Building and growing a phenomenal SaaS business is simple:
1/ Acquire customers for $1
2/ Ensure those customers predictably pay you > $1 and stick around
Here’s the thing though… simple isn’t always easy.
So what do you do when your SaaS business just isn’t growing fast enough?
Whenever I get brought in to diagnose a SaaS business, I first look at the LTV and CAC.
Whenever I’m helping a SaaS Founder build their first GTM machine, I make sure to help them build an efficient GTM machine.
So what do you do with an LTV to CAC ratio?
If you have a LTV to CAC ratio of 1, it means that you have a broken SaaS business.
If it is ~3, it means that you’ve got a good equilibrium.
If it is > 3, it means that you’re under-investing in Sales & Marketing.
But say you do figure out your LTV to CAC and it’s not that great… what do you do?
Do you attack churn first?
Or.. do you fix your Go-To-Market machine?
On today’s GTM Wednesday episode, I explain how to diagnose and fix a stalled SaaS business.
(and I’ll walk you through it step by step)