Mid-Stage SaaS: 127 Customers, Healthy Economics

Your LTV Analysis: Healthy Economics, Room to Optimize

The Numbers (5 Methods)

Simple LTV: $1,595.24

• Formula: $67 / 0.042 = $1,595.24
• Best for: Quick estimation

Finite Horizon (5-year): $1,412.18

• Conservative NPV calculation over 5 years
• Accounts for 10% annual discount rate
• Best for: Planning and investor discussions

Historical: $938.00

• Formula: $67 × 14 months = $938
• Based on actual 14-month average lifespan
• Most conservative, backward-looking

Probabilistic: $1,595.24

• Statistical modeling using survival analysis
• Expected lifetime: 23.8 months
• Accounts for declining survival probability

LTV:CAC Ratio: 7.6:1 (using Finite Horizon method)
CAC Payback: 2.8 months

What This Means for You

Your 7.6:1 ratio is excellent - well above the 3:1 sustainability threshold. You have strong unit economics. The question isn’t whether your business works, but how to maximize it before scaling.

Your 2.8 month payback means you recoup acquisition costs fast. This is a huge advantage as a bootstrapper - you can essentially self-fund growth.

Red Flags

Churn is your weak spot: 4.2% monthly churn is acceptable but on the high end. This is your biggest opportunity.

Impact: Reducing churn from 4.2% to 3% would increase your LTV by 40%. That’s $565 per customer. At 127 customers, that’s a $71,755 increase in total customer base value.

Green Lights

Strong value delivery: 7.6:1 ratio means customers are getting way more value than they’re paying. You have pricing power.

Fast payback: 2.8 months means you can scale without external capital if you want.

Stable base: 127 customers is enough signal to make data-driven decisions.

Your Strategic Roadmap (Prioritized)

Priority 1: Test Price Increase (Highest ROI, Lowest Effort)

Why this first: Your 7.6:1 ratio screams “we’re underpriced.” This is the fastest way to improve unit economics.

What to do:

• Test $77-84/mo on new customers (+15-25% increase)
• Run test for 30-60 days with next 20 signups
• Measure: Conversion rate, churn rate for new price tier
• Even if churn increases 1%, your LTV stays strong

Expected impact: $10-17/mo more per customer = $1,270-2,159/mo additional MRR at current base

Founder-friendly approach:

• Don’t change pricing for existing customers (avoid churn risk)
• A/B test on new signups only
• If it works, grandfather existing customers for 6 months then migrate

How to message it: Don’t overthink this. You’re adding value constantly. Charge for it. “We’ve significantly improved the product and are updating pricing for new customers.”

Priority 2: Investigate Month 8-10 Churn (High Impact)

Why this matters: Your churned customers stayed 14 months on average, but 4.2% churn monthly means some leave much earlier. There’s a pattern.

What to do:

• Pull list of all churned customers from past 6 months
• Email each: “Quick question - what made you cancel? 2-minute response would help us improve.”
• Offer $25 Amazon gift card for 15-min call with 5-10 of them
• Look for pattern: Do they churn at specific milestones? Feature gaps? Seasonal?

Expected impact: Finding the pattern lets you fix the root cause. Could reduce churn 1-2%.

Founder-friendly approach:
At 127 customers with 4.2% churn, you lose ~5 customers/month. That’s 30 churned customers in 6 months. You can personally email all 30 this week.

Priority 3: Consider Increasing CAC Budget (Optional)

Why this works now: With 7.6:1 ratio, you have significant headroom. You could increase CAC to $300-400 and still maintain healthy 3:1+ ratio.

What to test:

• If you’re content-only today, test paid acquisition
• Start small: $500-1000/mo budget
• Target: $250-300 CAC (double current, still very profitable)
• Channels: Google Ads, LinkedIn, Reddit (depending on your ICP)

Expected impact: If you can acquire customers at $300 CAC, you can grow faster while maintaining profitability.

Bootstrapper caution: Only do this AFTER testing price increase. Better to get more from existing customers before paying more for new ones. Also, paid acquisition requires learning curve - budget time for optimization.

Priority 4: Track Leading Indicators

Set up simple tracking:

• First 30-day engagement score (do customers activate?)
• Time to first value (how long until they get ROI?)
• Feature adoption by cohort (which features prevent churn?)
• Monthly cohort analysis (is retention improving over time?)

Founder-friendly approach:
Don’t build complex analytics. Use a Google Sheet. Track 10-20 customers manually at first to find patterns. Then automate if needed.

Your Stage: Scale Proven Model

You’ve proven the model works. You have:

• Strong LTV:CAC ratio (7.6:1)
• Fast payback (2.8 months)
• Enough customers (127) for statistical signal
• Clear optimization opportunities

What NOT to do:

• Don’t over-engineer analytics (you don’t need data warehouse)
• Don’t hire too early (127 customers can be managed by 1-2 people)
• Don’t diversify product yet (maximize this before building new)

What TO do:

• Optimize pricing (test increase)
• Reduce churn (investigate patterns)
• Scale acquisition slowly (test channels)
• Track simple metrics (spreadsheet is fine)

Key Metrics to Monitor Monthly

Track these:

• Monthly churn rate (goal: reduce to 3%)
• Average revenue per customer (should increase if price tests work)
• CAC by channel (measure paid vs organic separately)
• LTV:CAC ratio (recalculate quarterly)

Don’t obsess over:

• Day-to-day MRR fluctuations (too noisy)
• Vanity metrics (followers, downloads without revenue)
• Competitor pricing (price to value, not competition)

Bottom Line

You have a healthy SaaS business with room to improve. Focus on pricing first (fastest ROI), then churn reduction (highest impact), then scaling acquisition (when other two are optimized).

Your advantage as a bootstrapper: You can move fast. Test the $77 price next week. Email churned customers by Friday. You don’t need committee approval.

Next session: Run price test for 30 days, then come back with updated metrics. We’ll analyze the results and plan your next move.