You cannot ascribe a life time value to small businesses. The majority of them won't still be in business in five years (
http://smallbiztrends.com/2012/12/st...e-numbers.html)
The thing people forget is that XRO is targeting small businesses, and the failure rate is high. You cant compare Consumer SaaS companies as they dont lose half their customer base every five years due to death (except maybe a funeral or aged care provider!) or Enterprise SaaS companies whose customer base will last for decades and is extremely sticky.
The thing that XRO has to prove is that the SaaS model works in the small business market - that customer revenues for the short periods of time they are customers for are sufficient to cover the payback period and deliver profits, and outweighs the high cost of acquiring the customer in the first place. If each customer leaves before XRO has turned a profit on it, then they have a business model where the more customers they get the more losses they make, as churn increases. eg. If you have 1 million customers and your churn is 20% per year, you are losing 200,000 customers a year, most of which you have never made money from.