Definition
CAC and LTV are the two axes for judging a SaaS business's economics.
Formulas
- **CAC** = (marketing + sales cost) / new customers - **LTV** = ARPA × customer lifetime × margin - **Payback Period** = CAC / (ARPA × margin)
Healthy ratios
- LTV / CAC ≥ 3: healthy - LTV / CAC < 1: loss-locked, unsustainable - Payback < 12 months: fast-growth viable
Korea/Japan characteristics
- **Korea**: CAC relatively lower via Naver ads and KakaoTalk marketing, but higher churn drives LTV volatility - **Japan**: Longer ringi/sales cycles raise CAC, but annual contracts and low churn stabilize LTV — ratios end up similar
Practical tips
- Decompose CAC by pipeline in HubSpot/Salesforce - LTV and cohort analysis in ChartMogul/Baremetrics - Per-channel ROI: Airbridge for Korean apps, GA4 for web