQ?= =?us-ascii?Q?+cYi2k75ZFOeSRhILfBshbjzEnPlPF1bgt3Y3I4?= =?us-ascii?Q?Br5mLeXewfC5YjKw14TscYxuHQu0W9Z8VD0dFNq?= =?us-ascii?Q?DkU4QkZKT8q1S29N3fzFA1tCB6Aty9BHl5PNZEX?= =?us-ascii?Q?VnAYBSm4=2FDpANQ0q87IFYhNQXk4B8mbbanuz0JZ?= =?us-ascii?Q?SCLCDmmcRAG0BEtEjojjxZddZe6vgi3wygf0MXv?= =?us-ascii?Q?pLT04lGMYX5OOhlZiTw1M78YfQ=3D=3D?= To: "andrew@sterlingcal.com" X-Entity-ID: u001.sWV69YT6CipfOgvvxr5vQg== X-Spam-Status: No, score=-3.3 X-Spam-Score: -32 X-Spam-Bar: --- X-Spam-Flag: NO --836843afcab1964c533974592586ec15a176c019b5afcbfc8348a50781a4 Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset=utf-8 Mime-Version: 1.0 Hi Andrew, This week I=E2=80=99m covering **how to properly calculate CAC and LTV for = a SaaS Business** =E2=80=93 and calculate the all important** LTV:CAC ratio= .** For your LTV:CAC ratio, target 6:1 for most SaaS firms for the optimal bala= nce between profit and growth (around 4:1 for **venture-backed** where you= =E2=80=99re going for growth at all costs or 8:1 for **bootstrapped** where= profit matters). Here=E2=80=99s [this week=E2=80=99s Loom video](https://www.loom.com/share/= 4bfc1035a80e4adf91a7f2c8214098a2) and [Google slides](https://docs.google.c= om/presentation/d/1XKE2lJ2DQip9gJJA1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide= =3Did.g21bfa29ed9e_1_134), both created by Ryan Allis, founder of [SaasRise= ](https://saasrise.com/) and iContact ($169M exit). To access to all 26 les= sons at once, [apply to join the community here](https://saasrise.com/) or = log in to your [member portal](https://my.saasrise.com/). Video: Calculating CAC & LTV =F0=9F=91=80 (https://www.loom.com/share/4bfc1= 035a80e4adf91a7f2c8214098a2) Apply to Join SaasRise =F0=9F=94=A5 (https://saasrise.com/) Now, let=E2=80=99s jump in to the good stuff=E2=80=A6 =F0=9F=94=A5 ## **Calculating Your CAC & LTV (+ Full Unit Economics) **=F0=9F=A7=AE Here=E2=80=99s [the full video on CAC and LTV](https://www.loom.com/share/4= bfc1035a80e4adf91a7f2c8214098a2), followed by a summary below for easy scan= ning=E2=80=A6 feel free to pass this along to your co-founder or Head of Gr= owth. View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXfEijKrL2OKUNg= fIXb3oSfc-vnuf7FzQj90Luz9Yinjitd3yDinXaY0adSZFeg2yVVbE20h6dtDhUaUMEvjMJFLBw= AcKvEy8e-rKBfDxaO2f7tn3ZTBbvgRpsz7PWuFzX3jvFT8xc6jUSgNWFGZ8eUS5ugt?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://www.loom.com/share/4bfc1035a80e4adf91a7f2c82140= 98a2) Caption: A deep dive into how to calculate CAC, LTV, lifespan, churn, and p= ayback months In the [Loom video](https://www.loom.com/share/4bfc1035a80e4adf91a7f2c82140= 98a2), I explain how to properly calculate Customer Acquisition Cost (CAC) = for a SaaS company as well as all the key unit economics including: 1. CAC - Customer Acquisition Cost 2. ARPA - Average Revenue Per Account (aka ACV) 3. Account Churn - Percentage of accounts who cancel monthly 4. Lifespan - Average months a client stays 5. LTV - Estimated lifetime revenue from a client 6. Payback Months - Number of months of revenue to recoup S&M spend 7. LTV:CAC Ratio - The ratio of how much bigger your average customer value= is compared to the cost to acquire a customer, target around 6:1 for most = SaaS firms.