Glossary
What Is LTV in SaaS?
LTV (Lifetime Value) is the total revenue one customer generates over their entire subscription with your SaaS product. Basic formula: average monthly revenue per customer multiplied by average customer lifespan in months. For a $10/month product with 14-month average retention, LTV = $140.
LTV (Lifetime Value) explained
LTV tells you how much a customer is worth — which directly determines how much you can afford to spend acquiring them (CAC). If your LTV is $140 and your CAC is $100, you're barely breaking even. If your LTV is $140 and your CAC is $30, you have a healthy 4.7x ratio. Factors that increase LTV: - Higher pricing (charges more per month) - Lower churn (customers stay longer) - Expansion revenue (customers upgrade or buy add-ons) - Better onboarding (reduces early cancellation) For solo SaaS founders, the most actionable lever is churn reduction. Getting a customer from 6-month to 12-month average retention doubles your LTV overnight — without changing pricing or acquiring a single new user.
Why this matters for SaaS marketing
Understanding LTV helps you set realistic ad budgets. If your LTV is $50, you can't afford a $100 CAC — no matter how good your ads are. Infinall's Strategy Agent factors in your pricing when recommending budget allocation, ensuring your campaign economics make sense before a dollar is spent.
Frequently asked questions
How do I calculate LTV if I just launched?+
Use your best estimate of monthly churn. If 10% of customers cancel each month, average lifespan is 10 months. Multiply by your monthly price. As you get real data over 3–6 months, update the number.