Customer lifetime value, LTV:CAC ratio, and CAC payback period from ARPU, margin, churn, and CAC.
LTV:CAC compares what a customer is worth over their lifetime (LTV) to what it costs to acquire them (CAC). The classic benchmark is 3:1 - every $1 spent acquiring a customer should return $3 in gross profit. Under 1:1 means you lose money on every sale; over 5:1 often means you're under-investing in growth.
LTV here = monthly gross profit per customer ÷ monthly churn rate. CAC payback tells you how many months until a customer has repaid their own acquisition cost - under 12 months keeps cash flow sane for a bootstrapped product.
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