=20 Here=E2=80=99s a [free template to calculate your own unit economics](https= ://docs.google.com/spreadsheets/u/1/d/14DyL5Lik-9oL8wIKeHgVbIAqAi_kNKAky1Ta= HEPXFBI/copy?pli=3D1) (copy it and edit) to help you calculate your Target = CAC and Target Payback months =E2=80=94 so that you know in advance of spen= ding on various marketing channels what your results need to be to allow fo= r scalable and repeatable revenue growth. You can also get these figures calculated for you by syncing up your billin= g or accounting system onto ProfitWell or SaaSGrid (free) or on a free tria= l of ChartMogul or Baremetrics.=C2=A0Just load in the data and wait a few h= ours for it to sync. Stripe also can provide a good enough LTV estimate if= you bill only via cards. ## **This Week=E2=80=99s Key Slides **=F0=9F=9B=9D Here are the most important [slides](https://docs.google.com/presentation/d= /1XKE2lJ2DQip9gJJA1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_= 1_134) we cover in this week=E2=80=99s unit economics lesson=E2=80=A6 View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXe73Xqguf4TdT5= g1lXaVSIPTiFzQya4SpMYxAD56icgc-gNCBhQ9Nar1dgQ5kRphYze8wjF64M2W5U39diLfN0Nzv= -FIk7AG4a7Hu8azPyaORgmUAdHBlQAPUn5Oqq5Psc0ejsYxM695YeauiZDLBjiGFWL?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption: See the full SaaS Growth Course slides here View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXeCIeWvo9X_yzT= Ou6Fe1gUa4pdePe7x2iz4h0CspbMVFzv980HprOJMY8d72Wy-oRITF8wgk5vyCCDVCxk21LKO9-= IVj54UIkZ-qe1fZKpfdIcAqZvGQ91rg18uiHUyeQBVUWuk4PyHxAvvxakI97opBsAK?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption: See the full SaaS Growth Course slides here View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXfVLlf37XRXG5k= eBJtUOv5ma53RqpxNpAt6xKKy1-YUJRHiooalHgS5VWxWoN4TbUKJi57ox7lbSfM2nEq258j1r-= vGYgb0sqoX-VfdY-VYax4u6cwkQt9WPZYq-J30v0uUNhkZwcKVnez4u0OIN2FAKXGv?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption: See the full SaaS Growth Course slides here View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXdvifU2GY6Hbt7= KgMrBFmSTVl6BThtsX21BIbFXsD1M0cLPFvaY3gCxWUXXJdIawY1KTZS3y4cvP-LC4sKTgZx-QA= buJqCjZbIGuOFe76O7bExmO1uRwSs4sjbQFs8b4ucTRY7oX2kOPr_b5Fvo4HdSqys?key=3D79u= 5IBXXYg71ZsyE7XMsrg) Caption: See the full SaaS Growth Course slides here View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXdYYx4sLO1EEa7= ZCsZDNR5SUNwSKRcH0cwGufPNEwLKJg4Zql8rcmxCg84AUBh755RXqHG4U-zgIYjmrF6D570d13= YXQiwMEG7JGIfq1UROWJqy95krWASgKgmJ1Uvp8EZvsZ1T2085QjNEj0_zrI4t83FB?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption: See the full SaaS Growth Course slides here View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXcepximqa5nCME= PrTm5dz_yv74SA7N2sxRJarDxRZL4hEVNzTJrfFM0PAfgl-RpEhMqrzpa9OqQmuvsZBu5WP4Adh= mW3FJrTUTwDF1uhak0klDG5UXufx0-qiCFa4HHANW21pDYxj0mohtpzWZeTAc29b4d?