Lifetime value

Projected revenue a customer generates across the full relationship.

Frequently asked questions

How is LTV calculated for B2B SaaS?
Most commonly: ACV × Gross Margin × Average Customer Lifetime. "Lifetime" is computed from gross churn rate. 1 ÷ annual churn percent. So 10 percent annual churn = 10-year average lifetime.
What LTV-to-CAC ratio is healthy?
3:1 or higher for B2B SaaS. Below 3:1 the business is unit-economic-fragile; above 5:1 you're probably under-investing in growth. 3:1 to 5:1 is the sustainable zone.
What drives LTV most?
Net revenue retention. A 100-percent NRR account doubles its LTV vs an 80-percent NRR account, all else equal. Expansion is more valuable than acquisition for compounding LTV.
What's the most common LTV mistake?
Computing LTV on revenue instead of gross profit. Hardware, services, and infrastructure costs eat into LTV; revenue-LTV overstates the true value of a customer.
How does Landbase affect LTV?
Indirectly. By improving the fit of acquired customers. Well-fit customers churn less and expand more. Most LTV variance in B2B SaaS is explained by acquisition quality.