Unit Economics Tracking

Overview

Unit economics describes the financial dynamics of a single customer. The four key metrics — Customer Acquisition Cost (CAC), Customer Lifetime Value (LTV), the LTV:CAC ratio, and payback period — tell you whether your business model is economically viable. These metrics are among the most scrutinized by investors and boards because they reveal the underlying health of the business independent of short-term revenue trends.

This skill guides you through calculating and tracking these metrics using your platform's analytics tools and dedicated customer analytics apps.

When to Use This Skill

• When preparing investor materials and needing to present unit economics metrics
• When understanding whether it is profitable to increase marketing spend in a given channel
• When analyzing why CAC has increased over the past 6 months
• When comparing the quality of customers acquired through different channels
• When building a financial model and needing to validate LTV assumptions
• When setting budget guardrails: maximum allowable CAC by channel
• When evaluating a new acquisition channel and projecting its payback period

Core Instructions