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption: See the full SaaS Growth Course slides here View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXdd5_d0PSJ8SUK= uRDMZwYQgPaFKh1rmF549GS0L7fRcDAXNSN8tub7Ghxl_fX3femiJAR9nTPqs716EJ6pB3w_jVp= AoMF3JLy__peehByoi2tzG0dhM8KfH2UoaNvP353Eo-bZGm_Sye4BfIMUW2ChhPT4S?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption: See the full SaaS Growth Course slides here View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXe0TjqSn8tAOWB= shwyr2GoLm0yyq0RV5fraEFSkKfmn9wf6_UFziLxZQzWALwhbN8G6Uw4TgOLtmWZzyTqtSmX0IU= r4vm0O38GufpwDZhFNl9137DZ0a-TvPCl3X0-r_gMR8dCvDJsA__bM-O9u8PsrL_Lz?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption: See the full SaaS Growth Course slides here View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXfHgsljCqxOHbN= 2aBe28enbj5zoHB02JanwYY64HJf_oDzVn2y9s6uSIhKDbJaDIcwoROa-3Qq76EYaqnG4ra4G3N= JpCLRg9tEa8HuVLS9gjJUKlI5gzVcNWqF7-4JQDyo31LgDECLx387IwHArn-wrYSEv?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption: See the full SaaS Growth Course slides here ### **What=E2=80=99s Coming Via Email Weekly Over the Next 26 Weeks **=F0= =9F=93=85 I=E2=80=99ll be sharing this type of content every Monday for the next six = months. If you want access to the full course now, rather than waiting each= week to get it, just [apply here to join the SaasRise community](https://s= aasrise.com/) (all CEOs/Founders of SaaS firms with $1M+ in ARR are invited= to join).. Next week I=E2=80=99ll be covering SaaS Marketing Strategy. =F0=9F=8E=AF View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXdpT3CtK8tJESv= hal2eLhrUkmekAOKKPv4UcCquAV4Cl4zF1wZGXC9Q1-gEreBkeszLMIv0XTvciI8TTvmdPh2h4q= K-OAaAtRtKP8vTxyJeitO7v5oWdtUC5sL-K23G3kPYExmHLEhtliZPzE5SmuPVsT8F?key=3D79= u5IBXXYg71ZsyE7XMsrg) Follow image link: (https://docs.google.com/presentation/d/1XKE2lJ2DQip9gJJ= A1p5_BVpfbCofB2easMkhwI5lvgk/edit#slide=3Did.g21bfa29ed9e_1_134) Caption:=20 By the way, here=E2=80=99s what=E2=80=99s the [SaasRise](https://saasrise.c= om/) community directory looks like=E2=80=A6 we recently passed 350 members= , representing over $2.2 billion in collective ARR.=C2=A0Members can access= this via their [member portal here](https://my.saasrise.com/). View image: (https://lh7-rt.googleusercontent.com/docsz/AD_4nXeGWyQyNo3p8k6= yirn3k8v2odIjSxnVZNqxGkMhK1CmNLrVPvKhlrZJ8JSQzlx615a4TGN60x6MGtg7L_w3a7QYed= KSQCIUgswS2bBfFlZlQc_8e20iW6zcUEhNMDJRgbKtglf4KQEYOnu1kuKg7E6v8SZv?key=3D79= u5IBXXYg71ZsyE7XMsrg) Caption: Come join the SaasRise community at www.saasrise.com See you next week with a post on SaaS Marketing Strategy! -Ryan Until then, Ryan Allis, CEO & Founder SaasRise [www.saasrise.com](http://www.saasrise.com) The #1 Community for Experienced SaaS CEOs and Founders ### **About SaasRise Founder Ryan Allis** View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/95ce4977-1eff-4= 123-99fd-29b7974424a0/Ryan_Allis_Headshot_.jpg) Caption:=20 =E2=80=9C_Ryan Allis is the founder of _[SaasRise](https://www.saasrise.com= )_, the mastermind community for growth-focused SaaS CEOs with $1M-$100M in= ARR. He is a three time INC 500 CEO. He was previously CEO of iContact and= grew the firm as founder/CEO to 70,000 customers, 1 million users, 