Customer Acquisition Cost (CAC)

CAC = Total Sales & Marketing Spend / New Customers Acquired

Example: Monthly S&M Spend: $50,000 New Customers: 25 CAC = $50,000 / 25 = $2,000

Customer Lifetime Value (LTV)

LTV = (Average Revenue per User × Gross Margin) / Churn Rate

Example: ARPU: $500/month Gross Margin: 80% Monthly Churn: 5% LTV = ($500 × 0.80) / 0.05 = $8,000

Net Revenue Retention

NRR = (Starting MRR + Expansion - Churn) / Starting MRR

Example: Starting MRR: $100,000 Expansion: $15,000 Churn: $8,000 NRR = ($100,000 + $15,000 - $8,000) / $100,000 = 107%