SaaS LTV/CAC Target

This question practices a core SaaS metric, the relationship between customer lifetime value and customer acquisition cost, and how to interpret it in a growth context. Candidates need to understand why investors care about whether a company is creating enough value from each customer to justify the cost of winning that customer, and how that tradeoff reflects scalability, efficiency, and capital discipline.

Interviewers ask this kind of question because it tests familiarity with the operating metrics that drive software valuation and with the judgment used to assess whether growth is healthy or wasteful. A strong answer shows that the candidate can think about unit economics, sustainability, and how management should react when acquisition efficiency is either too weak or unusually strong.