300 emp= loyees, $50M per year in sales, and an exit for $169M to Vocus (NASDAQ:VOCS= ). _ _Since the sale of iContact, Ryan has been the CEO coach to high-growth Saa= S firms including Instantly, Tatango, Seamless.ai, Pipeline, Datalyse, Gree= n Packet, Revenue Accelerator, RXNT, Galleon, Clearstream, YouCanBookMe, Re= treaver, and EventMobi. Ryan has been part of the EO and Summit Series comm= unities._ _He holds an MBA from Harvard Business School. He=E2=80=99s passionate abou= t helping recurring revenue software companies grow and exit for $100M+._= =E2=80=9C =E2=80=94=20 _We=E2=80=99ll see you next time with more great SaaS growth and scaling co= ntent!_ Apply to Join the SaasRise Community =F0=9F=94=A5 (https://www.saasrise.com= ) ## Free Website Growth & Conversion Audit from Overpass =E2=80=9C_[Overpass Studio](https://overpass.studio/)__ is a web design age= ncy for SaaS firms, with a laser focus on high-performance, high-converting= , Webflow websites for B2B SaaS scale-ups. Get a _[_free 45 min_](https://o= verpassstudio.gumroad.com/l/B2B-saas-website-growth-workshop/SAASRISE)[_ute= website growth and conversion audit_](https://overpassstudio.gumroad.com/l= /B2B-saas-website-growth-workshop/SAASRISE)_ from Overpass here (normal cos= t is $655 but FREE for SaasRise community members using the code SAASRISE).= Learn more _[_here_](https://overpassstudio.gumroad.com/l/B2B-saas-website= -growth-workshop/SAASRISE)_. They recently redesigned our website for us at= _[_www.saasrise.com_](http://www.saasrise.com)_. _=E2=80=9C =E2=80=94=20 View image: (https://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,forma= t=3Dauto,onerror=3Dredirect,quality=3D80/uploads/asset/file/59a0fd6a-de02-4= 40c-a6ed-7839f0963786/Screenshot_2024-07-08_at_2.14.04_PM-removebg-preview.= png?t=3D1720466060) Follow image link: (https://overpass.studio/) Caption:=20 =E2=80=94=E2=80=94=E2=80=94 You are reading a plain text version of this post. For the best experience,= copy and paste this link in your browser to view the post online: https://saasrise.beehiiv.com/p/calculating-cac-ltv-accurately-saas-growth-c= ourse --836843afcab1964c533974592586ec15a176c019b5afcbfc8348a50781a4 Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset=utf-8 Mime-Version: 1.0 Calculating CAC & LTV Properly =F0=9F=A7=AE - SaaS Growth Course<= !--[if mso]>96=
This week I cover how to calculate your SaaS CAC and LTV accurat= ely, covering lifespan, churn, payback months, and the ideal LTV:CAC ratio = to maximize profitable growth.  ‌ ‌ ‌ = ;‌ ‌ ‌ ‌ ‌ ‌&#= 160;‌ ‌ ‌ ‌ ‌ ‌= ; ‌ ‌ ‌ ‌ ‌ = 204; ‌ ‌ ‌ ‌ ‌ = ‌ ‌ ‌ ‌ ‌ ‌= 60;‌ ‌ ‌ ‌ ‌ ‌=  ‌ ‌ ‌ ‌ ‌ R= 04; ‌ ‌ ‌ ‌ ‌ &= #8204; ‌ ‌ ‌ ‌ ‌= 0;‌ ‌ ‌ ‌ ‌ ‌&= #160;‌ ‌ ‌ ‌ ‌ ̴= 4; ‌ ‌ ‌ ‌ ‌ &#= 8204; ‌ ‌ ‌ ‌ ‌ = ;‌ ‌ ‌ ‌ ‌ ‌&#= 160;‌ ‌ ‌ ‌ ‌ ‌= ; ‌ ‌ ‌ ‌ ‌ = 204; ‌ ‌ ‌ ‌ ‌ = ‌ ‌ ‌ ‌ ‌ ‌= 60;‌ ‌ ‌ ‌ ‌ ‌=  ‌ ‌ ‌ ‌ ‌ R= 04; ‌ ‌ ‌ ‌ ‌ &= #8204; ‌ ‌ ‌ ‌ ‌= 0;‌ ‌ ‌ ‌ ‌ ‌&= #160;‌ ‌ ‌ ‌ ‌ ̴= 4; ‌ ‌ ‌ ‌ ‌ &#= 8204; ‌ ‌ ‌ ‌ ‌ = ;‌ ‌ ‌ ‌ ‌ ‌&#= 160;‌ ‌ ‌ ‌ ‌ ‌= ; ‌ ‌ ‌ ‌ ‌ = 204; ‌ ‌ ‌ ‌ ‌ = ‌ ‌ ‌ ‌ ‌ ‌= 60;‌ ‌ ‌ ‌ ‌ ‌=  ‌ ‌ ‌ ‌ ‌ R= 04; ‌ ‌ ‌ ‌ ‌ &= #8204;
=

