Is the traditional LTV formula giving you misleading results when you have multi-year SaaS contracts?

In episode #321, Ben Murray unpacks a listener’s question about how Lifetime Value (LTV) should be calculated when customers sign multi-year agreements. Using real-world finance and accounting logic, he breaks down how multi-year contracts can inflate your aggregate revenue retention (GRR) and distort LTV:CAC ratios — and how to fix it.

You’ll learn when to adjust your LTV calculation to use cohort retention, renewal rate, or aggregate GRR, depending on your business model and contract structure. The Retention Triangle!

What You’ll Learn:

Why It Matters:

Resources Mentioned:

No Fluff Series – The SaaS Academy: https://www.thesaasacademy.com/pl/2148384654

Quote from Ben:

“Multi-year contracts can make your LTV look great — until investors realize it’s inflated by locked-in customers. That’s why understanding retention dynamics is critical.”