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Unit economics (LTV : CAC)

Does each customer make you money?

#Unit Economics #Finance & Accounting #Marketing #Pricing & Offers

How it works

CAC = marketing spend ÷ new customers.
LTV = price × margin ÷ monthly churn.
Rule of thumb: LTV around 3× CAC or more, with payback under ~12 months.

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Your result

CAC

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LTV

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LTV : CAC

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Payback (months)

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Learn the idea behind it

Unit economics (LTV vs CAC)

Do you earn more from a customer over their lifetime than it costs to get them?

One Metric That Matters

At each stage, pick the single number that best shows progress — and focus on it.

References

[1]
Lean Analytics — Alistair Croll & Benjamin Yoskovitz (2013)
Official page Get the book