October 14, 2024   |   Read = Online

=

Calculating CAC & LTV Accur= ately =F0=9F=A7=AE - SaaS Growth Course

This week I cover how to calc= ulate your SaaS CAC and LTV accurately, covering lifespan, churn, payback m= onths, and the ideal LTV:CAC ratio to maximize profitable growth.

3D""
= =

H= i Andrew,

This week I=E2=80=99m covering how to properly cal= culate CAC and LTV for a SaaS Business =E2=80=93 and calculate t= he all important LTV:CAC ratio.

For your LTV:CAC ratio, = target 6:1 for most SaaS firms for the optimal balance between profit and g= rowth (around 4:1 for venture-backed where you=E2=80=99re going for = growth at all costs or 8:1 for bootstrapped where profit matters). <= /p>

Here=E2=80= =99s Google = slides, both created by Ryan Allis, founder of SaasRise and iContact ($169M exit). To access= to all 26 lessons at once, apply to jo= in the community here or log in to your member portal.

=
Video: Calculating CAC & LTV =F0=9F=91=80
Apply to Join SaasRise =F0=9F=94=A5
=

Now, let=E2=80= =99s jump in to the good stuff=E2=80=A6 =F0=9F=94=A5

Calculating Your CAC & LTV (+ Full Unit Economics) =F0=9F= =A7=AE

Here= =E2=80=99s the full video on CAC and LTV, followed by a summa= ry below for easy scanning=E2=80=A6 feel free to pass this along to your co= -founder or Head of Growth.

3D""

A deep dive into how to calculate C= AC, LTV, lifespan, churn, and payback months

In the Loom vide= o, I explain how to properly calculate Customer Acquisition Cost= (CAC) for a SaaS company as well as all the key unit economics including: =

  1. CAC - Custom= er Acquisition Cost

  2. ARPA - Average Revenue Per= Account (aka ACV)

  3. Account Churn - Percentage = of accounts who cancel monthly

  4. Lifespan - Aver= age months a client stays

  5. LTV - Estimated li= fetime revenue from a client

  6. Payback Months - = Number of months of revenue to recoup S&M spend

  7. LTV:CAC Ratio - The ratio of how much bigger your average customer value = is compared to the cost to acquire a customer, target around 6:1 for most S= aaS firms.

Here=E2=80=99s a <= span>free template to calculate your own unit economics (copy it= and edit) to help you calculate your Target CAC and Target Payback months = =E2=80=94 so that you know in advance of spending on various marketing chan= nels what your results need to be to allow for scalable and repeatable reve= nue growth.

= You can also get these figures calculated for you by syncing up your billi= ng or accounting system onto ProfitWell or SaaSGrid (free) or on a free tri= al of ChartMogul or Baremetrics.=C2=A0Just load in the data and wait a few = hours for it to sync. Stripe also can provide a good enough LTV estimate if= you bill only via cards.

This Week=E2=80=99s Key Slides =F0=9F=9B=9D

=

Here are the mo= st important slides we cover in this week=E2=80= =99s unit economics lesson=E2=80=A6

<= /tr>
3D""

See the= full SaaS Growth Course slides here

See the full SaaS Growth Course slides here

3D""

See the full SaaS Growth Course slid= es here

See the full SaaS Growth Course slides here

3D""

See the full SaaS Growth Course= slides here

<= /tr>
3D""

See the= full SaaS Growth Course slides here

See the full SaaS Growth Course slides here

3D""

See the full SaaS Growth Course slid= es here

3D""

See the full = SaaS Growth Course slides here

What=E2=80=99s Coming Via Email Weekly Over the Next 26 Weeks =F0=9F=93=85

I=E2=80=99ll be sharing this type of content every Monday for the next= six months. If you want access to the full course now, rather than waiting= each week to get it, just apply here = to join the SaasRise community (all CEOs/Founders of SaaS firms = with $1M+ in ARR are invited to join)..

Next week I=E2=80=99ll be covering SaaS Market= ing Strategy. =F0=9F=8E=AF

3D""

By the way, = here=E2=80=99s what=E2=80=99s the Saas= Rise community directory looks like=E2=80=A6 we recently passed = 350 members, representing over $2.2 billion in collective ARR.=C2=A0Members= can access this via their member port= al here.

=
3D""

Come join the SaasRise communit= y at www.saasrise.com

See you next week with a post on SaaS Marke= ting Strategy!

-Ryan

U= ntil then,
Ryan Allis, CEO & Founder
SaasRise
www.saasrise.com
The #1 Community for Experi= enced SaaS CEOs and Founders

About SaasRise Founder Ryan Allis

3D""

Ryan Allis is the founder of SaasRise, the mastermind community for = growth-focused SaaS CEOs with $1M-$100M in ARR. He is a three time INC 500 = CEO. He was previously CEO of iContact and grew the firm as founder/CEO to = 70,000 customers, 1 million users, 300 employees, $50M per year in sales, a= nd an exit for $169M to Vocus (NASDAQ:VOCS).

Since the sale of iContact, Ryan has been the CEO coa= ch to high-growth SaaS firms including Instantly, Tatango, Seamless.ai, Pip= eline, Datalyse, Green Packet, Revenue Accelerator, RXNT, Galleon, Clearstr= eam, YouCanBookMe, Retreaver, and EventMobi. Ryan has been part of the EO a= nd Summit Series communities.

He holds an MBA from Harvard Business School. He=E2=80=99s passionate= about helping recurring revenue software companies grow and exit for $100M= +.

We=E2=80=99ll see you next time with more = great SaaS growth and scaling content!

Update your email preferences or = unsubscribe here<= /p>

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