Unit Economics & LTV:CAC

Establish whether a business can profitably acquire customers — the foundation under every budget and growth decision. Get LTV, LTV:CAC, and CAC payback, then judge them against healthy ranges. This is usually the first thing to run before any paid-media or budget work.

When to use

The user needs to compute or validate unit economics, set a CAC ceiling, or answer "can we afford to spend more?"

Before you start

1. Read the brand/product context first (.agents/product-marketing.md / .agents/aaj-brand.md) for model and pricing, if present.
2. Gather inputs for the model:
   • Subscription: monthly revenue per account (ARPA), gross margin %, monthly churn % (or average lifetime in months), and CAC.
   • Ecommerce: average order value, gross margin %, orders per year, retention in years, and CAC.
   • Services / contract: average contract value, gross margin %, retention in years, and CAC.
   • If CAC isn't known, supply ad spend and customers acquired to derive blended CAC.

The math