How much gross margin a customer eventually pays back compared to what they cost to acquire, where investors want at least 3:1 to believe the business model actually works.
In its early public years, Salesforce reported customer economics implying a roughly 5:1 LTV to CAC ratio, validating Marc Benioff's decision to triple the sales headcount between 2005 and 2008. The clean ratio gave the board cover to fund the build-out that took the company from $300M to over $1B in revenue in three years.
