What does LTV mean?
Lifetime Value - the total revenue you can expect from a single customer over the entire duration of their relationship with your product.
Indie context: The magic ratio indie hackers chase: LTV should be at least 3x your Customer Acquisition Cost (CAC). If your LTV is $300 and CAC is $100, you have a sustainable business model.
LTV
Lifetime Value - the total revenue you can expect from a single customer over the entire duration of their relationship with your product.
💡 The magic ratio indie hackers chase: LTV should be at least 3x your Customer Acquisition Cost (CAC). If your LTV is $300 and CAC is $100, you have a sustainable business model.
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Related Terms
MRR
Monthly Recurring Revenue - the predictable revenue a SaaS business generates each month from active subscriptions.
ARR
Annual Recurring Revenue - the yearly value of recurring subscription revenue. Calculated by multiplying MRR by 12.
Churn
The rate at which customers cancel their subscriptions or stop using your product. Usually expressed as a monthly or annual percentage.
SaaS
Software as a Service - a business model where software is hosted in the cloud and sold as a subscription, rather than a one-time purchase and download.
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