Calculate key unit economics metrics for your business. Understand your customer acquisition costs, lifetime value, and profitability per customer to make better strategic decisions.
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For NPV-adjusted LTV
How long it takes to recover the cost of acquiring a customer. Shorter is better—ideally under 12 months.
The ratio of customer lifetime value to acquisition cost. A ratio of 3:1 or higher means you're earning $3 for every $1 spent on acquisition.
Unit economics helps you understand if your business model actually works. Know how much you spend to get each customer and how much money they bring in—so you can grow profitably.
See exactly how much it costs to get a customer and how much revenue they'll bring in over time. Know if each customer is profitable.
Test different scenarios to see how reducing costs or keeping customers longer impacts your bottom line. Make smarter growth decisions.
Calculate the metrics investors want to see—like how long it takes to earn back what you spend on getting customers.
Understanding the key metrics and concepts behind unit economics.
CAC is how much you spend on sales and marketing to get one new customer. It's calculated by dividing your total sales and marketing costs by the number of new customers you gained in that period.
LTV is the total revenue you expect to earn from a customer over their entire relationship with your business. It helps you understand how much a customer is worth to your company.
A ratio of 3:1 or higher is considered healthy—meaning you earn $3 for every $1 you spend acquiring a customer. Ratios above 5:1 are excellent and indicate very strong unit economics.
Payback period is how long it takes to earn back the money you spent acquiring a customer. A payback period under 12 months is good, and under 6 months is excellent for most businesses.
ARPA (Average Revenue Per Account) is the average amount of money each customer pays you per month. It's calculated by dividing your total monthly revenue by your number of customers.
Churn rate is the percentage of customers who cancel or stop using your service each month. Lower is better—a 5% monthly churn rate means you lose 5 out of every 100 customers each month.
Gross margin is the percentage of revenue left after paying the direct costs of delivering your product or service. For example, an 80% gross margin means you keep $80 of profit for every $100 in revenue.
Unit economics shows whether your business model is profitable at the customer level. It helps you avoid growing unprofitably and ensures each new customer actually makes you money in the long run.