unit-economicslisted

# Unit Economics Evaluates whether each customer (or each unit sold) is profitable after acquisition and delivery costs. ## Core Metrics * **LTV** = ARPPU (average revenue per customer per period) × Retention Horizon (1 ÷ monthly churn rate). * **CAC** = Total acquisition cost (ads, sales, onboarding discounts) ÷ number of new customers. * **Contribution margin per unit** = Price − variable cost (see break-even-analysis). * **LTV : CAC** — an industry heuristic, not a hard rule: ≥ 3 is considered healthy; < 1 = loss per customer. ## Rules * CAC payback period: how many months of the customer's monthly cash inflow it takes to recover CAC — target < 12 months for bootstrapped businesses. * Separate organic vs paid acquisition: only paid costs enter acquisition CAC; organic is tracked separately. * Monthly churn is computed from cohorts, not a total average. ## Scope & Safety * **Use for**: evaluating ad channels, pricing & discount decisions, product prioritization. * **Do not use for**: external financial reporting — these are management metrics, not PSAK. * LTV:CAC ≥ 3 is an industry heuristic; validate with your own channel's actual data. * LTV projections are sensitive to churn assumptions — test scenarios at ±2 churn points. ## Worked Example Input (local SaaS): ARPPU 150,000/month, churn 5%/month, CAC 800,000, contribution margin 80% of revenue. Output: horizon = 1 ÷ 0.05 = 20 months; LTV = 150,000 × 20 = **3,000,000**; LTV:CAC = 3,000,000 ÷ 800,000 = **3.75** (healt