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Why calculate customer lifetime value in SaaS?
Because one number can tell you how much a single customer is worth — and whether your business model actually works.
Customer lifetime value (or SaaS LTV) connects your revenue, customer retention, and acquisition costs. Get it right, and you’ll know how much to spend to acquire a new customer, which customer segments bring the most value, and how to scale sustainably.
In this article, we’ll break down the most common LTV formulas, when to use each, and how to increase the lifetime value of a customer over time.
Why calculate customer lifetime value in SaaS?
Because one number can tell you how much a single customer is worth — and whether your business model actually works.
Customer lifetime value (or SaaS LTV) connects your revenue, customer retention, and acquisition costs. Get it right, and you’ll know how much to spend to acquire a new customer, which customer segments bring the most value, and how to scale sustainably.
In this article, we’ll break down the most common LTV formulas, when to use each, and how to increase the lifetime value of a customer over time.
