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What it is

segment_ltv_cac_ratio is what the customers in a segment are expected to be worth over their life with you, set against what it cost to win them. One value per segment, struck once a quarter. It is a ratio, not a percentage. A segment at 3.4 returns three point four times what it cost to acquire its customers. Beacon publishes 3.4, never 340. It is read for a segment as a whole, because a segment holds enough customers to carry it. Beacon does not strike the same ratio for a cohort inside a segment; cohort lifetime value says why. This figure is the kind of number your finance team reads as a matter of course, and it is still not open by default on any door. Where it comes from says where that choice is made.

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How it is calculated

Measured. It comes out of Beacon’s calculation layer, where the arithmetic is fixed and written down, rather than out of one of the parts of Beacon that reason. Definitions sets out what the three method words mean. The arithmetic is a division: what the segment’s customers are expected to be worth over their life, divided by the acquisition cost attributed to them. You will not reproduce it from your own records, and that is worth stating plainly. The top half is an expectation — how long customers like these are likely to stay and what they hold while they do — and it rests on history that is still building. The arithmetic is fixed; part of what it runs over has not finished happening. Which costs sit underneath the bottom half is not stated here, because it is not yet settled. Acquisition cost can be counted with or without a share of the wider sales and marketing organisation, and from the sales side, the marketing side or both. Those choices can move the figure by a large multiple, so a ratio from your own finance team may not match this one. When the basis is settled it will be stated on this page. It is read against a floor your company’s growth plan sets — for a balanced plan, 3.0. The floor is part of your plan, not part of this figure.

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Where it comes from

Billing, through the customers in the segment and how they have retained, and the acquisition costs Beacon can attribute to winning them. Billing is the required connection: with no billing there is no revenue on any account, so there is nothing to set against a cost. The figure sits on the segment’s quarterly economic record, beside the segment economic verdict it informs.
No read interface or MCP tool serves this value yet — the table above publishes the shape ahead of the doors.
Where the choice is made. This value is not open by default on any door. The choice happens when a reader grant that reaches it is issued or widened, when you subscribe to events, or when you turn the CRM property on. Whoever makes it is shown who becomes able to see the value, and their yes is recorded — holding a grant is no longer enough on its own. The CRM and event doors carry a further consequence. Every read of the figure through Beacon is recorded in the access log; once it sits on a CRM record or has been sent to an event destination, that tool’s own permissions govern who reads it from then on and Beacon can no longer record who did. It reaches your CRM records as the number itself. A ratio carries no currency, so nothing needs to travel beside it there. It does not exist for a segment until there is enough completed history behind it. That means every part of the customer side of Beacon running, at least six monthly health readings for the segment, at least fifty completed economic outcomes in it, and at least twenty accounts in a segment tier for that tier’s figures to stand on their own. Before that there is no ratio — not a provisional one, not an estimate. The value is absent.

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How fresh it is

Struck once a quarter, on the segment’s quarterly economic record. It does not move between quarters. Accounts moving into or out of the segment change the segment’s other figures the moment they move. They change this one at the next quarterly strike.

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Currency and rounding

No currency. Both halves are in your single reporting currency, under the rules set out in currency, and the currency cancels in the division. Beacon applies no rounding of its own. A screen or an export may round for display.

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What changes it

Retention moving inside the segment, which moves what its customers are expected to be worth. Acquisition cost moving — more or less spent to win the segment’s customers. Membership moving. An approved merge, split or rename re-cuts your segments, and a re-cut segment is struck afresh rather than inheriting a ratio.

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What it is not

  • Not the return on acquisition. The return is lifetime value minus acquisition cost, divided by acquisition cost — this ratio minus one. A segment at 3.0 here has a return of 2.0. They are two figures and should not be read as one.
  • Not a percentage. 3.4 is not 3.4%, and it is not 340%.
  • Not the ratio shown for a group of new customers on the Sales acquisition cost page. That figure covers the sales side’s cost for one month’s new customers, and is struck from a different starting point. The two can differ for the same segment.
  • Not a cohort figure. Cohort acquisition cost and cohort lifetime value are published as two figures per customer, and no ratio is struck between them.
  • Not the segment economic verdict. This is one of the figures the quarterly review reads. The verdict is what the review decides.
  • Not a judgement about any one account. Every account in the segment sits under the same ratio, whatever each of them costs or returns.