When you’ve reached a certain level of success, say you’re at around $500k MRR, the biggest challenge (besides growing a bigger organization and mastering all kinds of growing pains of course) is to find ways to profitably acquire customers at a much higher scale. By this time you’ve picked all the low-hanging fruits, and you may have maxed out what you can reasonably spend on AdWords to buy traffic and leads.
The Angel VC: The 8th DO for SaaS startups - Stay on top of your KPIs Monday, December 23, 2013 @ 9:08pm
Therefore you’ll have to focus on the relationship between your CLTV and your CACs (customer acquisition costs), your CLTV/CAC ratio, which measures the ROI on your sales and marketing investments. Another way to look at it is your CACs payback time, which tells you how many months of subscription revenue it takes to recoup customer acquisition costs. If I had to choose I’d pick this one, since CLTV is always an estimate which can be more or less accurate.
