Fun_Ostrich_5521 My client’s “perfect” 7:1 LTV:CAC ratio was actually killing growth…
TL;DR: One of my SaaS clients hit a “beautiful” 7:1 LTV:CAC ratio. We thought we’d cracked the code—profitably acquiring customers like a dream. Turns out that ratio was slowing them down while a competitor at 3:1 was scaling 4x faster and raising Series B. High LTV:CAC can sometimes mean you’re playing too safe.
The “Perfect” Metric That Wasn’t
One client was proud:
- 7:1 LTV:CAC
- Consistently profitable acquisition
- Investors impressed
- Team celebrating
Meanwhile… competitor:
- 3:1 LTV:CAC
- Growing 4x faster
- Series B locked in
Our “efficiency” was costing us market share. Ouch.
What I Learned About Ratios by Stage
Here’s my simple playbook now:
- Pre-PMF (testing): ~2:1 is fine → focus on learning, not efficiency.
- Post-PMF (growth): 3–4:1 sweet spot → aggressive but sustainable.
- Scaling: Rarely makes sense beyond 5:1 → likely under-investing in growth.
High ratios aren’t a flex… they’re often a red flag.
Case Study That Hit Hard
Different client, same trap:
- Before: $8k/mo in LinkedIn ads → 6:1 ratio, flat growth.
- Insight: 70% of signups actually came from referrals triggered by those ads.
Pivot: cut ad spend to $2.5k, built automated referral system.
- 3 months later:
- CAC dropped 75%
- MRR: $15k → $42k
- Customers from referrals churned less
Lesson: It wasn’t about “optimizing ads,” it was about looking at the blended CAC picture.
Big Takeaway
Most founders obsess over CAC by channel (Google CAC, FB CAC, etc). The better move? Look at blended CAC. Some “expensive” channels are just accelerants for your cheaper ones.
Context > Benchmarks. Your “perfect” 6:1 means nothing if competitors are grabbing market at 3:1 and outpacing you.
Questions for Reddit:
- Ever had a “perfect” metric that turned out to be misleading?
- Do you track blended CAC or just channel CAC?
- How do you balance efficiency vs. speed at your stage?
Curious to hear founder stories 👇
Not promoting anything here, just sharing a growth facepalm I’ve seen a few times working with SaaS founders.