LTV:CAC Ratio · Technology
LTV:CAC Ratio for Technology.
The single most important unit-economics metric.
Technology companies built to compound.
Finance & Strategy · Technology
Why technology operators use the ltv:cac ratio.
Calculate the ratio of customer lifetime value to acquisition cost. Industry benchmark is 3:1 — below that, you're subsidizing growth; above 5:1, you're probably under-investing in acquisition.
Technology companies operate in a market that rewards speed, focus, and durable compounding. SAZ partners with founders and operators in software, SaaS, infra, and tech-enabled services to sharpen strategy, fix growth, and scale operations.
Benchmarks
What good looks like — typical ranges to compare against.
< 1×
Losing money on every customer
1–3×
Recovering acquisition — but slow
3–5×
Healthy — keep scaling
> 5×
Likely under-investing in acquisition
The formula
How ltv:cac ratio is calculated.
LTV:CAC = Customer Lifetime Value ÷ Customer Acquisition CostIndustry context
What changes when ltv:cac ratio is applied to technology.
PMF, positioning, and ICP
Growth model and channel mix
Pricing, packaging, and retention
Scaling org and ops
Run the numbers
Open the ltv:cac ratio.
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LTV:CAC Ratio · Technology
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