LTV to CAC Ratio vs MRR
What is the difference between LTV to CAC Ratio and MRR? Side-by-side definitions, formulas, and benchmarks for two of the most-watched SaaS metrics.
Definitions
What is LTV to CAC Ratio?
LTV to CAC Ratio compares customer lifetime value against customer acquisition cost to evaluate acquisition efficiency.
Full LTV to CAC Ratio definition →
What is MRR?
MRR is monthly recurring revenue, the normalized monthly subscription revenue base of a SaaS company.
LTV to CAC Ratio vs MRR at a Glance
| LTV to CAC Ratio | MRR | |
|---|---|---|
| Category | Metrics | Metrics |
| Formula | LTV:CAC Ratio = LTV / CAC | MRR = Paying Customers × ARPA |
| Benchmarks | good: 3 x; great: 6 x | — |
| Calculator | LTV to CAC Ratio calculator | MRR calculator |
When Each Matters
LTV to CAC Ratio and MRR answer different questions. LTV to CAC Ratio compares customer lifetime value against customer acquisition cost to evaluate acquisition efficiency. MRR is monthly recurring revenue, the normalized monthly subscription revenue base of a SaaS company. In practice, healthy SaaS operators watch both, because each one catches failure modes the other misses.