In episode #288 of SaaS Metrics School, Ben Murray tackles a frequent mistake SaaS operators make when calculating Lifetime Value (LTV) — treating it as an aggregate rather than the point-in-time metric. Ben breaks down the correct formula, shares how to align it with gross revenue retention, and explains when LTV (and LTV to CAC) should be used SaaS businesses.
What You’ll Learn:
Why LTV is a point-in-time estimate, not a company-wide average
The correct formula for LTV in SaaS: Cohort ARPA × Gross Margin ÷ Churn
How to choose the right churn input using gross revenue retention
When LTV to CAC is reliable vs. misleading based on your sales motion (SMB, Mid-Market, Enterprise)
Common pitfalls when using LTV in low-volume enterprise models
Key SaaS Metrics Covered:
LTV (Lifetime Value)
LTV to CAC Ratio
Gross Revenue Retention (GRR)
Cohort ARPA / ACV
Churn measurement strategy (trailing 3 vs. 6 months)
Who Should Listen:
SaaS CFOs, founders, marketers, and RevOps professionals looking to improve financial modeling and SaaS efficiency metrics — especially if you rely on paid acquisition or track LTV to CAC closely.
Resources Mentioned:
SaaS Metrics Foundation Course: https://www.thesaasacademy.com/the-saas-metrics-foundation
Subscribe to Ben's SaaS newsletter: https://mailchi.mp/df1db6bf8bca/the-saas-cfo-sign-up-landing-page
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