LTV tells you how much a customer is worth. LTV:CAC tells you if acquiring them makes sense. Most companies get the first part right and the second part wrong.
B2B SaaS Customer Lifetime Value (LTV) benchmarks: SMB $15K-$40K, Mid-Market $80K-$200K, Enterprise $300K-$1M+. The real benchmark isn't LTV alone—it's LTV:CAC ratio. Target: 3:1 minimum, 5:1+ for efficiency. Median B2B SaaS LTV:CAC is 3.2:1. Payback period matters more than absolute LTV for cash-constrained companies. Source: Optifai Sales Ops Benchmark 2025 (N=612 companies with cohort data).
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You're spending too much to acquire customers who don't stay long enough. Either CAC is bloated (inefficient sales/marketing) or LTV is suppressed (high churn, no expansion). Fix before scaling.
Many early-stage companies operate here while finding product-market fit. Sustainable if you have capital, but limits growth reinvestment. Focus on retention improvements before scaling acquisition.
Sweet spot for most B2B SaaS. Enough margin to reinvest in growth while maintaining profitability. Investors like to see this range at Series A and beyond.
Great efficiency—but question whether you're leaving growth on the table. Could you spend more on acquisition and still maintain 3:1? High LTV:CAC sometimes signals you should be more aggressive.
Here's what pitch decks don't show: most LTV calculations are based on projected customer lifespans, not actual data. A company with 6 months of history projecting 5-year LTV is guessing.
Track cohort LTV by signup month for at least 12 months before projecting. Use observed data, not formulas. If you must project, apply a 30% haircut to account for uncertainty. Investors who've seen enough decks will do this anyway.
2-3 year lifespan typical. Lower ACV but faster acquisition. Volume game.
3-5 year lifespan. Balance of volume and value. Sweet spot for many.
5-7+ year lifespan. Multi-year contracts. Expansion can 3x initial deal.
Note: These ranges assume healthy retention (monthly churn <2% for SMB, <1% for Enterprise). Poor retention can cut LTV by 50% or more.
For cash-constrained startups, a $50K LTV customer who takes 24 months to pay back CAC is worse than a $30K LTV customer who pays back in 8 months. Cash flow trumps theoretical lifetime value.
| Metric | Customer A | Customer B |
|---|---|---|
| LTV | $50,000 | $30,000 |
| CAC | $15,000 | $6,000 |
| LTV:CAC | 3.3:1 ✓ | 5:1 ✓✓ |
| Monthly Revenue | $1,200 | $800 |
| Payback Period | 15.6 months | 9.4 months |
| Cash Available for Reinvestment | Slower | Faster |
Target payback: <12 months for SMB, <18 months for Mid-Market, <24 months for Enterprise.
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Data last updated: November 25, 2025
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